Thinking globally…more locally

It’s not just a small world, after all. Over the past few years, the distance between countries seems to have shrunk to almost nothing at all, at least from a manufacturing standpoint. The assembly line of production now frequently spans 3 or 4 continents, as materials whiz from the Americas to Asia for production, to Europe for assembly, and back to the States for sale.

Although the economic costs of this system—dominant for the last quarter century—were low, the environmental costs were immense, as the jets and tankers used in shipping spewed billions of tons of greenhouse gases into the air, according to the UN’s Intergovernmental Panel on Climate Change. Moreover, many factories abroad operated under exceedingly lax environmental regulations, resulting in situations like that in Beijing, where smog has become so thick and toxic that some Olympic runners this summer felt the need to don face masks.

Now, skyrocketing oil prices are closing the gap between these economic and environmental costs, and compelling businesses to make greener changes to their supply chains.

Suddenly, many American factories are coming back home, returning production to traditional regions. North Carolina, a former hub of furniture manufacturing, is witnessing the return of Craftmaster Furniture and La-Z-Boy, steel giants Arcelor-Mittal and Severstal have recently invested in U.S.-located steel facilities, and more and more stores and restaurants are relying on locally-grown foods to cut down on shipping costs. Additionally, companies that still rely on shipments from abroad have slowed their container ships by nearly 20 percent to save on fuel costs. And with every reduction in fuel consumption come massive savings in greenhouse gas emissions.

“Being green is in [the companies’] best interests not so much in making money as saving money,” Gary Yohe, an environmental economist at Wesleyan University, told The New York Times earlier this month. Because of this, “Green companies are likely to be a permanent trend.”

Local production is a win-win-win situation. Companies save money on shipping costs, local residents benefit from a booming job market, and the world reaps the benefits of reduced CO2 emissions. Coming home never felt so good.