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Jan 03, 2008

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phil_style

And therein lies a strong argument against the 'air-miles' fallacy. Why not shift goods from places where they can be produced more efficently, provided that efficency is resultant from lower resource inputs & outputs and not just wage, tax or legal compliance costs.

It might still be more environmentally safe (in terms of total resource inputs and emission outputs) to produce meat in NZ and ship it to the UK, than to produce it in the UK - for example.

As a caveat, one of the problems with efficiency gains through technology is that, by reducing input resources, the cost of production is reduced. Therefore, supply can increase, and the market price would normally drop. The result is more product on the market. So while the per-unit environmental cost is reduces, the total number of units being produced rises, and the total environmental cost remains the same.

Michael W. Kruse

Its all about trade offs, isn't it? I think the driving issue is that natural resource inputs usually are not the major cost input. Labor and technology (i.e. capital) are usually the big costs. Between advanced nations like NZ and UK this may not be a major problem. But between, say, Kenya and the UK there are major differences.

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