DEFORESTATION REGULATION
Restrictions on the consumption of products associated with deforestation have been implemented by private companies via zero deforestation commitments (ZDCs), and have been adopted by developing countries for the incentive of result-based financing through REDD+. As of December 2024, the European Union Deforestation Regulation (EUDR) in the European Green Deal (EGD) will prohibit certain raw materials and related products from being exported to the European Union if they involve the use of deforested land.
In an August 2024 working paper from the Center for Distributive, Labor, and Social Studies (CEDLAS), PABLO DE LA VEGA uses Comparable General Equilibrium modeling to examine the potential environmental and economic impacts of the EUDR in Argentina:
“The potential economic impacts of the EUDR in Argentina are considerable. Using Comtrade data and the list of products covered by the regulation, Calvo et al. (2024) estimate that the EUDR would reach approximately 40 percent of the value of Argentina’s exports of goods to the EU (about US$ 5 billion, 5 percent of total exports of goods), which is the second most important destination for Argentina’s exports of goods. The main production chains affected are soybean and livestock, which account for 80 percent and 15 percent of the value of exports to the EU reached by the EUDR, respectively. As a consequence of the EUDR, between 2025 and 2030, GDP would be reduced by an average of 0.46 percent with respect to the baseline scenario. However, of greater magnitude is the potential environmental impact. Deforested hectares would be reduced by 6.64 percent and emissions of polluting gases by 0.39 percent.”
+ “Implementation of commitments to reduce deforestation is hampered by different perceived financial risks, differences in the levels of influence and power held by different actors, and a perceived entitlement to deforest.” Angela M. Guerrero, Natalie A. Jones, Helen Ross, Malika Virah-Sawmy, and Duan Biggs explore multiple sustainability initiatives targeting deforestation in the soy supply chain, using a mental model perspective. Link. In PW, see Fernando Rujitsky on Brazilian agribusiness and the green transition. Link.
+ “It is the EGD that has fundamentally shaped the EU’s response to the major crises and challenges associated with the emerging geopolitical reality.” By Mathieu Blondeel. Link. And see a 2023 policy paper from the Real Instituto Elcano on the EGD as a driver of EU-Latin American cooperation. Link.
+ Charolette Streck argues that REDD+ programs can prevent deforestation leakage via national and jurisdictional programs that integrate local investments. Link. See Nicolas Kreibich and Lukas Hermwille on the post-2020 voluntary carbon market, and see Allegra Dawes on the current voluntary carbon market landscape. Link, Link.
NEW RESEARCHERS
Dutch Disease
SANTIAGO GRANA-COLELLA is a PhD candidate at the Universidad Nacional de San Martín. In a 2024 working paper, coauthored with Ignacio Silva Neira, he assesses the suitability of the Dutch Disease hypothesis as an explanation for the commodity boom and accompanying appreciation of the real exchange rate in Latin American countries between 2003–2019.
From the paper:
“The policy recommendations developed from heterodox currents, particularly from New Developmentalism (ND) and post-Keynesian criticism, are varied due to the diversity of approaches established and the assumptions considered. The ND approach advocates mainly for export taxes to mitigate the DD’s effects (Bresser-Pereira, 2008). In this regard, Dvoskin and Feldman (2018), while formalizing ND proposals in a model that endogenizes the productive structure of a small open economy, show that export duties might be a more feasible policy than export taxes since they will not raise costs for primary producers, thus avoiding repercussions on the prices of commodities derived from these products. However, as demonstrated by Dvoskin, Feldman, and Ianni (2020) through a Sraffian model, conflict inflation is a limit to export diversification through exchange rate policies. Another significant limitation of the ND approach is its foundation in addressing market failures, which consequently disregards the role of industrial policies as crucial elements for fostering new competitive advantages. Palley (2021) states that these policy recommendations do not substantially differ from neoliberal ones. The ND simplifies the development issue by not considering the global productive structure (i.e., not considering the long-term dynamics explained in the center-periphery theory) and thus avoiding discussions surrounding productive transformation. Furthermore, Palley (2021) asserts that the implementation of an export tax establishes a development strategy based on the inflow of foreign currencies that impacts financial vulnerability due to the dependence on external finances.”
+ + +
+ “Patronage systems helped to stabilize the initial path of neoliberal reform by undergirding the ANC’s legitimacy, but under Zuma they began to critically undermine conditions for corporate accumulation.” New on PW, Niall Reddy on the ANC, opposition parties, and circuits of the informal economy in South Africa. Link.
+ “The natural rate, says the ECB, ‘while unobservable … provides a useful guidepost for monetary policy.’ The idea of an unobservable guidepost perfectly distills the contradiction embodied in the idea of R*.” Also new on PW, JW Mason on orthodox assumptions of money neutrality in monetary policy. Link.
+ “Country platforms are now an increasingly hot topic, and are being advanced by the Brazilian hosts of this year’s G20, along with the IMF, multilateral banks, G7 governments, and the financial sector.” New on the Polycrisis, Kate Mackenzie and Tim Sahay on country platforms, a new concept for coordination between international finance institutions, private finance, and states. Link.
+ “The Employee Free Choice Act would allow unions to be certified if a majority of workers sign certification cards. This would assess workers’ support or opposition to unionization without requiring the government to run costly elections.” By Matt Bruenig. Link.
+ A Department of Commerce press release announces the preliminary memorandum of terms for providing $50 million in proposed direct funding to HP Inc., which specializes in microfluidics and microelectromechanical systems, under the CHIPS and Science Act. Link.
+ A new working paper by Melissa Arnold Lyon, Matthew A. Kraft, and Matthew P. Steinberg examines how teacher strikes affect compensation, working conditions, and productivity, using an original dataset of 772 teacher strikes between 2007–2023. Link.
+ “My finding that fines are associated with increased financial distress, declines in credit reputation, and reduced employment stability suggests that, on average, US households cannot easily absorb typical, but unplanned, expense shocks.” By Steven Mello. Link.
+ “The Gujarati merchants belonged to the Jain sect, similar to the Buddhists, who carried non-violent, pacific principles to extremes. In general, no merchant community in the Indian Ocean traded with sword in hand and most of the commercial emporia were neutral ports of trade without defensive walls, standing armies, and naval fleets. The main political principle which governed the policy of their rulers was to provide complete protection to an international community of merchants who were often granted extra-territorial juridical rights in exchange for not violating the port’s neutrality. Even when a great trading city such as Canton in China or Cambay in Gujarat was part of a strong empire or a military state, the rulers treated the port as if it lived from the profits of trade. The local governors were given a certain measure of independence in formulating the administrative and political structure of the towns. Underlying the entire system of trade and the balance of power was the assumption that the ocean was not an area of armed conflict in which warring states should exercise their sovereignty.” By Kirti N. Chaudhuri. Link.
Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org