R.D. Garrett, J. Grabs, F. Cammelli, F. Gollnow, S.A. Levy · 2022
World Development

Should payments for environmental services be used to implement zero-deforestation supply chain policies? The case of soy in the Brazilian Cerrado

Over the past decade public and private actors have been developing a variety of new policy approaches for addressing agriculturally-driven deforestation linked to international supply chains. While payments for environmental services (PES) have been advocated in many contexts as an efficient and pro-poor environmental policy to incentivize conservation, they have been the subject of intense scrutiny and criticism for leading to mixed and sometimes adverse environmental and social outcomes. It remains unclear whether such an approach is an improvement over existing approaches to govern sustainability in supply chains and especially as a mechanism for reducing ecosystem conversion. Here we conduct an ex-ante analysis to examine the potential outcomes of using a standalone PES scheme versus existing standalone market exclusion mechanisms (MEM) to govern commodity supply chains. The analysis develops a theoretical framework to examine the potential effectiveness, cost-effectiveness, equity, and legitimacy of the two approaches and then applies this framework using qualitative analysis of secondary and interview data. Using this theory-driven evaluation approach we examine the case of the Brazilian Cerrado, where a PES mechanism is currently being proposed to achieve zero-deforestation targets in soy supply chains. We find that both standalone approaches suffer from different strengths and challenges and would be better used in combination. We conclude that a mixture of strict market exclusion with positive incentives and enabling programs that are targeted at the poorest farmers would be more effective, cost-effective, equitable, and legitimate. However, in the future such supply chain focused soy deforestation control efforts in the Cerrado must be complemented by broader jurisdictional approaches to addressing deforestation and sustainable development that include all land use actors, not just soy farmers. These more inclusive and balanced initiatives can help ensure that avoiding deforestation goes hand in hand with supporting sustainable livelihoods for a wider range of actors in the Cerrado.

Full publication is available on: DOI 10.1016/j.worlddev.2022.105814

Contributors from our Network

Rachael D. Garrett

Rachael D. Garrett
Environmental Policy Lab, Department of Humanities, Social and Political Sciences, ETH Zürich

Rachael Garrett is an Assistant Professor of Environmental Policy at ETH Zürich (Switzerland). Dr. Garrett's research examines interactions between land use, ecosystem services, and economic development at multiple spatial and temporal scales to better understand the drivers and impacts of land change and the effectiveness of existing conservation policies and practices. She is particularly interested in how commodity supply chains interact with environmental institutions to shape land use processes, resource distribution, and trade. Her research has largely focused on land change processes in agriculture-forest frontiers and sustainable intensification of pastures in the tropics. More recently she is leading a pan-tropical analysis of the effectiveness and equity of forest-focused supply chain policies with funding from the Swiss National Science Foundation and an ERC Starting Grant. This work involves coordinated research in Brazil, Ghana, Indonesia, and Ivory Coast on beef cattle, cocoa, oil palm, and soybean supply chains. Dr. Garrett received her doctorate at Stanford University and did her post-doctoral fellowship at Harvard University. Prior to working at ETH Zürich she was an Assistant Professor at Boston University.

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Federico Cammelli

Federico Cammelli
Environmental Policy Lab, Department of Humanities, Social and Political Sciences, ETH Zürich

Federico Cammelli is a postdoctoral researcher at the Environmental Policy Lab of ETH Zurich. He received his PhD in Economics from the Norwegian University of Life Sciences (NMBU). His research focuses on designing and assessing public and private policies to mitigate commodity driven deforestation and forest degradation in the Brazilian Amazon, Ghana and Côte d’Ivoire.

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Janina Grabs

Janina Grabs
ESADE Business School and Environmental Policy Lab, Department of Humanities, Social and Political Sciences, ETH Zürich

Janina Grabs is an Assistant Professor of Business and Society at the Department of Society, Politics and Sustainability at ESADE Business School, Barcelona. She received her PhD in Political Science from the University of Münster, Germany, and previously was a post-doctoral researcher at ETH Zurich and visiting researcher at Yale University. Her work focuses on the private governance of sustainability in global value chains, with a special focus on tropical agricultural commodities such as coffee and palm oil. Her work on the effectiveness of private sustainability governance in the coffee sector has been widely recognized, inter alia with ESG’s Oran R. Young Prize, APSA’s Virginia M. Walsh Dissertation Award, and ECPR’s Giandomenico Majone Prize, and is published in the book “Selling Sustainability Short? The Private Governance of Labor and the Environment in the Coffee Sector” (2020, Cambridge University Press), which received the AoM 2021 ONE Book Award. She has further published in leading peer-reviewed journals including Regulation & Governance, Business Strategy and the Environment, New Political Economy, the Journal of Economic Geography, Ecological Economics, and the Journal of Environmental Management. Janina is also a research fellow of the Earth System Governance project, is the Earth System Governance Journal’s Book Review Editor, serves on the Outreach Committee of the International Studies Association’s Environmental Studies Section, is a founding member of the ECPR Standing Group on Regulatory Governance’s Early Career Network, and sits on the Standing Group on Regulatory Governance’s Steering Committee.

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