What the Amazon rain forest tells us about globalization

Amazon FAO

Amazon rainforest to recover 30,000 hectares by 2023 (FAO, 2017)

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Peter Vanham, Media Lead, US and Industries, World Economic Forum


Can globalization and the fight against climate change co-exist? Or is the environment doomed to suffer as people fly, goods are shipped, and agriculture and industry tap international markets?

One place to look in order to answer these questions, is the Amazon rainforest: it’s the world’s largest storage space for carbon and a crucial node in our planet’s ecosystem.

If globalization there can happen without harming the environment, it probably can elsewhere too. But if it can’t, we may be headed for a collision, leading to climate disaster, de-globalization, or both.

At 670 million hectares, the Amazon rainforest is still easily the world’s largest rainforest – larger than Western Europe or India. You can wander in it for years, without ever seeing its edge (as some discoverers sadly found out). But in the last few decades, the rainforest shrank by about 20% due to deforestation.

 In the Brazilian Amazon, an area the size of France has been lost to deforestation.

In the Brazilian Amazon, an area the size of France had been lost to deforestation by 2016
Image: Philip Fearnside, Yale Environment 360, Yale School of Forestry & Environmental Studies. 2016

Many tried to stop the process of cutting the millennia-old forest. Some do it to protect indigenous groups from forcibly having to adjust to a more Western lifestyle. Others, like the World Wildlife Fund, stress the need to protect the forest’s unique biodiversity, with about a tenth of the world’s plants and species, including many yet undiscovered.

But combatting climate change has become an obvious third reason to root for the rainforest. By some estimates, more than a 100 billion tonnes of carbon are stored in it. To put that into perspective: that’s about 10 times the annual global carbon emissions from fossil fuels. If the trees that hold this carbon were cut, nothing else we do about climate change may matter.

Deforestation is a global issue

The reason why people cut the forest, however, has largely remained the same: to get more arable land for the farmers that live in its surroundings. This rings especially true for the inhabitants of Brazil, a country that is responsible for about 75% of its deforestation. (Other relevant “culprits” are Bolivia, Peru and Colombia. The five other countries in the Amazon basin play a lesser role.)

What does globalization have to do with this, though? Agriculture has, since ancient times, been the primary cause of deforestation. Europe’s fields were once primeval forests too. But, in our modern era, the demands for agricultural goods are no longer confined to domestic needs. Demand for Brazilian soy or beef is now, to a large degree, a factor of demand in the US or China. It is a factor of globalization.

So, can globalization and the Amazon rainforest co-exist? A number of analyses, news reports, and academic studies have looked into this question over the years. Their findings are often disheartening, sometimes hopeful, but often inconclusive. In the end, globalization is just one of many factors in the socio-economic and political factors that cause deforestation.

So what do the studies say? We will focus on Brazil, as it accounts for the largest part of the Amazon and its deforestation. First, it seems self-evident why a globalized agricultural market would demand the expansion of arable and pasturable land in Brazil. South America’s largest country is a big exporter of many agricultural commodities. According to the OECD, Brazil will account for almost half of world sugar exports by 2026, and 47% of global soybean volumes, with global demand for each growing rapidly from now until then.

With such vast and growing international demand, it is not hard to see why the Amazon rainforest would get cut. One study of the University of Sao Paulo, looking at historical data until 2007, confirmed that basic correlation. It found that at a municipal level in Brazil, increased openness to trade historically led to more deforestation, though some exceptions were found.

Other studies indicated a starker reality still. One government programme intended for poverty alleviation among farmers, actually reconfigured many Amazonian livelihoods away from diversified agriculture to a strong engagement with the global cattle economy, according to a study from the Universities of Wisconsin and Florida.

Though cattle farming theoretically provided farmers with better incomes, it also put pressure on the forest. More than 80% of cleared areas in the Brazilian Amazon are dedicated to pasture formation, the study noted. In this case, the effect of global economic forces was clearly detrimental. The transnational cattle industry kept farmers in a tight grip, forcing them to expand pasturable land in the Amazonian basin.

A race to the top

But globalization can be a force for good, too, some researchers believe. Just as there can be a race to the bottom from globalization, there can be one to the top, too. Consumers of agricultural products in global markets may be more likely to demand a product that is produced sustainably, putting pressure on producers to do their part.

American and Brazilian researchers saw these “Opportunities for Conservation” as a possible consequence of the globalization of the soy and beef industry as early as 2004. Since then, deforestation rates in the Amazon did decline, WWF wrote, although they continue at an alarming rate, and it is unclear whether global consumer pressures had anything to do with the decline.

Ultimately, it seems, globalization can be both bad and not quite so bad. In its rawest forms, an internationally integrated economy will simply procure more goods from where it can get them. If an invisible hand were to organize this particular market, the Amazon forest and climate as a whole would likely suffer. So far, that is, by and large, what has happened in the Amazonian basin.

Luckily though, several stakeholders in our global economic ecosystem do sometimes provide more positive incentives and pressures. They too can play a role in the outcome of the globalization vs. climate change equation. Sometimes, that positive consumer effect already exists: several large multinationals committed to sustainable procurement of cocoa or palm oil, for example. The Tropical Forest Alliance, an initiative hosted by the World Economic Forum, is working with the Colombian government and businesses to protect the Amazon from commodity-driven deforestation.

Ultimately, it is up to policymakers, law enforcers, and society as a whole to put its priorities, and to ensure the sustainability of the economy and the environment. If they get it right, there is a possibility that globalization and a healthy rainforest can co-exist. If they don’t, the adverse consequences will be carried by all of us.

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