A Low-Carbon Christmas

Oct 31, 2021 Features / Columnists, Peeping Tom

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Kaieteur News – The slowdown in the transportation of goods and services will spoil many persons’ Christmas. Already some shipping companies are informing customers that they are not likely to receive their goods in time for Christmas.
The Georgetown Chamber of Commerce and Industry has signalled its concerns about the impact of what is being called supply chain problems on the arrival of goods for the holiday season. All around the world the slowdown in freight services has led to massive increase in food prices.
The cause of this slowdown has been termed supply chain problems. It mainly refers to the bottlenecks which have developed in getting goods to distributors, manufacturers and consumers.
If for example you eat a packet of foreign-made biscuits, this product has to be imported into Guyana. To reach here it has to be shipped in containers. To reach the containers, it has to be transported by trucks from a warehouse by the suppliers. To get to the warehouse, it has to be transported by land or sea from a factory. The factory needs raw materials – flour, sugar, etc. – to feed into its machines which produce the biscuits. The machines however need spare, some high-tech, for the production process. Those spares have to be manufactured elsewhere and even in some cases other material such as packaging have been outsourced.
All of these stages are part of the global supply chain. And the causes of the shortages and high prices of goods are related to the fact that the supply chain systems are integrated across national boundaries. The world has become so integrated that problems in a few countries can create ripples in the entire global supply chain.
The pandemic had led to the closure of a number of factories including in countries such as China, Mexico and Canada. It is for this reason that during the pandemic computer chips and other parts were so hard to come by. The slowdown in consumption led to a number of workers – including container truck drivers being laid off – thereby resulting in a shortage of transportation workers.
Now that the global economy is being kick-started, demand has surged and the supply cannot keep up with the rising demand. In keeping with the laws of supply and demand, this has led to an increase in prices, including massive increases in shipping costs.
But price increases have not restored the system of equilibrium and this is because various stages of the supply chain system simply cannot keep up with the demand. At the same time, other problems have compounded the problems at various other stages of the supply chain. And this is resulting in bottlenecks in receiving goods.
But the implications of the supply chain problems go well beyond the timely arrival of Christmas stocks or the increase in food prices. It is affecting inflation, public sector investment and constricting economic growth.
The government doled out massive tax breaks to the local private sector in the hope of cushioning food prices. But despite the Treasury placing billions in the pockets of the business sector, prices have not reduced significantly and inflation is hurting the pockets of the poor man, really hurting.
The difficulties in receiving goods in a timely manner have already started to affect Guyana’s Public Sector Investment Programme. A number of projects which the PPP/C was racing to complete this year will not be completed in accordance with their original deadlines because of the late arrival of inputs.
Supply chain problems are also slowing economic growth and this will result in a sluggish recovery instead of robust rebounding which was predicted. For small countries like Guyana, it can shave a few percentage points off non-oil growth.
In the United States it is estimated that the supply chain problems had led to massive reduction of more than 25 percent in the consumption of goods. And this has helped to constrict growth by at least two percent for the third quarter of this year.
The global supply chains may be hurting our pockets and decreasing our profits. But they represent a relief for the environment because once these problems persists it will mean less movement and consumption of goods.
A significant portion of the world’s carbon emissions are linked to the global supply chains and to the consumption of goods. Any slowdown in the supply chain represents good news for the world’s carbon footprint.
Guyana’s leaders are eager to ensure the country remains a net-carbon sink (is it with all the flaring which Exxon was doing and the massive oil production taking place?). As such, apart from the inflationary effects, the government should be happy with the supply chain-occasioned slowdown because it means fewer emissions.
Instead of therefore worrying as to whether goods will arrive for Christmas, the government should be encouraging a low-carbon Christmas – produce less, drive less and eat less. It is good for the environment.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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