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Electronic Trade Green Effect

Wednesday, April 27th, 2011
electronic trade

If you conduct your business affairs online, you can save thousands of trees and you can remove your carbon footprints. Are you ready to join the world movement toward ecofriendly Internet business?

These days, nearly everything goes online. We listen to music on the Net streaming service, read books on an e-book reader, and even go grocery shopping on Internet shopping malls. Export and import are certainly included in this growing sphere of business. You would likely agree that online commerce is cost efficient and time-saving, but is it eco-friendly? The answer is yes, and here is why.

Electronic trade (e-trade) in goods allows parties involved in trade and transport to submit electronic information to fulfill all import and export orders. E-trade is nowadays becoming essential to save both cost and time, and it also adds to the convenience of doing business. However, there is another big advantage of e-trade which is not well known. E-trade can help with the reduction of carbon dioxide.

E-trade does not require paper documentation. According to the Korea International Trade Association Institute for International Trade (KITA IIT), paperless trade saves 420 million pieces of A4 size paper a year. To produce one box of A4 paper, 4.3 trees are needed. Therefore, these 169,000 boxes of A4 size paper (420million pieces of paper) add up to 727,000 trees. Also, one tree absorbs 39.6kg of carbon dioxide per year. That means that 727,000 trees remove 28,000 ton of carbon dioxide gas from the air annually.

KITA has also surveyed the average travel distance for document processing of various business entities. Trading companies travel 11.3 km to banks, 41.4 km to customs offices, and 18.5 km to other entities to process an average of 3.6 documents. Shipping and air cargo companies travel 9.5 km to customs and another 14.9 km to other entities to clear 3.8 documents. Before e-trade was introduced, 107 million documents were delivered in Korea by cars for document processing. On average, each document was delivered by a vehicle driving between 9.5 km to 44.2 km, depending on the document. That adds up to a total of 135 million driven kilometers.

Based on the Korean Ministry of Environ- ment 2009 database, domestically produced cars emitted 209 g of carbon dioxide per km while imported cars generated 254 g of CO2 per km. Since the domestic cars’ market share is 94% and imported cars comprise 6%, the median carbon dioxide emission is 212 g per km. Therefore, when vehicles travel a distance of 135 million km in delivering documents, a total of 29,000 tons of carbon dioxide is emitted.

Thus, we could reduce a total of 58,000 tons of carbon dioxide - 29,000 from paper- less documentation and another 29,000 tons from not running cars. To absorb this amount of carbon dioxide we need 1.45 mil- lion trees. E-trade gives us the same effect by preserving the same numbers of trees. Considering the annual number of trees planted is 36 million, the preserved number of trees is 4% of the total trees planted per year in Korea. This amount of carbon dioxide ‘savings’ equals 260,000 cars not running for an entire month.

As of the end of 2009, the use of e-trade services in export clearance is around 98%, 72% for custom refund, and in foreign exchange about 42%. The Korean government is working on a single window system to implement a 100% paperless one stop e-trade system for export and import. At the same time, the government has been cooperating with other Asian countries and economic organizations to have mutual agreements in implementing similar systems. The future does, indeed, look greener than we might have been led to believe.

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