Leakage does not fully offset soy supply-chain efforts to reduce deforestation in Brazil

Related GLP Member: Rachael Garrett, Florian Gollnow, Kimberly Carlson


Zero-deforestation supply chain policies that leverage the market power of commodity buyers to change agricultural producer behavior can reduce forest clearing in regions with rapid commodity expansion and weak forest governance. Yet leakage—when deforestation is pushed to other regions—may dilute the global effectiveness of regionally successful policies. Here we show that domestic leakage offsets 43-50% of the avoided deforestation induced by existing and proposed zero-deforestation supply chain policies in Brazil’s soy sector. However, cross-border leakage is insignificant (<3%) because soybean production is displaced to existing U.S. farmland. Eliminating deforestation from the supply chains of all firms exporting Brazilian soy to the EU or China from 2011-2016 could have reduced net global deforestation by 2% and Brazilian deforestation by 9%. Thus, if major tropical commodity importers (e.g., the EU) require traders to eliminate deforestation from their supply chains, it could help bend the curve on global forest loss.