The Covid 19 pandemic has laid bare the fallacy of relying on global supply chains for all of our needs
No-one could deny that Covid 19 – or Coronavirus as it’s commonly known – is causing rapid changes to our lives at the moment.
Obviously, our most important priority is to follow the advice designed to keep us all safe, but I’m sure I’m not alone in finding that the bombardment of news coverage makes it hard to keep calm.
Amid it all, it’s important to try to stay positive. Almost inevitably, good emerges from bad and now is an ideal opportunity for those of us with time on our hands to reflect on what the current epidemic is teaching us.
I’m taking time to revisit some of the classic environmental works such as James Lovelock’s Gaia: A New Look at Life on Earth and EF Schumacher’s Small is Beautiful.
It’s making me reflect on all the ways we could live our lives differently when this public health emergency is over. Let’s face it, we’ve known for decades that we can’t go on consuming resources in the way that we are and that maybe our own privileged lifestyle is built on the suffering of those less fortunate.
Up until now it seems it’s been easier for most of our leaders to push these realities aside as too difficult or inconvenient to deal with. Supporters of Lovelock might say that this virus is Gaia’s way of forcing the issue.
One of the issues most visible to all of us at the moment is globalisation. Not only how it enables the rapid spread of a virus but also how it leaves our supply chains exposed in times of crisis.
The result is shortages of vital goods like protective equipment for health workers, pharmaceuticals and electronic components plus (perhaps most obvious to the average person) certain foods and household necessities. Business resilience is being challenged around the world.
Why does a pandemic create stress in global supply chains?
The globalisation of supply chains really took off in the 1990s. The rapid improvement in digital technology led to the development of Enterprise Resource Planning (ERP) systems that eventually enabled even relatively small businesses to reap the economic benefits of ‘Just-In-Time’ stock management.
Consumer demands could be met while sourcing goods from countries around the world that could supply them more cheaply, usually due to lower labour costs. Most Western countries have seen a mass move away from manufacturing and an increasing reliance on goods from countries such as China and India.
The fact that Covid 19 first took hold in China meant it had a devastating effect on one of the world’s largest manufacturing and logistics centres. I can’t help thinking that we’ve ignored the old proverb – ‘don’t put all your eggs in one basket’.
It might be argued that now Covid 19 is affecting the UK, local supply chains would be just as severely impacted as global ones. However, there are several reasons why the impact would be easier to manage at a local level and therefore less severe.
Why communities should develop resilience against a pandemic by supporting local supply chains
When operating under ‘business as usual’ conditions, global supply chains (leaving aside the ethical and environmental concerns involved) can enable the efficient production of apparently low cost goods.
However, when we’re not in ‘business as usual’ they reveal their lack of agility when adapting to quickly changing conditions and levels of demand. And global supply chains suffer from disruption fairly often – in recent memory think not only Covid 19 but SARs, Brexit, floods, earthquakes and fires around the world.
By moving to using local supply chains, consumers and businesses would see the following benefits:
Sourcing goods globally usually involves a long chain of producer, possibly a sub-producer, distributor and logistics handling agents followed by transport times which can be up to 40 days for some goods coming by boat from China. Local suppliers usually have very short supply chains (you are often buying directly from the people who produced or grew the goods).
As a result, local suppliers can be more reactive to demand and offer greater certainty and predictability. Within days of people being asked to self-isolate and then stay at home, local suppliers in Brighton and Hove had organised and responded, often more efficiently than the big supermarkets.
Brighton and Hove Food Partnership is keeping a list of local food suppliers that are meeting local needs during the pandemic: https://bhfood.org.uk/how-to-hub/local-veg-box-schemes-and-farmers-markets/. They are keeping us fed and supplied through a combination of newly created delivery schemes and sensible rationing levels.
Better customer service
Local suppliers will be closer to their customers. They understand their requirements and can predict changes in demand and taste like the current move to zero waste. This is supported by many local businesses in Brighton and Hove such as HISBE, Kindly, the Grocer and Grain, and Harriets of Hove. And if a customer service problem occurs, local businesses are far better placed to solve it.
Protection from currency fluctuations
Local suppliers tend to be smaller or even co-operatively owned. As such, they are not controlled by the short-term interests of investors or the stock markets. They are empowered to take long-term decisions that are better for customers, staff and our environment.
Why community energy groups provide assurance against a shock in energy prices
A significant portion of the UK’s energy is still generated from coal, natural gas or nuclear fuels. We import coal from Russia, gas from Norway and uranium from Kazakhstan. That makes us vulnerable not only to currency fluctuations, which can cause price rises, but also to potential breakdowns in diplomatic relations or other global disruptions, which can lead to interruptions to supply.
In September 2019, the Guardian reported that almost 7% of the UK’s total demand for electricity is imported from Europe . Although this is a small share, experts have warned that our market price for electricity could rise because of a fall in the value of the pound against the Euro and because of the potentially costly complications of cutting ties with EU energy markets.
By investing in developing our own community-based energy sources, we’re protecting ourselves against global disruptions and shocks in commodity prices.
BHESCo is already demonstrating that schools, churches, and other public buildings are ideal candidates for renewable energy. These buildings are used during the daytime when solar power is generated and usually have large roofs to hold lots of solar panels.
Another good example of local energy generation in Brighton and Hove is The Big Lemon’s electric buses. The company runs a network of public transport using zero emission vehicles powered by solar panels on the roof of the bus depot.
It’s not just solar power that can contribute to community-based energy provision though. Locally produced food waste from restaurants, hotels and bars can be diverted to anaerobic digesters where it’s turned into green gas and some communities may be suitable for low carbon heat networks.
Heat networks involve the installation of a communal heat source, such as a ground source heat pump or biomass boiler, which is then used to provide heat and hot water to a number of connected homes. They work particularly well in small villages or when serving large blocks of flats.
Of course, community-based energy projects have benefits over and above protecting from energy price hikes and interruptions to supply. They produce sustainable energy with a low carbon footprint and use that energy more efficiently because generating and using energy locally cuts down on transmission losses.
Community energy projects employ local traders and installers, supporting local business and stimulating the local economy. Because they are owned by local residents, any profits made can be reinvested into developing more locally owned energy projects instead of being paid as interest to community shareholders.
Community energy groups also often spend a portion of their revenue on tackling fuel poverty and improving the energy efficiency of cold homes in the area. This benefits individual households, but can also alleviate pressures on local health services as physical and mental wellbeing improve.
Ultimately, when services are owned and run by the people they serve, they are more responsible, democratic and sustainable.
If Covid 19 has caused you to think about some of the downsides that globalisation brings and reflect on the benefits we’re currently seeing when our communities come together to help in times of need, why not consider joining your local community energy co-op.
Explore our website for information and inspiration or use our contact form to get in touch.
What do you think?
Join the conversation and leave a comment below: