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Sustainable trade

Unilateral green rules and voluntary standards: A balancing act for Brazil


Published 14 May 2024

Trade policies and voluntary sustainability standards (VSS) are playing increasingly vital roles in the green transition. But in the case of Brazil, Europe’s extraterritorial regulations aimed at making the bloc’s biofuel imports more sustainable may inadvertently favor larger agricultural units and exacerbate land inequality in Brazil.

Amid the multiple pathways to promote sustainability through trade, import policies have taken the center stage. The European Union (EU), for instance, unilaterally launched the Renewable Energy Directive (RED) and the EU Deforestation Regulation (EUDR) in the hopes that these measures would help the single market reach its ambitious climate goals by 2030. As a result, several countries have established or plan to use private standards and certifications, such as Bonsucro, to assure compliance with these new regulations.

In this study, commissioned under the Hinrich Foundation Research Grant that funds up-and-coming academics, Rodrigo Cezar of Fundação Getulio Vargas School of International Relations and his team found that the adoption of VSS in Brazil has produced mixed results. While the country’s exports of sugar and ethanol to Europe have increased overall, such gains are often confined to municipalities with established trade ties with the EU. Areas with limited prior trade ties, on the other hand, witnessed declining exports.

In light of these findings, the research suggests that policymakers in the Global North should address the negative spillover effect of unilateral green rules to ensure that sustainable trade policies reach their intended goals. As the authors conclude with a list of recommendations for mitigating the externalities of climate governance, they highlight the need to enhance community empowerment efforts in order to achieve the co-benefits of socioeconomic development and environmental protection.

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Rodrigo Fagundes Cezar is a professor at Fundação Getulio Vargas (FGV) School of International Relations in São Paulo, Brazil.

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Author

Yixian Sun

Yixian Sun is a professor at the University of Bath and an Adjunct Senior Research Fellow at the Institute for Environment and Sustainability, Lee Kuan Yew School of Public Policy, National University of Singapore.

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Guilherme De Franco holds a summa cum laude bachelor’s degree in International Relations from Fundação Getulio Vargas (FGV) School of International Relations, in São Paulo, Brazil.

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