We Deserve Forthright Answers About Environmental Policy Interventions
The European Union is committed to addressing the global issue of deforestation. According to its lofty ambitions, deforestation will be stopped and even reversed by 2030, after world leaders at the COP26 climate summit in Glasgow, Scotland in November 2021 pledged to turn the tide. A delay in the plan’s implementation, however, is already apparent. But have no fear; the European Union has a radical new plan that it promises will get us back on track.
The European Union Due Diligence Proposal is the official name for the proposed new EU regulation. Its goal is to increase accountability for corporations involved in deforestation throughout their supply chains. Some environmentalists see this as a positive development in the fight against deforestation. However, it is myopic and counterproductive in how it singles out certain goods and businesses.
The new law based on “due diligence” is shortsighted and faulty at its core. Its goal is to reduce deforestation by eliminating environmentally damaging processes from manufacturing to retail. Instead of adopting a comprehensive strategy, it singles out certain sectors for criticism (beef, cocoa, palm oil, and others).
Although other vegetable oils like rapeseed and olive (both of which are produced in Europe) are less land-efficient and cause more deforestation than palm oil, the EU has a history of unfairly targeting palm oil (imported from Malaysia and Indonesia) for special scrutiny while largely ignoring other vegetable oils. To produce the same quantity of oil, as much as 10 times more land is required versus palm oil. Under the cover of environmental protection, the EU’s move looks to be a naked attempt to intervene in the market to defend domestic companies against international rivals.
The European Union’s solution to this problem might potentially drive up food costs at a time when Europeans can least afford it. Brussels’s move to restrict access to foreign imports would boost costs for consumers by forcing many domestic producers to switch to more expensive alternatives. That seems very irresponsible in the midst of a crisis when the costs of basic necessities are already increasing due to inflation and cost of living pressures.
The European Union is showing the world how not to deal with deforestation. The role of government should be limited to providing incentives for sustainable behaviors rather than intervening in the market at will. There are industries like palm oil where government incentives are unnecessary because of the overwhelming demand for sustainable practices from consumers.
The Due Diligence Proposal is, unfortunately, a model of how virtue-signaling may win out over actual policy change. If the European Commission’s goal was to reduce deforestation, it would have investigated the factors leading to widespread tree cutting. Since it has already been shown that palm oil is the most land-efficient vegetable oil, it ought to be clear that limiting its imports would not contribute to efforts to reduce deforestation.
Our elected officials should be forthright and honest about how their policies will accomplish their goals. Decisions like this one in Europe may have far-reaching consequences for the rest of the globe in today’s linked, globalized economy driven by free trade. That’s why it’s bad for everyone when an influential regulatory agency like the European Commission makes a hasty intervention in the market that might increase prices and have a negative effect on the environment. The EU’s Due Diligence Proposal is not a step toward the collaborative effort that is needed to effectively combat deforestation.