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Old Posted Feb 21, 2019, 10:28 PM
milomilo milomilo is offline
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Join Date: Dec 2013
Location: Calgary
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Quote:
Originally Posted by someone123 View Post
This is a misconception. Probably the #1 economic misconception right now.

Transportation has a cost, sure, and all else equal it's cheaper to consume something close to where it is produced. But all else is not equal and the transportation costs (dollars and carbon footprint) in the modern economy are a tiny portion of the total, because transport by ship in particular has become incredibly efficient. It's very easy for some other factor to outweigh the cost of transportation.

Exmaple:

Tons of CO2 emitted when manufacturing a Land Rover Discovery: 35
Tons of CO2 emitted to ship a Land Rover 20,000 km: 0.5-2

That's the maximum distance the car could be shipped. If we were talking about shipping it 200 km vs 2,000 km it would be really easy to imagine some other factor like power source having a bigger impact than transportation (one country has hydro, one country has coal). It's also easy to see why it might be good to have one big, heavily optimized Land Rover factory instead of a bunch of small ones scattered all over.

Just imagine what the math looks like for an iPhone that sells for $1,000 and weighs 150 g.

The story with food production is similar. Some places are better or worse places to grow food, and generally the big producers have economies of scale that hugely outweigh transportation. If we didn't have a global network of food shipping we'd be hugely worse off. In fact we would just not be able to support the populations that exist right now.
Thank you, you put that much more eloquently than I did.
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