Core tenets of the theory of ecologically unequal exchange

Martin Oulu

doi:10.2458/v23i1.20251

Abstract

In this article, core tenets and claims of the theory of ecologically unequal exchange (EUE) are synthesized. EUE theory postulates a net flow of natural resources from peripheral developing to core industrialized countries through international trade, a situation which undermines the development of the periphery while enhancing that of the core. The key claims and EUE mechanisms are categorized and discussed under three topics: 1) the structure of the capitalist world-economy, 2) monetary valuation, and 3) equity and justice. The treadmill logic of capitalism in which capital extracts ecological resources and release waste in an endless pursuit of profits creates an expansionary dynamic which draws peripheral countries into exploitative market relations. This peripheralization is supported by 'free trade' economic policies, while nation-states and other political-economic institutions such as the WTO and IMF provide the regulations which ensure proper functioning of the system. Monetary valuation caps it by obscuring the inverse relationship between thermodynamics and economics, in which low-entropy energy and materials indispensable in economic production processes are lowly priced while processed goods which have dissipated most of their matter-energy are highly priced, ensuring that biophysical resources and profits accumulates in the industrialized Northern countries. This EUE framework is applied to the EU's Raw Materials Initiative from the vantage point of policy as implicit theory. By challenging mainstream policies and their underlying theories, the EUE perspective demonstrates that alternatives to neoliberal policy prescriptions exist and policy can play a crucial role in bringing about the necessary structural changes.Key words: ecologically unequal exchange, environmental justice, EU, capitalism, free trade, policy

Highlights

Unequal exchange (EUE) refers to the empirically observed tendency toward an asymmetric flow of embodied materials and energy from peripheral countries largely located in the Global South to the core developed world, a consequence of the structure of international trade
Ecologically unequal exchange (EUE) theory is based on a world-systems perspective, according to which the capitalist world-economy is economically and geographically divided into an affluent core and less developed periphery, and in which surplus value flows from the periphery to the core
While intra-country inequalities can be alleviated through redistributive policies or international trade by 'importing sustainability', weak global governance mechanisms combine with planetary limits and boundaries to make it difficult to address global inequalities brought about by EUE

Summary

Introduction

Unequal exchange (EUE) refers to the empirically observed tendency toward an asymmetric flow of embodied materials and energy from peripheral countries largely located in the Global South to the core developed world, a consequence of the structure of international trade (cf. Bruckner et al 2012; Dittrich and Bringezu 2010; Dorninger and Hornborg 2015; Hornborg 1998; Oulu 2015; Pérez-Rincón 2006; Schaffartzik et al 2014; Steen-Olsen et al 2012). According to Bryant and Bailey (1997), political ecology posits that the costs and benefits of environmental change are unequally distributed among actors, a situation which reinforces or reduces existing socio-economic inequalities, and has political consequences due to the alteration of power relations. Hornborg (2009), for example, identifies five interconnected "illusions" which make it difficult to conceptualize EUE: the fragmentation of scientific perspectives into bounded categories such as 'economy' and 'ecology', the assumption that exchange at market prices is tantamount to reciprocity, the representation of current global inequalities as developmental stages in historical time, and the belief that sustainable development is achievable through consensus. Because sustainable development is clearly a political and social construct and not a scientific blueprint (Axelrod and VanDeveer 2015), Hajer's (1995) contention that a strong and well informed public is the appropriate response to an anti-realist understanding of the environmental problematic resonates with the aim of this article

Ecologically Unequal Exchange: core tenets and claims

Findings

Conclusion