To save the Amazon, hit Bolsonaro where it hurts — agricultural exports

People across the world reacted with shock as fires raged in the Amazon rainforest over August. They were outraged at Brazilian president Jair Bolsanaro’s response (or lack thereof). Not only had Bolsonaro’s rhetoric of exploiting the Amazon and his weakening of environmental protections fuelled the fires, he then had the effrontery to blame the fires on NGOs — a baseless claim.

The August fires are an escalation of an already alarming spike in deforestation since Bolsonaro came to power. Wildfires are common during the dry season, but the extent of the recent fires is not — the Brazilian National Institute for Space Research (INPE) published data showing that fires are up 84% compared to the same time last year. Experts believe that many of the fires were deliberately lit by farmers and ranchers to clear land.

The fires have thrust the issue of the destruction of the Amazon into the spotlight and Bolsonaro has come under international pressure to address the situation. While such pressure could help the situation, it will only be effective if it is channelled to implement measures that persist long after the fires are extinguished and well beyond the short attention span of celebrities. Otherwise, any impact is likely to be a dead cat bounce for the Amazon.

To date, actions from world leaders have not been strong enough to have a lasting and meaningful impact. Most leaders have condemned Brazil’s handling of the issue, but Bolsonaro is not the kind of person that is influenced by the moral outrage of the West — quite the opposite. In response the French President Macron’s call for action, he accused the French president of having “a colonial mindset”.

The G7 recently agreed a $20m package to help Amazon countries to fight wildfires. However, while this package might help solve the immediate problem, it will do little to solve the wider issue of deforestation — it is a bit like treating the symptoms of a disease with painkillers.

Around 17% of the Amazon has been lost in the last 50 years and there has been an alarming escalation in the rate of deforestation since Bolsonaro came to power. Satellite data released by the Brazilian National Institute for Space Research (INPE) shows that deforestation increased by 88% and 278% in June and July 2019 respectively compared to the same months last year. Bolsanaro reacted by sacking the head of the INPE, Ricardo Galvão.

The Amazon cannot withstand relentless deforestation indefinitely. Scientists believe that a tipping point could be reached when the total loss reaches 20–25%. Beyond this point, the Amazon could enter a death spiral and transform into a degraded savannah.

Losing the Amazon would have a devastating impact on the world. If it falls, our goals to arrest global warming and biodiversity loss will almost certainly slip beyond reach and there will be irreversible damage to vital ecosystems and local climates. That’s not to mention the direct impact on the millions who depend on the forest.

To avert the collapse of the Amazon, drastic action is needed to address the main drivers of deforestation — land clearing for cattle and soy. Numerous carrot and stick approaches have been tried over the years, but these have ultimately failed to stop further deforestation. Since coming to power, Bolsonaro has exacerbated the issue by weakening the ‘stick’ of the already insufficient environmental penalties.

To save the Amazon, the world needs to hit Bolsonaro where it hurts — agricultural exports. Farmers and ranchers don’t clear the forest just for laughs, they only do so because the financial benefits outweigh the risks. Imposing new tariffs or quotas on beef and soybeans would impact local prices and fundamentally change the economics of their business model. Doing so, would surely turn farmers — who overwhelmingly support Bolsonaro — against him and halt further expansion of agriculture into the forest.

There is a clear rationale for tariffs — they are analogous to imposing a carbon tax to address a market failure. From an environmental perspective, clearing tropical rainforest for agriculture is possibly one of the worst exchanges of land use imaginable — such is the cost to the environment through loss of biodiversity and carbon capture. However, farmers and ranchers don’t bear these costs, which amounts to mispricing.

Tariffs are an extreme measure and are likely to hurt honest farmers who avoid working on deforested land. However, the current predicament is similarly serious and there are few other options left. Aside from the environmental damage, the reckless handling of the Amazon crisis to date threatens the lives of a million indigenous people. Economic sanctions have previously been imposed on other countries for less pressing matters. Besides, the tariffs could be removed in stages if certain environmental protection goals are met.

France and Ireland have indicated that they are willing to block the recent EU-Mercosur trade deal with the South American bloc over Brazil’s handling of the Amazon. Doing so would send a powerful message and would delay the reduction in existing tariffs.

China, however, has far more power to influence Brazil than Europe. China is the largest importer of Brazilian soybeans — it accounts for 80% of Brazil’s exports — and beef. Further, the trade spat with America will increase China’s appetite as it looks for replacement suppliers. If China threatened to freeze imports or increase tariffs unless stronger measures are taken to protect the Amazon, it would be virtually impossible for Bolsonaro to ignore.

In practice, however, China and the West are unlikely to impose additional tariffs or quotas on Brazil for fear of escalating global trade tensions. UK prime minister, Boris Johnson, summed up the West’s concerns at the G7 summit “I would be reluctant to do anything at this very difficult time for global free trade, to cancel another trade deal.” He offered a paltry £10m to tackle deforestation instead.

Once again then, it seems it will be up to communities and companies to take action. It may be time to pray for the Amazon after all.

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