How could sustainable trade contribute to the conservation of natural capital? The effects of certifying tropical resource production on ecosystem services

07-06-2016 | Publication

PBL has conducted a study into the possibilities of improving the management of natural capital through sustainable trade chains, in the regions that produce soya, palm oil, cacao and wood. Certified tropical resource production takes natural capital into account to a larger degree. Scaling up sustainable production is hampered by the fact that the financial benefits to producers are often only limited.

Costs and benefits of sustainable production often unequally divided  

For this study, we analysed the financial and societal costs and benefits of certified production compared to those of conventional production methods. This showed that certified production systems can be financially beneficial for producers, but not in all cases. For example, soya producers invest in improving the management of their production systems, thus ensuring less environmental and health damage in the surrounding areas. However, the costs they incurred in order to achieve these benefits for the local population cannot be recovered through, for example, higher resource prices.

Halting deforestation is an important criterion in nearly all sustainability standards. It produces various societal benefits. For the global population this mainly relates to retaining the carbon stored in preserved forest ecosystems. Such preserved forests are also a source of food, fuel and other resources for the local, self-sufficient population. The monetary value of these ecosystems, however, is low, which is partly due to the low level of welfare among these groups.

New pathways towards sustainable production and trade

The study makes several recommendations for taking ecosystem services more into account in natural resource production systems. These include, for example, addressing ecosystem services more explicitly in market standards, pursuing spatial policy against deforestation in the production regions, and governments implementing more stringent emission ceilings for carbon in order to increase the price of internationally traded carbon.  For resource producers, this would make sustainable production methods and carbon storage more attractive.