Trade and biodiversity loss: disentangling the complexities for effective policy action

Synthesis

INTRODUCTION

There is ample evidence that international trade in agriculture contributes to ecosystem degradation and biodiversity loss (Lenzen et al. 2012, Notarnicola et al. 2017, Chaudhary and Brooks 2018, Crenna et al. 2019, Wedeux and Schulmeister-Oldenhove 2021). This is particularly the case with regards to cash crops such as coffee, cocoa, palm oil, and soybean, which feature a high degree of tradability and/or export orientation and are primarily sourced from tropical, often biodiversity-rich areas (see, e.g., Fearnside 2001, Koh and Wilcove 2007, Philpott et al. 2008). International trade drives their increased production, which exerts multiple pressures on biodiversity, ecosystems, and the services they provide, for example, based on conversion of forest to cropland, increased groundwater demands, or pollution (for an overview, see Donald 2004).

Trade-driven biodiversity loss highlights the responsibility of consuming countries. The trade-led nature of the problem calls for trade policy responses on their part in the form of safeguards to prevent negative biodiversity impacts or supportive measures to amplify positive impacts (IEEP et al. 2021, UNEP-TESS 2023). The underlying theory of change is that (unsustainable) trade is a driver of biodiversity loss, but if structured more sustainably, international commerce can help to protect our planet’s natural resources (United Nations Conference on Trade and Development [UNCTAD] 2021a).

Although the above theory of change is clear (trade → biodiversity pressure/impacts → trade policy response), its operationalization is far from straightforward. There is something elusive about the trade-biodiversity interface when approached from a trade law and policy angle. On the one hand, this may be due to the “abstractness and breadth of biodiversity as currently conceived” (Morar et al. 2015:18), which complicates the precise definition of relevant trade policy responses. On the other hand, there are structural limits to integrating trade and biodiversity objectives, tensions between social-ecological framings and international trade law and policy, and difficulties in attuning trade rationales to the protection of biodiversity, ecosystems, and the services they provide.

In this article, we explore the connections between biodiversity and trade, and discuss how trade policy can better incorporate biodiversity. We focus on trade in agricultural commodities to illustrate the complex interface between trade and biodiversity. We adopt an interdisciplinary approach that examines trade policy in relation to the structural dynamics of agricultural commodity trade, drawing insights from social-ecological system frameworks. This enables us to uncover structural tensions between trade dynamics and biodiversity. By highlighting these tensions, we aim to illustrate the challenges of integrating biodiversity into trade and to critically examine the prevailing policy narratives about “harnessing trade for biodiversity.” Through this perspective, we seek to contribute to the ongoing policy debate on trade and biodiversity, with a focus on identifying potential transition pathways for reconciling trade practices with biodiversity conservation. The article begins by summarizing the evolving definitions, narratives, and framings of biodiversity and their implications for trade policy. It then examines how international trade is linked to biodiversity loss but can also promote biodiversity. Our study highlights the tensions between efficiency gains from trade and the ecological functions of diverse farming systems, including some important caveats. Finally, the article provides an overview of possible transition pathways to reconcile trade and biodiversity, from fundamental reforms to incremental changes.

DEFINING BIODIVERSITY: IMPLICATIONS FOR TRADE POLICY

Before addressing how trade impacts biodiversity, it is necessary to critically assess how biodiversity is defined. The following section discusses the definitional complexities around the concept of “biodiversity,” introduces different framings of biodiversity, and points to implications for corresponding analysis of trade policy.

Definitional complexities

The Convention on Biological Diversity (CBD 1992) defines biodiversity as: “the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems” (CBD 1992: art. 2). This definition is widely used in policymaking, serving as a reference point for many international agreements, national strategies, and regional frameworks that aim to address biodiversity loss and promote sustainable development. International dialogue and action have further progressed toward designing and implementing specific targets and mechanisms. An example of this is Target 15 of the Kunming-Montreal Global Biodiversity Framework and the action plans, tools, and procedures set under different CBD Protocols and monitoring mechanisms.

Although the CBD definition is internationally accepted, its application can vary significantly depending on the respective context and policy environment. Furthermore, in academia, a range of disciplinary perspectives exist on the conception and operationalization of biodiversity and even the value of the concept itself (Santana 2014, Burch-Brown and Archer 2017, Baldauf and de Oliveira Lunardi 2020). Debates revolve around several dimensions of the concept, such as the scope of ecological components covered (e.g., species, genes, ecological processes, and/or ecosystems), the characterization of diversity (e.g., native vs. human-generated diversity), as well as its spatial (e.g., local vs. global) and temporal scale (e.g., present diversity vs. past, present, and future diversity) (DeLong 1996, Koricheva and Siipi 2004, Casetta et al. 2019). Different framings of biodiversity stem from “various ways of understanding and connecting with nature,” resulting in a wide range of “values of nature” (IPBES 2022:18).

The different ways biodiversity is conceptualized and applied pose challenges for integrating biodiversity concerns into policies (Sarkar and Margules 2002, Meinard et al. 2019). Below, we highlight three key sources of complexity in the operationalization of biodiversity that have significant implications specifically for trade policy.

First, biodiversity per se cannot be quantified due to its multidimensionality as well as the covariance of its components and their lack of commensurability (Morar et al. 2015). This leads to using surrogates/proxies (e.g., species richness and evenness) whose adequate selection and use have long been debated by scientists (Sarkar 2002, Sarkar and Margules 2002, Morar et al. 2015). Many practical and conceptual challenges regarding biodiversity assessment remain, particularly in view of a beyond-species approach (Casetta et al. 2019). The recently developed essential biodiversity variables (EBVs) framework aims to tackle these challenges by integrating and consolidating worldwide biodiversity assessment efforts (Pereira et al. 2013, Jetz et al. 2019).

Second, any assessment of biodiversity is scale-dependent (Borda-de-Água 2019). Biodiversity gains and losses can be assessed at multiple scales (plot, field, landscape, national, regional, and global) with complex trade-offs. It is thus key to conduct assessments at the spatial scales that are relevant to the policy purpose sought (Turkelboom et al. 2018). In this sense, the spatial scale also plays a role when evaluating the effect of various cropping systems on biodiversity. For example, there is widespread acceptance that “agroecological” approaches, which apply ecological principles to agriculture (HLPE 2019: 13), have a lesser impact on biodiversity locally. However, debates persist regarding whether these approaches could meet the world's food needs with the least global impact on biodiversity compared to “sustainable intensification” methods (Pearce 2018, Phalan 2018, Benton and Harwatt 2022). The latter methods aim to increase yields on existing land using fewer harmful inputs and with lesser impacts (HLPE 2019:15, “Green and grow” 2020:253).

Third, biodiversity assessments and measures must be context-specific (Diogo et al. 2022): the same practice (e.g., intensive farming) undertaken in different places (e.g., ecologically rich diversified ecosystems vs. areas with a low level of species endemism) can have different biodiversity impacts. Indeed, biodiversity is “spatially heterogeneous”: within a country or region, some areas are more ecologically rich or vulnerable than others (IEEP et al. 2021:35). Similarly, the extent to which Indigenous peoples and local communities depend on well-functioning ecosystems and their natural resources varies greatly across contexts. Further, the specificities of different commodity production systems need to be considered when evaluating the effects of various cropping systems on biodiversity. For some crops, such as coffee or cocoa, increased demand might be met with the lowest impact on biodiversity by increasing the area of low-intensity cropping (e.g., shade forest coffee and agroforestry coffee). For other crops, such as oil palm and soybean, which will not thrive in the shadow of other trees, future demand might be met with the least impact on biodiversity by seeking to sustainably intensify existing cropping systems (Donald 2004:33).

In policy debates, such complexities translate into multiple possible transition pathways to sustainable agriculture and biodiversity-friendly practices. At the science-policy interface, the High Level Panel of Experts for Food Security and Nutrition (HLPE) views both “sustainable intensification” and “agroecology” as viable transition pathways to sustainable food systems (HLPE 2019). The Kunming-Montreal Global Biodiversity Framework calls for a “substantial increase of the application of biodiversity friendly practices, such as sustainable intensification, agroecological and other innovative approaches” (COP15 2022: target 10).

Different narratives and framings

In order to better understand and address the challenges that arise at the interface of biodiversity and trade policy, it is necessary to further disentangle the complexity surrounding the conceptualization of biodiversity. The literature highlights two aspects for consideration: (1) the descriptive and normative dimensions of biodiversity; and (2) different framings of biodiversity. The various perspectives blend together in reality, as will be explained further below.

Morar et al. (2015) propose that biodiversity has a descriptive and a normative dimension, each of which brings about definitional challenges. The descriptive dimension is linked to the scientific realm and comprises the conceptualization of biodiversity in terms of variability among different units of life (Morar et al. 2015). This includes finding academic consensus about what these units and the differences between them are, as well as how they can best be measured (Sarkar 2002, Sarkar and Margules 2002, Morar et al. 2015). The normative dimension refers to how the biodiversity concept is intertwined with conservation efforts (Morar et al. 2015). Takacs (1996:xii) argues that with the development of the biodiversity concept, scientists stepped “outside of ‘value-neutral science’” to become advocates on behalf of biodiversity. Notably, proponents of critical social science argue that science can never be value-neutral (Funtowicz and Ravetz 1994). In any case, explicit hybridization of descriptive and normative dimensions within the biodiversity concept appears to be increasing. This development may be one reason for its immense popularity in public debates and widespread application in policy contexts (Toepfer 2019). Popular understandings of the concept are, however, often imprecise, fuzzy, and all-encompassing (Takacs 1996, Koricheva and Siipi 2004, Morar et al. 2015). In this way, biodiversity has simply become a stand-in for nature that is worth protecting. Such a value-driven conception of biodiversity leaves little room to distinguish between which aspects of biodiversity should be protected and which should not, and it also hinders the ability to base such decisions on empirically sound knowledge (Maier 2012). Some scientists thus call for efforts to complement the integrative function of the concept with a careful and more transparent separation of science and values (Toepfer 2019).

Since the mid-1980s, the biodiversity concept and the relative importance given to its descriptive and normative dimensions have been shaped by different framings and narratives (Louder and Wyborn 2020, Faith 2021). Faith (2021) distinguishes three different framings of the biodiversity concept: conservation biology framings, ecosystem service framings, and social-ecological framings.

Conservation biology framings point to the normative role of biodiversity in capturing all that is relevant to be conserved (Meine et al. 2006, Faith 2021). Conservation biologists tend to equate biodiversity with non-human living nature, and thereby highlight the value of individual units (e.g., species or pristine ecosystems) (Faith 2021, Pascual et al. 2021). These framings are situated in the context of conservation biology as a goal-oriented scientific discipline that aims to protect biodiversity (Sarkar and Margules 2002). They inform “land-sparing” paradigms and area-based conservation targets, including those under the Kunming-Montreal Global Biodiversity Framework. However, land sparing narratives have been criticized for overlooking the role of multi-functional agricultural landscapes in providing ecosystem services and for failing to conserve traditional agroecosystems (Tscharntke et al. 2012, Grass et al. 2021). Despite the obvious normative content in this field, it continues to feature discussions about the relative importance of norms and values as well as the possibility of value-free conservation science (Sarkar 2002, Pascual et al. 2021).

Ecosystem services framings link the rationales for conserving biodiversity to societal benefits (Mace et al. 2012, Faith 2021). These include critical ecosystem services to agriculture, such as pollination, biological pest control, maintenance of soil fertility, nutrient cycling, and hydrological services, but also livelihood options and cultural services (Power 2010). Ecosystem services framings tend to focus on values within ecosystems, with less emphasis on biodiversity values at regional and global scales as well as cross-scale dynamics (Kok et al. 2017, Faith 2021). Further, they are often linked to propositions of using economic values to mainstream biodiversity into decision-making (Atkinson et al. 2012, Seddon et al. 2016). This approach remains contested (McCauley 2006, Schröter et al. 2014, Lienhoop et al. 2015, Neuteleers and Engelen 2015, Silvertown 2015). A set of critiques thereby refers to the challenge of translating “the diversity of nature into a single measure” in view of the complexity and multidimensionality of the concept and the limited scientific knowledge available (Turnhout et al. 2013:154, Farnsworth et al. 2015).

More recently, social-ecological framings of biodiversity have been put forward, suggesting that biodiversity should serve not only the conservation of non-human living nature, but also sustainability and society’s environmental concerns in a broader sense (Faith 2021). Scientists have increasingly called for biodiversity narratives that place emphasis on human-nature connections and consider issues of social justice (Wyborn et al. 2020, Louder et al. 2021). Advocates of these more pluralistic framings of biodiversity further emphasize the need to better acknowledge the multiple goals and values of biodiversity, the multitude of drivers of biodiversity loss (including the different scales of these drivers), as well the various trade-offs that are linked with conservation actions (Pascual et al. 2021). With the shift of IPBES from ecosystem services toward “nature’s contributions to people” and the Kunming-Montreal Global Biodiversity Framework focusing on inclusive conservation, such social-ecological and pluralistic framings of biodiversity are increasingly influencing policymaking and thereby also shaping the conceptualization of biodiversity internationally (Díaz et al. 2018, IPBES 2019).

The three different framings mentioned above are not necessarily mutually exclusive; rather, they can collectively inform and shape global agreements and policy frameworks established to prevent and reverse the decline of biodiversity. For example, the objectives of the CBD combine conservation, ecosystem services, and social-ecological framings of biodiversity. The Kunming-Montreal Biodiversity Framework similarly integrates conservation (Goal A), sustainable use (Goal B), and benefit-sharing objectives (Goal C) (COP15 2022). The balance between conservation goals and framings emphasizing human-nature connections and social justice will depend on how area-based conservation targets are achieved in practice. There are multiple approaches available with different social and ecological implications (Sandbrook et al. 2023).

Implications for trade policy analysis

The complexities involved in defining and framing biodiversity have implications for trade policy analysis.

As noted, key definitional challenges involve diverging perspectives on how biodiversity can or should be operationalized combined with the need to use proxies to quantify biodiversity, as well as context-specific, scale-dependent, and time-variable assessments. These considerations invite caution when considering narratives about “biodiversity-friendly” production processes, “biodiversity-friendly” trade, and trade differentiations based on whether products are “biodiversity-friendly” or not. The mentioned definitional complexities can affect the feasibility and quality of assessments of biodiversity impacts of trade liberalization. For such quantitative assessments to be feasible, they need to concentrate on critical impact factors at explicitly defined scale levels (IEEP et al. 2021). In other words, trade policy needs to specify and prioritize key drivers of biodiversity loss and use substitutes for biodiversity, even though they do not capture the full complexity of biodiversity. The choice of suitable proxies gives rise to trade-offs: the more sophisticated they become, the more difficult it is to use them as convenient metrics for trade regulation purposes.

It is also important to acknowledge that different dimensions/framings of biodiversity bear different trade policy implications. Conservation biology framings imply setting limits on the locations as well as the amount of natural resources that can be exploited. From a trade policy standpoint, this entails an emphasis on trade prohibition and restrictions, including bans, quotas, and trade permits, which limit the amount of a natural resource that can be traded. Ecosystem services framings invite us to look at livelihood opportunities associated with the (sustainable) use of biodiversity. They also prompt us to ease apparent trade-offs between economic and environmental outcomes with regards to biodiversity protection. These trade-offs could be mitigated if economic accounting integrated the intangible values of nature and ecosystems, as suggested by various ecosystem service framings of biodiversity (IPBES 2019). Finally, social-ecological framings (with their emphasis on the multiple drivers of biodiversity losses, the various trade-offs of conservation activities, and social justice insights) offer valid explanations as to why trade policy and tools relevant to biodiversity frequently fall short of expectations. Viewed from a social-ecological angle, trade measures treat the symptoms (e.g., deforestation embedded in imports) without addressing the root causes of the problem (e.g., poverty in contexts where deforestation is related to the livelihoods of subsistence farmers). Accordingly, they are vulnerable to underenforcement, displacement, leakage, and spillovers, among other pathologies (Grabosky 1995, Bastos Lima et al. 2019, Meyfroidt et al. 2020, Sonderegger et al. 2022, Coenen et al. 2023). This occurs when “non-compliance and its manifestations are [...] shifted across time, space, or media” (Grabosky 1995:353). Examples include trade diversion to other markets if producing countries lose interest in catering to high-standard markets. Additionally, if the trade restriction solely targets forests, production may encroach into other ecosystems, such as wetlands. Finally, stringent regulatory approaches are at risk of spillovers when the burden of regulatory impacts is shifted to non-target interests and groups (Ituarte-Lima et al. 2019, Zhunusova et al. 2022). Social-ecological framings point to such downsides and regulatory failures, which typically arise from a misinterpretation of the causal chain upon which trade remedies seek to intervene (e.g., inadequate appreciation of poverty as a key driver of deforestation) (Grabosky 1995, Ituarte-Lima et al. 2019). It is important to keep all these dimensions in mind when discussing the way forward in trade regulation for biodiversity.

RE-ASSESSING THE TRADE-BIODIVERSITY INTERFACE

Having considered biodiversity in its complexities, we shall now move to the trade-biodiversity interface. Questions arise regarding the extent to which international trade can promote biodiversity, ecosystems, and the services they provide. Certainly, innovative business and trade models can support biodiversity conservation efforts. Sustainable trade of products and services derived from biodiversity, also known as BioTrade, is one such approach. Yet emphasis on BioTrade (inherently, a “niche” affair) risks missing the big picture, which points to structural trade-offs between the efficiency gains from trade and the ecological functions of diversified farming systems. The following section brings such tensions to the forefront while adding granularity and differentiation.

Back to the basics: structural trade-offs between the efficiency gains from trade and diversified farming systems

Various assessments document the growing pressures on species and habitats associated with international trade (Lenzen et al. 2012, Chaudhary and Brooks 2018). The drivers of biodiversity loss associated with trade are multiple and can be direct or indirect (IPBES 2019, Bellora et al. 2020, United Nations Environment Programme [UNEP] 2021). International trade directly affects biodiversity through, for example, emissions and habitat perturbation caused by cargo ships, global air cargo, and transport corridors (see, e.g., Teo et al. 2019, Simkins et al. 2023); the channeling of alien pests and invasive species through trade (e.g., Westphal et al. 2008); as well as wildlife trafficking (United Nations Office on Drugs and Crime [UNODC] 2020) and species overexploitation. Beyond such direct effects, trade further indirectly impacts biodiversity by driving structural changes that exert multiple biodiversity pressures. This is commonly associated with the “scale” effect of trade (Grossman and Krueger 1993, IEEP et al. 2021), referring to “the increased output or economic activity resulting from freer trade” (WTO, n.d.): in producing countries, trade-induced increase in commodity production causes changes in the use of land (e.g., conversion of forest to cropland) and/or other resources (e.g., increased water consumption or species overexploitation), or changes in their quality (e.g., reduced soil fertility, pollutants, and emissions impacting air, water, and soil). It also leads to changes in farm types and cropping systems, favoring specialized farming over diversified farming, as further discussed below.

The indirect impacts of trade point to structural trade-offs between trade openness and the ecological functions of diversified farming systems. These latter include functional biodiversity at the plot, field, or landscape scale via traditional/agroecological practices (Kremen et al. 2012), promoting agrobiodiversity. To better grasp these structural tensions, it is useful to go back to the basics: why international trade occurs. The basic underpinning of trade is the theory of comparative advantage, which posits that nations should specialize in the production of the goods for which they have the lowest opportunity cost (Ricardo 1817, Lake 1993). Across all sectors, international trade is structurally linked to patterns of specialization according to comparative advantages, endowments, and capabilities. In agriculture, “(t)rade causes specialization in production that drives specialization in ecosystems and their associated biodiversity” (Polasky et al. 2004:911). The interplay of international trade with economies of size and scale and other specialization drivers (Abson 2019, Campi et al. 2020) ultimately prompts a structural shift toward specialized ecosystems leading to the “uniformization of agricultural landscapes” (Bellora et al. 2020:10). It promotes the shift from diversified farming systems to specialized monocrop plantations, and encourages the widespread adoption of the most productive crop variety rather than using multiple genetic varieties of a single crop (Bellora et al. 2020:10, Rist et al. 2020). Although historically about 7000 plant species were cultivated for food, today only about 80 plant species contribute to food supplies globally, with half of all plant-based calories coming from three species (Rist et al. 2020). This issue relates to externalities, highlighting that the current regulatory framework fails to account for the external costs of bulk trade logistics, including the loss of agrobiodiversity.

It is also important to consider how commodity trading works. Apart from high-value commodities and niche players that cater to specialist markets, commodity trading is a low-margin business governed by economies of scale and the requirements of bulk (high-volume, low-cost) logistics (Trafigura 2019). The economic viability of this model rests on factors that “disenable” agrobiodiversity, such as cheap and uniform supply, product standardization/fungibility, and scales (Rist et al. 2020). This applies to fungible commodities that are traded in bulk, such as conventional grains, oilseeds, cotton, as well as “bulk” or “ordinary” cocoa beans. It is important to distinguish this from non-bulk commodities, which are low in volume but high in value. Examples include niche non-timber forest products and products that cater to specialty or ethical market segments, such as “fine flavour” or certified cocoa beans. These products are not traded in bulk.

The trade-related dynamics discussed above have supported intensive, specialized cropping systems, greatly impacting the richness of wild species, as well as the diversity of cultivated crops and farmed animals. Examples are ubiquitous: from the trade-led expansion of intensive banana plantations reliant on a single banana cultivar in the Philippines (Ortiz and Torres 2020); to the honey bee trade, resulting, for example, in losses, extinction, and/or genetic swamping of native honey bees in Anatolia (Kükrer et al. 2021); to industrial wheat, soybean, and corn production in the U.S. Midwestern states, which has eroded biodiversity and hindered long-term agroecosystem performance (Thaler et al. 2021). These examples point to trade-driven biodiversity impacts on genetic diversity and endemism (biodiversity in the narrow sense), but also to ecosystems and the services they provide (ecosystem services framing). Going one step further, international trade has conspicuously disrupted complex social-ecological systems (social institutions, practices, and governance processes) that enable diversified farming systems. In Mexico, for example, increased imports of (genetically modified) corn from the U.S. have threatened local maize varieties. This has had significant social-ecological impacts on Mestizo (of mixed European and Indigenous non-European ancestry), campesino (peasant), and Indigenous sectors, prompting inquiry into the “racialized” nature of trade liberalization in agriculture (Hernández-López 2022).

The above structural issues are heightened by the composition and direction of trade flows and their “ecosystem impact footprint.” By default, international trade disconnects production and consumption, transferring biodiversity loss associated with consumption outside the territorial boundaries of the consuming country. When trade transfers biodiversity pressures to countries with higher species richness and vulnerability, it leads to a net biodiversity loss. This is a common occurrence in the global commodity economy. Wealthier nations shift the production of primary commodities and related biodiversity pressures to lower-income countries through trade (Dittrich and Bringezu 2010, UNCTAD 2023). Because low-income countries (especially tropical, developing nations) host “the overwhelming majority of Earth’s biodiversity” (Barlow et al. 2018:517, Penny et al. 2020), international trade is shifting biodiversity pressures into ecologically sensitive locations (IRP 2019, Abman and Lundberg 2020).

In summary, there are multiple trade-related drivers of ecosystem degradation and biodiversity loss, both direct and indirect. Trade liberalization is generally associated with agroecosystem specialization, intensification, and concentration, with trade-offs between economic gains from trade and ecosystem functions. The problem is compounded by the direction and composition of trade flows: international trade is shifting biodiversity pressures onto lower-income countries known for their rich biodiversity and vulnerability.

Adding granularity and differentiation: some caveats

Specific exceptions and more theoretical arguments somewhat qualify the above narrative, albeit without overruling the broad structural trends described. Some caveats are presented below.

As discussed, an assessment of the potential biodiversity impacts of trade is sensitive to multiple temporal and/or spatial scales. Temporal considerations invite us to assess trade and biodiversity impacts dynamically over time. This involves looking both forward to future projections and backward at historical developments. Looking forward, a common argument is that in the mid-to-long term, trade openness tends to be associated with economic growth and increased per capita income. This growth is expected to boost public and private demand for environmental goods and services that support biodiversity (WTO 2022:23). Therefore, it is expected that trade will promote biodiversity in the long run (WTO 2022). The argument is weak in practice if we consider at what pace biodiversity is lost and the urgency for immediate corrective action. When looking backward, the temporal aspect remains important in that it sheds light on different historical contributions to global environmental degradation. This is reflected in the principle of “common but differentiated responsibilities” (CBDR) enshrined in the 1992 United Nations Framework Convention on Climate Change. This principle acknowledges that countries at different stages of development have varying historical contributions to environmental problems and different present capabilities to address them (French 2000, Honkonen 2009, de Lucia 2012, Tomoi et al. 2022). It emphasizes the need for an equitable allocation of the costs of global environmental protection, taking into account past harm done.

The spatial dimension calls for assessing net biodiversity gains and losses at different scales in their complex trade-offs. In specific instances, trade can shift production from biodiversity hotspots to areas that are less biodiversity-rich, thus leading to net gains at an aggregate level (Verones et al. 2017). Yet, the opposite is often observed in practice. Another argument is that, on the whole, trade allows for a more efficient allocation of resources relative to autarky, which may, in theory, lead to resource sparing at the global level, in spite of biodiversity losses at more localized scales. However, such an assessment rests on contested assumptions about land sparing (Benton and Harwatt 2022) and fails to appreciate the spatial heterogeneity of biodiversity.

The above considerations bring in the “technique effect” or “innovation effect” of trade (Grossman and Krueger 1993). Open trade can drive technological advancements in more efficient production methods, e.g., precision and climate-smart agriculture (Aisenberg 2017). More generally, it can make “environmental goods and services” more accessible, such as solar panels, composting devices, and protective devices in fishing nets (WTO 2023). However, it is important to consider the environmental costs associated with producing these goods and services throughout their entire life cycle. Further, it is increasingly recognized that many technical innovations in agriculture and food systems have generated significant social and environmental externalities (for a review of the literature, HLPE 2019:54-55).

Important qualifications concern BioTrade. BioTrade refers to trade in products and services derived from native biodiversity. Examples include medicinal plants used in pharmaceuticals, essential oils and natural dyes for cosmetics, wild forest coffee, and crocodile skins. It is widely acknowledged that trade in BioTrade goods and services may provide incentives for their conservation and sustainable use while improving the livelihoods of local resource users (see, e.g., UNCTAD 2021b). The market potential for BioTrade goods has been estimated at USD 141 billion, with significant room for growth (UNCTAD 2015). Yet, the potential for scaling up BioTrade requires careful management: if access and use are not limited, overuse is inevitable as (trade-led) demand will grow. Further, too much emphasis on BioTrade distracts attention from the core issue (i.e., the structural ways in which trade specialization has impacted biodiversity and related social-ecological systems).

Similar considerations apply to trade in products from agroecological farming systems that support a regenerative use of natural resources and ecosystem services. Examples include agroforestry coffee or cocoa, if ecologically sustainable, as well as the produce of farms that practice ecologically sustainable farming practices within a homogenous landscape. At a landscape scale, commodities sourced from eco-agricultural landscapes under integrated landscape/watershed management that foster biodiversity are also considered. If well managed, these farming systems provide incentives for the sustainable use of natural resources and biodiversity (Kremen et al. 2012, Bürgi Bonanomi and Tribaldos 2020). However, if genuinely sustainable, they can supply export markets to a limited extent only, for example by catering to market segments associated with traceability, low volumes, and high embedded value. When it comes to staple foods, diversified farming systems that incorporate functional biodiversity at the plot and field scale are typically locally embedded and territorial: they provide for subsistence and local markets but do not produce a tradable surplus of standard products at a scale economically viable for conventional global trade.

It is important to consider one last caveat: the relationship between governance factors and “unsustainable” trade patterns. From an institutional point of view, trade is not the problem per se: unsustainable trade builds on governance gaps that result in biodiversity loss. These governance gaps may manifest in various ways, such as lax pesticide regulations, poor forest management, as well as poorly defined or unjustly allocated property rights and weak common ownership regimes that lead to overuse of shared resources. In other words, low environmental standards and poor governance are factored in the calculation of a country’s comparative advantages, capabilities, and endowments, upon which patterns of agriculture specialization and trade are defined. From a policy perspective, this implies that demand-side trade measures (adopted by consuming countries) are the second-best instrument to tackle biodiversity losses in producing countries. For example, it has been observed that it would be less costly and more effective if Indonesia and Malaysia restricted their palm oil production and forest land conversion domestically instead of relying on trade restrictions by importing countries (Taheripour et al. 2019). However, these countries are locked into unsustainable production systems by virtue of their export specialization patterns. Thus the need for policy coherence between trade measures by consuming countries and domestic policies implemented in producing countries.

POTENTIAL TRANSITION PATHWAYS IN THE TRADE GOVERNANCE OF BIODIVERSITY

Advancing from the preceding assessments, this section looks ahead at how to better integrate biodiversity into trade policy. It does so by linking trade policy with approaches from the “beyond growth” discourse (for a review, Roberts and Henderson 2020, Likaj et al. 2022, Widuto et al. 2023) and with insights from the literature on sustainability transitions (Markard et al. 2012, Kivimaa and Kern 2016). By combining analytical categories and policy insights from these areas, we provide an overview of possible transition pathways to reconcile trade and biodiversity, ranging from sweeping reform to incremental changes. We first briefly outline fundamental ways of reconsidering trade and biodiversity, employing the notion of “degrowth” as a structuring concept (Martínez-Alier et al. 2010, Kallis 2011). We then explore more mainstream transition pathways that advocate for “green and inclusive” trade or “nature-positive” trade (UNEP-TESS 2023), while grounding these frameworks in social-ecological framings of biodiversity.

Radical “degrowth” alternatives: less trade

As discussed, trade liberalization is generally associated with agroecosystem specialization, intensification, and concentration, entailing trade-offs between the economic benefits of trade and ecosystem functions. These structural aspects raise concerns about the scale and breadth of international trade and its underlying power dynamics. They call attention to unsustainable consumption in importing countries as the principal driver underlying current trade patterns.

These structural considerations invite a “narrative shift” in the current trade and biodiversity debate: from the current emphasis on “harnessing trade for biodiversity” to reducing consumption and trade as part of a “degrowth” trajectory. “Degrowth” is both a concept and a grassroots movement rooted in ecological economics, social ecology, economic anthropology, and environmental and social activism (Martínez-Alier et al. 2010). It represents not only a conceptual framework but also a radical political initiative aimed at living better with less (Kallis 2011). It reflects a “Georgescu-Roegen-like belief that society has already overshot the biophysical limits of the Earth and is trending toward collapse” (Anderson 2012:84). This concern was raised in the 1972 Club of Rome report on the limits to growth (Meadows et al. 1972) and further explored through the “planetary boundaries” framework (Rockström et al. 2009, Richardson et al. 2023). The core idea is that only a shrinking or “steady-state” economy (Daly 1997, Anderson 2012) can maintain ecological well-being within planetary limits by regulating the rate of material and energy flow based on the finite regenerative and absorptive capacities of the global ecosystem.

The concept of degrowth calls for a reduction in consumption and trade, along with significant changes in socioeconomic structures and dynamics (Ariès 2007, Schneider et al. 2010, Kallis et al. 2012, Bonaiuti 2015, Kallis 2018). It requires changing mindsets and economic paradigms, linking with explicitly anti-capitalist positions (Kallis 2018, Hickel 2020) and epistemic critics of a hierarchical, ontological divide between nature and culture (IPBES 2022). The degrowth approach goes beyond mainstream ideas about “green and inclusive” trade or “nature-positive” trade (see below). These mainstream ideas are contested based on empirical evidence that casts doubt on the feasibility of keeping economic growth and trade expansion (no matter how “green”) within planetary boundaries (Ward et al. 2016, O'Neill et al. 2018, Hickel 2019, Hickel and Kallis 2020), even suggesting that “sustainable growth” may be “an oxymoron” in itself (Liselotte 2023:6).

Mainstream options: “green and inclusive” trade

Less politically controversial than “less trade,” the concept of “green and inclusive” trade (or “nature-friendly” or “nature-positive” trade) has emerged as the mainstream policy response to (trade-related) ecological breakdown (see, e.g., UNEP-TESS 2023). “Green and inclusive” trade is about changing the composition and structure of trade to deliver environmental and social goals. It focuses on what is being produced and how, as well as associated socio-environmental impacts. This trade policy stance links to the concept of “green and inclusive growth” (The World Bank 2012, World Economic Forum 2022). In some variants, it also aligns with framings that are neutral about growth, often characterized as “beyond growth,” “post-growth,” or “a-growth” (see, e.g., van den Bergh 2011, Jackson 2019, 2021, OECD 2020).

“Green and inclusive trade” implies “transformative” changes to the existing trade regime to deliver fundamentally different sustainability outcomes. Building on seminal concepts of “creative destruction” and “regime destabilization” (Kivimaa and Kern 2016), this involves combining innovations in socio-technical systems (“niches,” in the sustainability transitions literature) and changes in “regime rules.” The former refers to voluntary initiatives that incorporate biodiversity concerns into trade business models at enterprise and value chain (micro and meso) levels. The latter refers to reform options that alter economic framework conditions in ways favorable to alternatives. Key insights from the policy literature are briefly presented below.

Micro and meso level: voluntary initiatives

A wide range of voluntary initiatives promote the incorporation of biodiversity concerns into trade business models at enterprise and value chain levels. These initiatives include voluntary sustainability standards (VSS), also known as certification schemes and eco-labels, company pledges, and corporate codes of conduct (Lambin et al. 2018, UNEP 2021). VSS, in particular, have played a significant role in driving innovation within agricultural supply chains. They emerged to address regulatory gaps and to meet growing consumer demand for environmentally friendly products (Komives and Jackson 2014). Examples of VSS include Organic Agriculture, the Forest Stewardship Council, FairWild, or Rainforest Alliance. They are particularly prominent in the agricultural sector and often incorporate criteria for more biodiversity-friendly production, such as habitat protection, sustainable resource use, or pesticide use (see Tscharntke et al. 2015 and Potts et al. 2017 for overviews of biodiversity-related criteria in agricultural standards). Over time, VSS have gained traction and have gradually become more mainstream. They are also increasingly integrated into government regulations, e.g., are declared mandatory for certain products and regions or are referred to in international trade agreements (United Nations Forum on Sustainability Standards [UNFSS] 2020). For example, the EFTA-Indonesia trade agreement links trade preferences with sustainability standards established by the Roundtable on Sustainable Palm Oil (Bürgi Bonanomi and Tribaldos 2020).

Nonetheless, VSS uptake remains limited to certain products and regions. Further, synthesis research on their effectiveness shows mixed results and is often critical of their impacts (DeFries et al. 2017, Traldi 2021, Dietz et al. 2022), including as regards to deforestation and conservation (Komives et al. 2018, van der Ven et al. 2018, Dröge et al. 2024). Many limitations have been cited regarding both their design and implementation, including limited spatial reach, potential for leakage, lacking additionality, insufficient stakeholder involvement, and lacking context specificity (Meemken et al. 2021, van der Ven et al. 2021, Dietz and Grabs 2022, Sonderegger et al. 2022). Similar issues have been observed with other voluntary company commitments and policies (Garrett et al. 2021, Bishop and Carlson 2022, Villoria et al. 2022).

These limitations have led to growing emphasis on promoting green, inclusive trade through mandatory macro-level regulatory instruments. Although mandatory measures undoubtedly broaden the reach and impact of biodiversity-related governance, they experience many of the same design and implementation challenges as VSS. Overall, VSS continue to evolve and strive to overcome these obstacles. Through efforts by organizations such as ISEAL, VSS offer valuable insights for shaping effective trade policy measures targeting agricultural supply chains. Finally, VSS increasingly support the implementation of such measures by informing company due diligence procedures, for example.

Macro level: changing “trade regime” rules

Changes to existing “trade regime” rules are necessary to dislodge unsustainable production practices and create windows of opportunity to upscale sustainability innovations. Specifically, reforming trade rules to phase out environmentally harmful subsidies would address a significant trade distortion perpetuated by current rules (UNEP-TESS 2023, Remaking Trade Project 2024). Biodiversity-damaging subsidies are pervasive in both developed and developing countries (Gubler et al. 2020, Matthews and Karousakis 2022). They include fossil fuel subsidies, cheap fertilizers, and payments based on the land under cultivation, but also support for rural infrastructure and land consolidation without any ecological requirements (Gubler et al. 2020:6-7). These subsidies support and entrench agriculture and business models that greatly harm biodiversity. To a significant extent, their use is unconstrained by existing trade rules. Changes in trade rules to phase out or repurpose these domestic subsidies would significantly contribute to change economic frame conditions in agriculture.

Besides removing environmentally harmful subsidies, trade policy literature suggests implementing trade preferences for goods that meet biodiversity-related requirements while implementing trade restrictions for goods that harm biodiversity (Bellora et al. 2020, UNEP 2021, UNEP-TESS 2023). This approach is sensible when dealing with discrete environmental impacts, such as agrochemical toxicity. But it presents practical challenges with respect to biodiversity framed in social-ecological terms. Categorizing products based on their biodiversity footprint raises complex methodological issues because any assessment of biodiversity is dependent on scale and context. There is a disconnect between trade regulation (typically modeled at the sectoral or national level) and biodiversity impacts that occur at specific spatial levels within a country (e.g., landscape level or lower) (IEEP et al. 2021). Another challenge is integrating social-ecological systems thinking into the design and functioning of trade measures. Trade measures address the symptoms of biodiversity loss rather than the underlying causes, which may result in underenforcement, displacement, and spillover effects. These challenges highlight the need to better integrate trade policies with social-ecological understandings of biodiversity, as discussed below.

Deepening mainstream options: embedding trade measures in social-ecological framings of biodiversity

An approach to refine and reorient the mainstream narrative of “green and inclusive” trade is to more thoroughly integrate it with social-ecological framings of biodiversity. This involves specifying trade restrictions through participatory processes and context-sensitive particularization, and embedding trade promotion measures in regulatory safeguards. This section outlines these policy design features in light of earlier discussions. However, it does not address the practical steps needed to implement such a policy transition. Numerous obstacles may stand in the way, including capacity issues, necessary regulatory reforms, and the involvement of the private sector, among others. Although this article suggests a reconfigured approach to trade policy, it does not set out a detailed roadmap for implementing the transition. The practical challenges of its realization merit focused attention in future research.

To mitigate risks of spillovers and regulatory failure, import restrictions adopted on biodiversity grounds must be firmly grounded in ecology and systems thinking and combined with trade incentives and supply-side measures. This means that, for example, the definition of deforestation, forest degradation, and sustainable/unsustainable harvesting operations should be carried out in context, locally, through a participatory process that acknowledges the complexities and specificities of social-ecological realities on the ground. Instruments and mechanisms upon which one may draw include participatory and inclusive procedures for a context-sensitive localization of requirements tested under the FLEGT Voluntary Partnership Agreements (European Commission 2003), legal instruments and approaches to foster access rights under the Escazú Agreement (2018) and the Nagoya Protocol (2010), and model procedures developed by academics and other stakeholders (Bürgi Bonanomi et al. 2023). At a more granular level, VSS offer valuable insights into stakeholder engagement processes and dynamics. At explicitly defined scales, an option is to leverage participatory and adaptive land management initiatives that seek ecological and social sustainability objectives at a landscape level (integrated landscape approaches) (Milder et al. 2014, Freeman et al. 2015, Kremen and Merenlender 2018). These frameworks create space for civil society and Indigenous people’s organizations to have their voices heard in defining “nature-friendly” products and practices. Social-ecological–sensitive trade restrictions should be complemented by supply-side initiatives to build capacity in producing countries to address biodiversity challenges. This includes financial and technological support and utilizing “aid for trade” to enhance biodiversity.

When considering trade promotion measures, an important issue is embedding these measures into regulatory safeguards that prevent resource overexploitation and protect the social-ecological systems supporting biodiversity. The approach is well exemplified by reference to BioTrade. While options for scaling up BioTrade should be fully explored, BioTrade requires exceptionally careful management. Trade-induced overuse of products sourced from native biodiversity (BioTrade) is inevitable if access and use of such products are not limited in some fashion. This reflects the “tragedy of the commons” in contexts where property rights or common ownership regimes over natural resources are weak (Hardin 1968). In trade policy terms, the promotion of BioTrade should thus occur within limits set by restrictive measures that limit the total amount of a natural resource that can be exploited and traded. The measures involved are production and trade quotas, in interplay with import and/or export licenses/permits. Their enforcement could be entrusted to those social-ecological systems that collectively manage biodiversity. The call is to build on participatory guarantee systems and other trust-based enforcement mechanisms at the local level, leveraging Indigenous peoples’ and local communities’ customary laws, community protocols, and procedures (Jacobi et al. 2023). This holds implications regarding ownership patterns: BioTrade sources should be subject to community management of some form - which encroaches on the tradability of permits under market-based management schemes. Finally, BioTrade (within set limits) should be connected to the enforcement of provisions on the fair and equitable sharing of benefits arising from the utilization of genetic resources (Nagoya Protocol 2010). Failure to do so could lead to the corporate appropriation of knowledge and genetic resources of local communities and Indigenous people, without full compensation. To avoid this, BioTrade should only occur through regulated contracts that are co-designed with Indigenous communities. This may involve amending contract and/or commercial laws in producing countries. These laws can be modified to require that contracts for the sale of BioTrade products include mandatory terms based on model contract agreements developed within national or regional frameworks on access and benefit-sharing.

To sum up, trade restrictions should be grounded in biodiversity metrics and criteria that are defined locally through participatory processes. Likewise, trade promotion measures should be anchored in regulatory safeguards that prevent overuse and protect the complex social-ecological systems’ underlying biodiversity. This invites us to combine perspectives and blur distinctions in trade policy analysis: “hard” trade measures “soften” through participatory processes and context-sensitive particularization, and “soft” trade promotion measures “harden” by linking with strong regulatory safeguards. In a related vein, disenabling/restrictive trade measures become somewhat enabling by linking with partnership approaches and supply-side measures, whereas enabling/promotional measures become somewhat disenabling once embedded in safeguard regulations.

CONCLUSION

This article has revisited mainstream narratives about the relationship between trade and biodiversity. Structural insights into the links between biodiversity and trade raise concerns about the current breadth and size of international trade. They highlight unsustainable consumption in importing countries as a major factor underlying trade patterns and biodiversity harms. Corresponding perspectives call for reducing consumption and trade according to a degrowth trajectory. More mainstream policy options focus on changing the composition and structure of trade to achieve sustainable results. This involves scaling up sustainability innovations tested by companies and supply chains and altering trade rules to promote sustainable practices. The challenge is to incorporate trade measures into biodiversity metrics and standards that consider the complex social and ecological aspects of biodiversity. Integrating trade policy into social-ecological framings of biodiversity involves transitioning from linear thinking (trade law and policy) to more integrative, holistic systems thinking (social-ecological analysis). This presents complexities and regulatory costs. Nevertheless, it is key to mitigate risks of regulatory failure associated with unilateral demand-side trade restrictions and to guard against misappropriation risks inherent in promoting biodiversity-based trade.

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