Can China Turn Cotton Green?
That “all-natural” cotton T-shirt in your closet? The one with the eco-friendly message brightly printed on the front? Ounce for ounce, it could be the most environmentally toxic item of clothing you own. From the water and agrichemicals lavished on cotton grown in some of the world’s driest regions (approximately one-third of the pesticide and fertilizer produced worldwide gets sprayed or dusted on cotton), through multihued rivers of waste streaming from textile mills to landfills bulging with castoff clothing, the life cycle of the humble cotton tee has left ecological wreckage in its wake.
As both the world’s leading producer and biggest importer of raw cotton and its top exporter of cotton fabrics and apparel, China has experienced much of the damage. The expansion of industrial-scale cotton farming in the arid western Xinjiang province has been linked to the advance of the vast Taklamakan Desert, whose dunes have swallowed entire towns. In China’s industrial heartland, untreated dye wastes stain drainage ditches in vibrant synthetic hues, contributing to pollution that renders most Chinese rivers undrinkable and a few even dangerously toxic to the touch. So when China’s leaders sought advice from international researchers on how to reduce the ecological cost of their country’s trade, it was natural for cotton to be put atop the list for scrutiny.
And perhaps it was no less inevitable that scrutiny would extend to America and other major cotton producers, shedding light on how divergent political and economic cultures can hinder the achievement of greener trade — even when the country at the center of that trade is focused sharply on sustainability.
China’s environmental woes go far beyond its role in fashion, of course. One official conceded in 2006 that the cumulative cost of environmental damage and pollution-related health care was effectively offsetting all of the country’s widely envied 10 percent annual economic growth. But few industries bind China’s interests more closely to those of the United States than cotton textiles. In addition to all those Chinese-made T-shirts and other gear stocking the shelves in the local mall (more than $30 billion worth a year), China is the No. 1 foreign customer for American-grown cotton, buying as much as 45 percent of its exported harvest in a typical year. Beyond China’s two-way trade with the U.S., cotton is one of the world’s major agricultural commodities, the economic support in whole or part of one-sixth of humanity, when all stages of the cotton life cycle are included. It’s also a central catalyst in a wide array of environmental issues, from falling aquifers in irrigated growing regions to nutrient overloads that nourish fish-killing algae blooms in lakes and oceans.
With the scale of pollution’s drag on the Chinese economy becoming evident earlier in the decade, China’s State Council (its rough equivalent of the federal cabinet) directed its research arm, the Development Research Center, to seek advice on bringing the trade vital to China’s prosperity into balance with its ecological resources. The DRC in turn commissioned a low-profile Canadian research center to oversee an international network of experts, funded in part by Switzerland, in a review of three trade streams with the worst environmental records. Sharing the short-and-dirty list with cotton were wood products and electronics.
“They asked us to help envision a sustainable trade strategy,” explains Mark Halle, the Swiss-raised American who directed the project from Geneva, with colleagues at the International Institute for Sustainable Development in Winnipeg, Canada. The scope of the study was to include the three industries’ full-spectrum impact, from product cradle to grave. And the DRC made it clear that China’s leaders were looking for pragmatic solutions, not idealized visions. In particular, whatever strategies emerged from the research had to be compatible with China’s World Trade Organization and other trade commitments.
The unusual request represented “a unique opportunity” for the IISD team to inject research results directly into policymaking at the pinnacle of China’s power structure, says Jason Potts, a Montreal-based staff member who oversaw the nuts-and-bolts development of methodology. Under Potts’ direction, the three research teams, involving academics and members of national academies of science from France, Britain, Germany, China, Canada and Switzerland, brought three general questions to each trade sector under study: What were its main environmental impacts? What was most influential in the industry’s supply chain, market structure or participant population, in driving those impacts? What effective steps could China’s national government take toward a lighter environmental impact?
The objective, as Potts saw it: “sensible policy recommendations that work with the market.”
The team led by Pan Jiahua, director of the Research Centre for Sustainable Development and Environment at the Chinese Academy of Social Sciences in Beijing, had no trouble identifying the environmental stains on cotton’s production record. In several regions that China relies on to meet its enormous demand for raw cotton, irrigation diverts more water than is sustainably available, straining resources and damaging ecosystems from Central Asia to the American Southwest. By contrast, the researchers found that the use of agrichemicals differed widely among major supply regions, with China’s own farmers dosing their fields with six times more fertilizer and pesticide than growers in sub-Saharan Africa. American farmers and others in Brazil fell somewhere in the middle.
Textile printing and dying did most of its damage on Chinese soil — more accurately, on Chinese watercourses. As China’s textile industry blossomed in the wake of the country’s entry into the WTO, doubling output in the decade after 1999, so has its production of hard-to-treat wastewater. Only about 10 percent of dye wastes are recycled, and about a third of the rest flows directly to the environment. In provinces like Xinjiang, this waste is a major contributor to industrial and municipal pollution so severe that nearly 1 in 4 of China’s 1.3 billion people drink contaminated water every day.
In analyzing where along cotton’s journey lay the power to influence change, Pan’s team cited earlier research that identified the global cotton-textile value chain as “buyer-driven” — dominated by a relatively small number of increasingly global participants. In the key U.S. market, they noted, just two large discount chains — Wal-Mart and Kmart — account for one-quarter of all the clothing sold.
By contrast, the capacity of China’s national government to influence the behavior of millions of mainly small cotton farmers and tens of thousands of textile enterprises in its own territory was limited. National leaders have articulated numerous laudable environmental policies and guidelines, but the local agencies charged with implementing those policies are staffed and managed by local governments whose incentives are dominated by economic development. Dai Yichun, coordinator of the China Council for International Cooperation on Environment and Development, is an adviser to China’s national leadership on the environment. Though not involved in the current project, she understands the localism problem, which she describes this way: “[Chinese Premier] Wen Jiabao is very aware of the importance of environmental protection, and he has his ideas. The trouble is, how far can the ideas carry? There is a disconnect between what the national government wants and what the local governments will do.”
Even so, Pan’s cotton research team identified several actions China’s leaders could take to oblige an industry that has flourished by ignoring the environmental cost of its operations to account for those charges. “[I]f the true environmental costs can be included in the price of products and services,” the researchers argued, “the pricing system can give market signals that ensure the efficient allocation of environmental resource use.” It identified several tax and incentive measures that could help do the trick, including fees for wastewater discharge, a tax on cotton clothing to fund recycling and the redirection of existing tax incentives to motivate adoption of wastewater recycling.
With world demand for cotton goods rising and China’s arable land under pressure from other demands, notably food production and urban expansion, the researchers concluded that the country should increasingly look abroad for sustainable sources of fiber. Countering the view that global trade is necessarily harsh on the environment, the researchers contended: “A market shift from irrigated, chemical input-intensive growing areas such as the U.S. and China toward rain-fed and less intensive areas in sub-Saharan Africa and parts of Brazil and India would bring significant net environmental gains.”
With more than a third of the world’s cotton crossing international borders at least once on its way to market, the researchers also concluded that China would benefit from invoking a “Green Trade Policy … to encourage cotton production and sourcing from sustainable supply chains.” In language echoing proposals heard recently on Capitol Hill for so-called “green” tariffs to be levied against carbon-intensive goods from other countries, Pan’s team called for China to consider “a cotton textile environmental tariff.”
Should America’s cotton growers, who use two to four times as many agrichemicals on their irrigated cotton fields as African farmers do on rain-fed crops, worry about the possibility that China’s trade policy will turn green? Not necessarily.
The international researchers concluded that a significant impediment to greater sustainability for China’s cotton trade lies in a striking difference between cotton production in the nominally communist state and its production in supposedly capitalist America. While U.S. production is dominated by heavily mechanized, industrial-scale farms, and China’s cotton is overwhelmingly grown on much smaller parcels tended by hand, it’s the large American cotton farms that are arguably the more socialized. China’s millions of small cotton farmers are highly exposed to the vagaries of the market; the United States subsidizes its growers by amounts that in some years exceed the harvested value of their crops. Such subsidies in the U.S. and countries in Europe and elsewhere (including China itself) depress the price of globally traded cotton, leaving small producers with little profit to invest in better growing techniques. In the long run, Pan’s team argued that lower subsidies for cotton growers would contribute to “improved sustainability at the global level, mainly because the most trade-distortive countries are also countries where the pressure on the environment is the highest.”
Still, the project’s Western collaborators think America’s cotton farmers have little to fear from any Chinese green trade policy — for a very bottom-line reason. As Potts observed: “In cases where one country is subsidizing massively, it usually means massive consumer welfare gains to the importing country” — in this instance, China. Put another way, American taxpayers’ willingness to pick up much of the cost of its water- and chemical-intensive cotton crop makes the price of U.S. cotton all but irresistibly low to Chinese buyers, whatever the cost to America’s ecosystems.
But if one market force (or distortion, depending on your point of view) may frustrate achieving a cleaner cotton, another holds promise. Given the rising power of branding in both domestic and foreign markets, Pan’s team urged concerted policy efforts to stoke consumer demand for a “greener” white cotton tee. Before resorting to “green tariffs,” it suggested that China throw its trade and diplomatic weight behind existing, multiparty, industry-backed ventures such as the Better Cotton Initiative (sponsored by jeans-maker Levi Strauss, among others), which is meant to raise the standard of environmental accountability from end to end of the cotton supply chain.
Teams working on the sustainability of China’s lumber and electronics trades reached broadly similar conclusions, with some differences. Both also urged efforts to build market demand — and credible standards — for sustainably produced goods through China’s participation in international, industry-backed initiatives. Achieving sustainability in lumber and wood products will require China to work closely with supplier nations to improve harvesting practices, that team found. Opportunity to clean up the life cycle of electronic goods lies closer to home, in formalizing environmental standards for the hitherto unregulated and often family-scale business of dismantling and recycling old computers and other electronics. (Find a summary of the three studies’ recommendations here).
The researchers are currently completing similar studies of two additional trade sectors with troubled environmental records: fish products and copper. When those are done, DRC Deputy Director Long Guoqiang said, their “conclusions and policy recommendations will be reported to policymakers.” Until then, he declined to evaluate the team’s proposals. But Long, an occasional speech writer to Premier Wen, described sustainability as a rising priority for China’s leaders. “Sustainable trade means economic, social and environmental sustainabilities,” he told Miller-McCune. “In the past, China [judged] the former two more important than the latter one. In recent years the environmental target has become more and more important. We think the three targets are equally important to China at this stage.”
China’s growing population, as well as its taste for the same wardrobe gear the rest of the developed and developing world desires, will make sustainability an elusive target for cotton. What China may have going for it, suggests project leader Halle, who worked previously for the World Wildlife Fund and International Union of Concerned Scientists, is its one-party government and authoritarian habits, which can support decisive action: “Once they figure out they have a problem, they move quickly and massively.” If the policy response looks familiar, he says, “that’s when you can say you’ve had an impact.”