The Ecological Costs of Low Prices

This is from Jefferson Decker's review of Nelson Lichtenstein's The Retail Revolution: How Wal-Mart Created a Brave New World of Business in The Nation on October 5:

Today, Wal-Mart's world buying headquarters is in Shenzhen, a bustling industrial city along the Pearl River Delta in Guangdong Province. In 1979 the Chinese government designated Shenzhen a "special economic zone" with low corporate taxes and few environmental regulations. Guangdong now produces a third of China's exports, 10 percent of which end up on a Wal-Mart shelf somewhere in the United States.

While I've previously mentioned the large economic bond between Wal-Mart and China, the numbers still surprise me.

This particular quote emphasizes the way that Wal-Mart, like many other businesses, manages to evade environmental standards imposed in the United States (and in other affluent western nations).

Shenzhen is a very large city these days, with over 10 million residents. The people there are relatively wealthy as the per capita GDP exceeds US $8500 -- one fruit of 20% growth rates for 20 years.

However, the UNEP's 2007 report Shenzhen Environment Outlook emphasized the growing environmental burden of unsustainable development. Under the "business as usual" model, which the report calls "Scenario A," disaster looms in the next two decades (p. 157 of Chapter V):

In a short term, the economy will retain a fast growth pace but in a long run the resources and energy can hardly meet the demand of the influx of population and surging industrial development, and water and land resources are in tight supply. Massive sea filling projects have great impacts on coastal ecology and urban expansion has reached the extremity. Pollutant discharge is more than doubled and serious pollution is threatening urban ecology. As the impact of resource depletion and environmental destruction loom large, the economy falls into recession after experiencing fast speed development. Various contradictions emerge as a result. In a word, Scenario A presents a picture of a deteriorating society.

This is a very high cost of "Always Low Prices."


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