International trade causes large net economic losses in tropical countries via the destruction of ecosystem services

Deforestation As a Systemic Risk. The Case of Brazilian Bovine Leather

Tropical deforestation and forest degradation driven by agricultural commodity production remains one of the important sustainability challenges of our times. The responses to tropical deforestation so far have not managed to reverse global trends of forest loss, reigniting the discussion about more robust and systemic measures. The concept of deforestation risk is highly relevant for current debates about policy and trade, and likely to increase in importance in the context of the proposed EU Regulation on Deforestation-free Products and EU-Mercosur Trade Agreement. We argue that deforestation is a systemic risk that permeates through different economic sectors, including production, manufacturing, service and control sectors. International trade, investment and economic policies thus act as a systemic trap that cause the production sector to continue with nature’s destruction. This article seeks to more clearly define deforestation risk and uses the case of bovine leather from Brazil to illustrate how pressures for deforestation accumulate across economic sectors towards production, while deforestation risk is dispersed in an opposite trajectory. The article draws on multiple datasets and an extensive literature review. Included are quantitative data sources on annual slaughter, bovine hide/leather registry and annual deforestation, slaughterhouse and tannery locations. We argue that the EU banning unsustainable products from entry and putting incentives for more sustainable agricultural production in the tropics addresses deforestation risks that are currently visible and relatively easy to identify. These response mechanisms are conditioned upon traceability of deforestation risk across supply chains, which is prone to falsifications, leakage and laundry. Although proven to be essential, the proposed EU responses still miss out deeper leverage points to address the systemic drivers of deforestation coming from the manufacturing, service and control sectors that make production through deforestation profitable in the first place.

The Environmental Impacts of Agricultural Trade: A Systematic Literature Review

In line with the development of international trade, environmental concerns have arisen as a global problem. International trade has the potential to increase environmental externalities such as transboundary pollution, deforestation, transportation and production relocation avoiding environmental standards. The share of agricultural goods in total export reached 15% in 2017. Since 2002, the proportion of unprocessed agricultural products have more than doubled, while the volume of processed goods in global trade has tripled. Despite the importance of agricultural trade worldwide, the number of studies exploring the trade-agriculture-environment nexus has so far been limited. This paper aims to provide an overview of the environmental impacts of agricultural trade based on the international economics literature published in recent years by way of a systematic literature review. Results suggest that most recent environmental studies do not view extended trade or trade liberalization in agriculture favourably. Only a limited number of papers state that a country or countries’ environment could benefit from agricultural trade, and only a few researchers have found that agricultural trade did not have any significant influence at all, or have instead found the effects on the environment to be ambiguous. Finally, the research reveals the most important consequences of pollution and offers potential solutions.

Pastoralists in a changing environment: The competition for grazing land in and around the W Biosphere Reserve, Benin Republic

Pastoralists face increasing competition for land with crop farmers and nature in and around the W Biosphere Reserve (WBR) in Benin. Our aim was to describe and analyse land use changes in order to understand their drivers, and to describe and analyse the viewpoints of relevant stakeholders in order to understand the competition for land. To this end, remote sensing data, regional statistics, and survey data were collected. We found that crop land expansion around the WBR was the direct driver of decrease of the grazing land area. Population growth and rising demand for food crops, and government support to the cotton sector were indirect drivers of grazing land reduction. Furthermore, competing claims on land among users arose from the complex interaction of crop expansion, presence of WBR and the way it is governed, the lack of support to pastoralists, and the increasing shift of pastoralists' lifestyle into one of settled crop farmers. Pastoralism is under threat and its survival depends on the successful implementation of policies to support pastoralists and protect grazing lands.

Unsustainable development pathways caused by tropical deforestation

Global sustainability strategies require assessing whether countries' development trajectories are sustainable over time. However, sustainability assessments are limited because losses of natural capital and its ecosystem services through deforestation have not been comprehensively incorporated into national accounts. We update the national accounts of 80 nations that underwent tropical deforestation from 2000 to 2012 and evaluate their development trajectories using weak and strong sustainability criteria. Weak sustainability requires that countries do not decrease their aggregate capital over time. We adopt a strong sustainability criterion that countries do not decrease the value of their forest ecosystem services with respect to the year 2000. We identify several groups of countries: countries, such as Sri Lanka, Bangladesh, and India, that present sustainable development trajectories under both weak and strong sustainability criteria; countries, such as Brazil, Peru, and Indonesia, that present weak sustainable development but fail the strong sustainability criterion as a result of rapid losses of ecosystem services; countries, such as Madagascar, Laos, and Papua New Guinea, that present unsustainable development pathways as a result of deforestation; and countries, such as Democratic Republic of Congo and Sierra Leone, in which deforestation aggravates already unsustainable pathways. Our results reveal a large number of countries where tropical deforestation is both damaging to nature and not compensated by development in other sectors, thus compromising the well-being of their future generations.

Linking national wood consumption with global biodiversity and ecosystem service losses

Identifying the global hotspots of forestry driven species, ecosystem services losses and informing the consuming nations of their environmental footprint domestically and abroad is essential to design demand side interventions and induce sustainable production methods. Here we first use countryside species area relationship model to project species extinctions of four vertebrate taxa (mammals, birds, amphibians and reptiles) due to forest land use in 174 countries. We combine the projected extinctions with a global database on the monetary value of ecosystem services provided by different biomes and with bilateral trade data of wood products to calculate species extinctions and ecosystem services losses inflicted by national wood consumption and international wood trade. Results show that globally a total of 485 species are projected to go extinct due to current forest land use. About 32% of this projected loss can be attributed to land use devoted for export production. However, under the counterfactual scenario with the same consumption levels but no international trade of wood products, an additional 334 species are projected to go extinct. Globally, we find that losses of ecosystem services worth $1.5trillion/year are embodied in the timber trade. Compared to high-income nations, tropical countries such as Philippines, Nicaragua, Sri Lanka, Gambia and Bolivia presented the highest net ecosystem services losses (>3000US$/ha/year) that could not be compensated through current land rents, indicating underpriced exports. Small tropical countries also gained much lower rents per species extinction suffered. These results can help internalize these costs into the global trade through financial compensation mechanisms such as REDD+ or through price premiums on wood sourced from these countries. Overall the results can provide valuable insights for devising national strategies to meet several of the global Aichi 2020 biodiversity targets and can also be useful for life cycle assessment and product labelling schemes.