Trade is responsible for much larger amounts of material extraction than direct trade flows indicate when accounting for the additional materials, energy, water and land used in the extraction and production of traded goods but left behind as wastes and emissions in the exporting country.
In 2017, the material required for trade was three times the direct trade as more than 35 billion tons of material resources were extracted globally to produce 11 billion tons of directly traded goods. This means that one-third of the total 92 billion tons of material resources extracted in the global economy that year was destined to produce goods for trade.
Such analysis by the International Resource Panel of the materials embodied in trade reveals that resource-intensive processes have shifted from high-income importing countries to low-income exporting countries, with a corresponding shift in associated environmental burdens.
The extraction and processing of resources for export depletes natural assets, while increasing waste, emissions, loss of biodiversity, land degradation and water pollution. Appropriate policies are therefore needed to address the adverse environmental impacts of trade and ensure that trade helps drive the transition towards a fairer, more sustainable and circular economy.
Policy analysis by the United Nations Environment Programme Environment and Trade Hub shows how both multilateral trade rules and regional trade agreements can be used proactively to advance the circular economy and minimize the environmental impacts associated with resource extraction.