Trading nature

Tropical countries are some of the largest global exporters of key agricultural commodities such as oil palm, rice, soybean, sugarcane and cassava. However, a team of NUS researchers has discovered that international trade costs these countries a combined $2.3 trillion (US$ 1.7 trillion) in environmental losses per year. The findings were published in the journal Ambio in March.

Led by Assistant Professor Roman Carrasco from NUS Biological Sciences, the team analysed data from 85 countries. This included estimates of land used to produce such commodities, imports, trade benefits, the biome that would be present if deforestation had not taken place, and the losses from forgone ecosystem services such as flood protection and carbon sequestration.

The findings revealed that the economic benefits from international trade are unable to compensate for the loss of forests and ecosystems required for crop and livestock production. Furthermore, the tropical countries are underpricing their exports, effectively subsidising consumption by importing countries. 

“Deforestation is supported under the assumption that the countries are better off by engaging in agricultural activities. However, our findings show that this is not necessarily the case,” explained Asst Prof Carrasco. He said there is an urgent need for tropical countries to rethink their land-use strategies to avoid serious environmental consequences.

The team is currently assessing measures, such as an ecosystem services tax or price premiums for environmentally friendly produce, which could lessen the environmental costs of deforestation while still meeting global demand for livestock and agricultural products.

See press release.