The RME of Exports and Imports
Considering RME of imports and exports is crucial for understanding the environmental pressures of international trade. The physical dimensions behind the direct trade flows change considerably in some cases. As a starting point, Table 2 presents the RME, direct material flows, and indirect material flows attributed to imports and exports10 of the countries under analysis. RME stems from the methodological framework presented in the previous section. Direct material flows that cross the system boundaries (or country borders) are obtained from previous studies (see Figure 1). Finally, we estimate indirect flows, as Eurostat (2001) suggested, by subtracting the direct flows from the RME.
Table 2. Physical trade flows in terms of raw material equivalents (RME), direct flows, and indirect flows in millions of tonnes (Mt) for 2003
|RME a||Direct flows b||Indirect flows a–b||RME c||Direct flows d||Indirect flows c–d|
|Brazila||1,164||341|| 823|| 817||108|| 709|
|Chile|| 700|| 27|| 673|| 66|| 26|| 40|
|Colombia|| 178|| 76|| 101|| 55|| 14|| 41|
|Ecuador|| 29|| 21|| 8|| 20|| 7|| 14|
|Mexico|| 411||244|| 167|| 421||185|| 236|
The findings indicate that, on average, each ton exported by Chile needs around 25 tonnes of indirect flows that remain in the country in the form of waste and emissions. Part of the indirect flows could eventually be recycled, however. The relation is significantly less when fossil fuels are a considerable part of exports, as, for example, in Ecuador (0.4 t of indirect flows for each ton of direct flows) or Mexico (0.7 t). When exports are led by biomass, the coefficients are 4.6 and 1.3 for Brazil and Colombia, respectively. The quantity of indirect flows related to imports tends to be less variable, ranging between 0.1 t for Brazil and 0.8 t for Mexico. For the rest of the countries, the coefficients are contained in that interval.
Moreover, Figure 2 presents the net material trade balances—that is, physical material imports minus exports in terms of RME (RTB) and in terms of direct material flows (PTB) for the economies under analysis. Findings indicate that for some countries the deficit in PTB increases when the material trade balance is estimated from an RME perspective. This is especially the case for Chile, as we intuitively expected, given that large flows of ore minerals were assigned away from domestic consumption to exports: The equilibrium in terms of PTB thus turns into a huge deficit in terms of RTB. For Brazil and Colombia the situation is similar, although less evident: The deficits in material trade balances increase from 233 Mt (PTB) to 347 Mt (RTB) for Brazil and from 62 Mt (PTB) to 123 Mt (RTB) for Colombia. In the case of the United States, the surplus in material trade balances increases from 170 Mt (PTB) to 636 Mt (RTB). A different result is found for Ecuador, where the deficit decreases from 15 Mt (PTB) to 9 Mt (RTB) when it is measured in terms of RME. This is because of the indirect material flows of imports, driven by manufactured goods, which require more material inputs along the production chain than exports, which are dominated by oil. Mexico is an interesting case, because the material trade balance changes from a deficit in PTB to a surplus in RTB when indirect flows are accounted for with respect to traded goods and services. Interpretations of import results must be considered carefully, however, because of the restrictive assumption regarding the technology used for producing imported commodities (see the Methodology section).
Figure 3 illustrates the RME of imports and exports of different commodity groups. In general, one observes a clear tendency toward exports of primary commodities for developing countries (more than 80% of total exports), especially for Chile, Colombia, Ecuador, and Mexico. The case of Brazil appears less clear; exports of primary commodities represent almost 40%. If the food industry is included, however (which is part of light industries in Figure 3), the proportion of primary commodity exports in total exports also increases to 60%. For the United States, the exports of primary commodities are around 48%, which may be surprising for a high-income economy and most probably cannot be generalized to the majority of the richer countries. Conversely, more than 50% of the imports of these countries, including the United States, are assigned to heavy industries and services as their final sectoral destination.
Figure 3. Import (m) and export (x) structures based on raw material equivalents RME for Brazil (BR), Chile (CL), Colombia (CO), Ecuador (EC), Mexico (MX), and the United States (US) in 2003. Sectoral comparisons between countries should be carefully interpreted due to countries’ dissimilar commodity classifications. Nevertheless, high aggregation levels as presented in this figure tend to match.
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Furthermore, Figure 4 presents the whole metabolism of each system, showing the economy-wide balances in physical and monetary terms for the countries under study. We also present balances in monetary units to contrast potential asymmetries between physical and monetary units. Moreover, Figure 4 shows an overview of how these economies are supplied with material resources, distinguishing between imports and domestic supply flows, on the one hand, and the final demand, on the other hand, and differentiating between domestic consumption and exports. Thus, the results give a general idea of how economies meet their needs, both in physical and in monetary terms, showing the key role of international trade for the different countries.
Figure 4. Economy-wide physical and monetary balances in 2003. RME = raw material equivalent; RMC = raw material consumption; BUS$= Billions of U.S. dollars; GDP = gross domestic product.
The monetary trade balances (MTB) were more or less in equilibrium for Chile, Colombia, Ecuador, and Mexico, and the value of exports was in the same range as the value of imports, with a variation of a maximum of 9%. In comparison, Brazilian export values were 28% larger than imports, and the United States’ exports were 53% less than its imports. The physical side of international trade presents large asymmetries in the RTB for most of the countries, apart from Mexico. For instance, whereas Brazilian and Chilean exports were larger than imports in monetary terms, the RTB had a deficit of 42% and 1,000% (exports were around ten times larger than imports), respectively. Colombia and Ecuador not only show higher values of total imports than of exports but also present a deficit in RTB; the RME of exports was larger than that of imports. In the MTB, imports were around 9% larger than exports for these two countries, whereas Colombia's physical exports were three times as large as its imports, and Ecuador's exports were 44% larger than its imports. Finally, Mexico's and the United States’ MTBs exhibit higher imports than exports, by 5% and 53%, respectively, showing a surplus of 2% and 51% in the RTB (the RMEs of exported commodities were smaller than those of imported products).
RMC versus DMC
In general terms, material consumption is defined as DE plus imports minus exports. As it is clearly derived from this analysis, the way exports and imports are measured does matter for calculating the levels of material consumption of economies. Differences can be explained by exclusion versus inclusion of indirect material flows of trade. Whereas DMC considers only the direct material embodied in exports and imports, RMC adds the indirect flows required upstream along the production chain—that is, it accounts for imports and exports from the RME perspective. Thus, RMC can serve as an alternative analytical measure for material consumption, and it may be more precise than DMC for analyzing countries’ material needs for maintaining a specific standard of living.
Figure 5 shows Chile's material consumption from both perspectives, RMC and DMC. The DMC indicator for the Chilean economy increased by a factor of around 6 between 1977 and 2003. Over the same period of time, however, the RMC indicator only grew by a factor of about 2. This is a clear situation in which RMC should be used instead of DMC if the purpose is to reflect domestic material needs.
Figure 5. Chile's domestic consumption expressed in terms of direct material consumption (DMC) and raw material consumption (RMC) for 1977, 1986, 1996, and 2003. RME = raw material equivalent.
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Furthermore, DMC per capita in Chile rose from 13 tonnes in 1977 to 47 tonnes in 2003, whereas the RMC per capita increased from 7 tonnes per capita to 10 tonnes per capita for the periods under study. In 1986, it is possible to observe an absolute dematerialization. This is due to a global oil crisis that heavily affected the Chilean economy during this time. For example, household consumption (in constant prices) decreased by almost 30% in 1983 in relation to 1981. In 1986, it still remained 26% below the 1981 levels. In fact, it took 10 years for household consumption to reach the level of 1981.
From the analysis above, it seems to be more appropriate to use RMC than DMC. The differences between the approaches are particularly large for Chile. The use of the RMC indicator should especially be considered for other mineral-extractive economies, such as Peru, which had a DMC per capita of 18 tonnes in 2003 (Russi et al. 2008). For the rest of the countries, discrepancies between DMC and RMC are less clear: The differences in value between the indicators do not exceed ±2 tonnes. For Brazil and Colombia, DMC is still larger than RMC. In the case of Mexico and Ecuador the opposite is true, however, which means that the ratio of indirect flows is higher for imports than for exports (see Figure 6).
Figure 6. Raw material consumption (RMC) and direct material consumption (DMC) in tonnes per capita for Brazil, Chile, Colombia, Ecuador, Mexico, and the United States (2003).
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