Amman – Jordan’s foreign trade figures reveal part of the economic cost of exchanging goods, but they leave out an environmental account that does not appear in the trade balance. This includes the natural resources consumed, emissions generated during the production of imports and exports, and the resulting financial burdens and future risks.
Jordan’s imports reached approximately JD20.5 billion in 2025, compared with JD10.6 billion in total exports, leaving a trade deficit of nearly JD9.9 billion, according to Department of Statistics data.
However, these figures do not show how much water, energy and raw materials were used to produce traded goods, nor do they account for the environmental cost of pollution.
The issue extends beyond accounting figures to the local economy’s ability to withstand external shocks, particularly given Jordan’s reliance on imported fuel, essential commodities and production inputs.
Experts speaking to Al-Ghad say developing an environmental balance sheet to complement the traditional trade balance deserves consideration. This would involve linking import and export data to resource consumption, emissions, added value, employment opportunities and other indicators.
Rising Import Costs
Environmental and water affairs expert Dr. Mona Hindiyeh said Jordan’s reliance on imported goods with a high environmental footprint could become a source of economic vulnerability, particularly if the country continues depending on suppliers and products for which alternatives are difficult to find.
As environmental policies tighten worldwide, some of the costs incurred by producing countries to reduce emissions and energy consumption and comply with environmental requirements could be reflected in the prices of goods imported by Jordan. This comes as the Kingdom continues to import large quantities of fossil fuels despite its progress in renewable energy, she said.
Economically, this could become evident through higher import bills, increased production and transport costs, and ultimately higher prices for goods sold directly to consumers or lower profit margins for businesses.
Hindiyeh warned that rising import values without a corresponding increase in exports could contribute to a wider trade deficit. However, this outcome is possible rather than inevitable, as it depends on the scale of price increases, companies’ ability to improve efficiency and the diversification of supply sources.
She stressed the importance of distinguishing between the impact of restrictions on Jordanian imports and exports. The European Union’s Carbon Border Adjustment Mechanism (CBAM), which began its implementation phase at the start of this year, applies to specific goods entering the European market, including fertilizers, cement, iron and steel, and aluminum.
She explained that the mechanism does not impose a direct European charge on goods imported by Jordan for domestic consumption. However, for covered Jordanian exports, obligations imposed on European importers could affect purchasing prices and supplier selection, placing pressure on the competitiveness of products with high emissions.
Hindiyeh also noted that the traditional trade balance does not reflect the full environmental cost of trade because it records the monetary value of imports and exports without automatically deducting the damage caused by pollution or the depletion of water and other natural resources.
As a result, an imported product may appear inexpensive while carrying a hidden environmental footprint. The scale of this risk to Jordan cannot be accurately assessed without detailed information about the goods, their sources, associated emissions and available alternatives.
From an environmental and economic perspective, she said the best response is to incorporate energy and resource efficiency and environmental footprints into import and production decisions, diversify suppliers, support renewable energy and measure emissions from export-oriented industries.
Hindiyeh also highlighted the importance of considering the availability of resources in exporting countries when assessing the environmental impact of imported goods. A product’s environmental cost depends on the conditions under which it is produced, not simply on the quantity of resources consumed.
She cited the example of water consumption, explaining that using one cubic meter of water in an area suffering from groundwater depletion has a different environmental impact from consuming the same amount in a region with sufficient water resources within sustainable limits.
Therefore, she stressed that import assessments should consider the origin of resources, their scarcity, the season in which they are used, and the impact of production on local communities and ecosystems in the country of origin.
In Jordan’s case, importing certain water-intensive goods could help ease pressure on domestic water resources.
Interconnected Impacts
Asked how climate crises in exporting countries could increase the cost of Jordan’s imports and threaten supply chains, Hindiyeh identified several possible channels, including droughts, heatwaves and floods. These events can reduce agricultural output or disrupt factories, limiting exportable quantities and pushing prices higher.
The impact does not end there. Affected countries may impose export bans or restrictions to protect their domestic markets, forcing importers to seek alternative suppliers at higher costs.
She referred to research by the Organisation for Economic Co-operation and Development (OECD), which indicates that the damage is greater for countries that rely heavily on suppliers imposing such restrictions.
Transport routes and ports may also be damaged, while water levels in shipping channels may decline, delaying deliveries and increasing transport and storage costs.
Another example she cited was the impact of drought indicators on the Panama Canal, demonstrating how climate disruptions affecting a major trade route can influence global shipping, even in countries far removed from the affected area.
For Jordan, these developments could mean spending more money to secure the same quantities of goods, higher production input costs and delays in the arrival of certain products.
Hindiyeh believes that expanding low-emission export industries could genuinely reduce the environmental footprint. However, describing an industry as low-emission is not, by itself, sufficient to establish its sustainability.
She therefore called for life-cycle assessments of products, covering every stage from raw material extraction and manufacturing to transportation, use, recycling or final disposal.
She said such assessments should include water consumption and pressure on local resources, alongside emissions. It is also important to distinguish between lower emissions per unit of production and an actual reduction in total emissions, as an industry may become more efficient while a substantial expansion in output increases its overall environmental footprint.
Looking ahead, Hindiyeh believes the origin of goods and their production methods could become more important than price in shaping Jordan’s domestic trade choices. These factors may become decisive in certain sectors, particularly when they affect supply stability or compliance with market-entry requirements.
She noted that trade requirements are increasingly emphasizing product traceability, production methods and verification of supply-chain data, alongside price and quality.
This does not mean price will lose its importance, she explained. Rather, comparisons will increasingly focus on total costs and risks throughout the supply period.
A product that is cheaper at the time of purchase may ultimately prove more expensive because of its energy consumption, difficulties in demonstrating regulatory compliance, or exposure of its source to drought and production disruptions.
Conversely, a higher-priced supplier may offer better value if it provides an efficient product, reliable data and stable supplies.
Unclear Economic and Environmental Factors
Dr. Ahmad Awad, founder and director of the Phoenix Center for Economic and Informatics Studies, said that although Jordan’s trade balance figures are important, they are insufficient on their own to determine the full economic gains and costs of trade.
He explained that the figures record the value of what Jordan imports and exports but do not necessarily reveal the costs of depleting water and natural resources or the health and environmental damage associated with production.
This is where the concept of the environmental footprint of trade becomes important. It involves identifying the resources used and environmental impacts generated by producing and transporting goods, both inside and outside Jordan.
For example, the Kingdom may export a product that generates substantial revenue but consumes large quantities of groundwater from reserves that are already declining.
Awad raised several important questions, including how much economic and social benefit remains after accounting for the cost of water depletion and the expense of securing future alternatives. The same applies to products that generate pollution, the cost of treating which is ultimately borne by households and the public treasury.
Financial profits may be high, he said, but the net economic return could be lower than export figures suggest.
He noted that Jordan has data on trade, water and energy, but these figures need to be linked through regular accounting systems that show the quantity of resources consumed and emissions generated by each product, and compare them with domestic value added and the employment opportunities created.
He emphasized the need to identify water sources and assess their scarcity. Using water from an overexploited basin is different from using treated wastewater. Resource consumption should also be measured across the entire production chain, including imported inputs and transportation.
Regarding imports, Awad said part of their environmental burden occurs in the countries where goods are produced. This impact can be measured by tracking resources and emissions throughout supply chains.
Importing certain crops may help protect domestic water resources, he explained, but the overall environmental impact depends on the conditions under which those crops are produced and transported.
Awad pointed out that adopting an environmental balance sheet to complement the trade balance would help direct investment and incentives toward activities that generate better income and employment outcomes while consuming fewer resources.
It could also encourage local processing of raw materials, improve irrigation and energy efficiency, and promote water reuse instead of focusing solely on increasing export volumes.
He said such comparisons should also take into account job quality and the distribution of economic benefits, ensuring that profits do not become concentrated among a small group while the wider community bears the costs of pollution and water scarcity.
Awad warned that the absence of these calculations could lead to support for investments that appear economically viable but leave behind deferred costs. These may eventually emerge in water bills, public service expenses and healthcare costs paid by citizens.
Ultimately, he said, the success of trade should also be measured by its ability to improve people’s living standards and protect the natural resources on which they and their families depend.
Source: Al-Ghad
