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Under some circumstances, the supply of agricultural and other
commodities is driven by market failure, specifically prices which
do not internalise externalities (which fail to reflect
environmental, social and governance costs). Self-evidently, and as has been recongised globally since the UN's first Rio conference (in 1990), this compounds the climate and biodiversity emergencies. The following links provide charts and (in some cases) remarks concerning the scale of, and trends in, the trade of agricultural commodities which - under some circumstances - are associated with land-use change (including deforestation) and/or illegality.
** Note: one of the charts in this file illustrates great volatility in the unit price of rubber during the last two decades. Unit prices are likely to decline as the market for vehicles declines (in response to climate collapse, a lack of cheap carbon-free renewable electricity, etc.) That volatility helps explains why physical quantity not customs value should be the parameter for assessing trends in the size of the market. This webpage provides insights into the merits of proposals to require due diligence by Operators so that deforestation and other land-use change - and related illegality - is not embedded in products placed on the market. ("Operator" here is defined as whoever first places a product on the market of a country which requires that due diligence.) Such proposals (coupled with voluntary bilateral partnerships) have precedents - the EUTR (EU-27 and UK) and the amended Lacey Act (USA), whose focus is wood-based products. They also have weaknesses. Attempts to maximise the constructive impact of these regulations on global trade are conspicuous by abscence. This clearly handicaps efforts to adapt best practice to optimise the implementation of due diligence to the supply of other commodities. The flagship of those partnership agreements severely undermines potential to address land-use change for production of other commodities. It implicitly forviges fundamental illegalities - not least in order to accomodate a national certification scheme which focuses more on documentry compliance than on (1) what is actually happening and (2) the context. There is a risk that expediency by either or both parties to such agreements results in a "race to the bottom" in terms of regulatory quality, including through comparison with other countries. The regulations should refer to land-use change (explicitly including natural grassland, scrub, and natural forest). An explicit first step of due diligence should require that the Operator ascertains when the land-use change which established the source of supply for a product took place. |
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