Did the bankers do the Amazon a favour?

Deforestation rates in Brazil nearly halved recently — the largest fall in two decades. Not bad for the country that, back in the 20th century, was so often portrayed in the media as losing a chunk of rainforest ‘the size of Wales’. That’s just one example of how the impacts of recession on the environment can tell us an awful lot about the way our economy works.

As a recent post revealed, economic downturn can have a significant upside for the planet. Just as energy use — and emissions — fell when the going got tough for the economy, so has global demand for products such as beef, soy and timber. And in the Brazilian state of Mato Grosso, the fall in demand for soy triggered a 65 per cent drop in deforestation.

There is nothing new in this: demand for commodities and forest destruction have been recognised as closely connected for decades.

The obvious danger here is that when the world economy recovers, demand for such products will again increase —and deforestation could rise again with it.

It’s a picture at odds with that of the late 1980s, when many economists exclusively blamed ‘irrational’ governments for promoting deforestation in the face of good economic sense.

Fighting the loggers
As for the Brazilian government’s involvement this time round, it deserves credit for what President Luiz Inácio Lula da Silva’s chief of staff, Dilma Rouseff, described as its ‘unprecedented’ campaign against illegal loggers and provision of economic alternatives to deforestation.

In the words of Paulo Adriano, director of Greenpeace’s programme in the Amazon: ‘Whenever the government followed the law, deforestation fell.’

Moreover, these efforts certainly enhance the Brazilian government´s credibility; at the moment, it is demanding billions of dollars from the international community to reduce deforestation even further, potentially preventing the release of billions of tonnes of carbon dioxide into the world´s atmosphere.

Crucial links
The link between good governance and falling deforestation is one thing. But the link between falling prosperity and falling deforestation is quite another — and one that presents a challenge for environmentalists.

On the one hand, it may make NGOs’ work quite a bit easier. Rather than haranguing developing countries’ governments into protecting their forests, they can target developed-country buyers of products like beef and palm oil.

This is exactly what Greenpeace did with its exposé of the Brazilian cattle industry last year, a move that led the country´s major beef suppliers to declare a moratorium on cattle from deforested areas.

On the other hand, though, the implications of the link are actually quite daunting. If deforestation was solely the result of marginal rural activities and poor governance, perhaps deforestation could be dealt with solely by offering economic alternatives to local people while focusing on governance in developing countries. When deforestation is driven by global demand, though, there is a risk that any gains made in one area will simply be displaced to another. For example, if cattle ranchers are prevented from deforesting in one area of the forest, they could simply shift to another area or even country to clear trees there.

Demand and consumption
So it should follow that any comprehensive global response to deforestation would address the issue of demand. Either it must be met by cultivating products like palm oil (the primary cause of deforestation in Southeast Asia) sustainably in areas which do not impact on forests, or the actual issue of consumption itself has to be addressed.

In fact, the palm oil industry has been trying to do the first of those two options for several years now, by establishing the Roundtable on Sustainable Palm Oil, a certification system which would allow developed country buyers to buy solely ‘sustainable’ palm oil. To date, though, supermarket chains have been loath to pay the premium required to purchase this, more expensive, palm oil. Given the prevalence of palm oil in 1 out of every 10 supermarket products, this suggests that, when it comes to deforestation, high consumer in developed countries need to share some of the responsibility.

This suggests that addressing the issue of global demand-driven deforestation will require a more substantial policy rethink. Greater efforts to enforce forest protection in tropical countries, or provide products more sustainably at a greater cost, are only likely to work if the issues of demand and consumption are also addressed.