PNNL

Abstract

Import restrictions on deforestation-linked commodities are being considered strategies to reduce global deforestation and emissions. However, limited market share of importers imposing such restrictions and the potential for emissions leakage could reduce their effectiveness. Moreover, they could result in negative economic implications for producers and consumers. We quantify future emissions and economic implications of oil palm and soybean import restrictions. Current EU restrictions will likely have minimal impact due to the EU’s otherwise small and diminishing share of global palm and soy demand. If extended beyond the EU, such import restrictions could drive reductions in cumulative LUC emissions by 2050 in key oil crop exporting regions— up to 0.9% in Indonesia, 1.5% in the rest of Southeast Asia, 3.8% in Argentina and 6.7% in Brazil, relative to a scenario with no import restrictions. However, these key exporters could also face losses ranging $4.1-$61 billion in cumulative agricultural production revenue by 2050.