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Impact.AssessmentandProjectAppraisal,volume24,number4,December2006,pages299-309,BeechTreePublishing,10WatfordClose,Guildford.SurreyGUI2EP.UK
Biodiversity
Assessing biodiversity impacts of trade:
a review of challenges in the agriculture sector
J R Treweek, Claire Brown and Philip Bubb
Agriculturalexpansion is a majordriverfor loss THISPAPERREVIEWStheneedforassessing
ofbiodiversity; changes in land use or intensity impactsoftradeonbiodiversity intheagricul-
associated with tradeliberalisation can therefore ture sector, taking into account the linkages
have major consequences. Assessments of the among biodiversity, farming and poverty alleviation
impacts ofagricultural trade have tended to ne- andthescaleofimpacts fromagricultureon 'import-
glectbiodiversity, despiteitscrucialroleinmain- ainntwbhioidcihvertsriatyd'e.-reIltatseudmmaporliisceiess,soamgereoefmetnhteswaaynsd
taining productive agro-ecosystems. Advice on measurescanactasdrivers forimpactsofagriculture
assessment ofbiodiversity impacts is required to onbiodiversity,andthensetsoutsomekeyconsidera-
support trade negotiations and reduce risks of tions forbiodiversity-inclusivetradepolicies.
unforeseen consequencesforimportantbiodiver- The first four sections of the paper identify the
sity and those who depend on itfor their liveli- main biodiversity issues in the agricultural trade
hoods. This paper explores linkages between policy context. The next section reviews the extent
biodiversity and trade and draws on examples to which these issues have been addressed in past
from the agriculturesector to reinforce the need impact assessments oftrade-related measures. Rec-
to build a biodiversity-inclusive processfor as- ommendations are then developed for fuller assess-
sessingimpactsoftradepoliciesandagreements. ment of biodiversity impacts in the trade impact
assessmentprocess.
Keywords: agro-biodiversity,conservation,global200,
hotspot,livelihood,millenniumdevelopment Biodiversityin the policy-making process
goals,poverty,protectedarea,sustainableuse,
tradepolicy,tradeimpactassessment
A special case can be made for assessing the impli-
DrJRTreweekisatChanceryCottage,Kentisbeare,Cullompton, cations ofagricultural trade policies and agreements
Devon, EX15 2DS, UK; Tel: +44 1884 266798; Email: jo@ for biodiversity, and for building safeguards into
treweek.fsnet.co.uk. Dr Claire Brown and Philip Bubb are at them to ensure conservation and sustainable use.
UNEPWorldConservationMonitoringCentre,219Huntingdon Someofthesereasonsaresetout inBox 1.
Road,Cambridge,CB30DL,UK;Tel:+441223277314;Email: Thegoalistodeveloppoliciesthatpromotedevel-
claire.brownf3lunep-wcmc.org;Email:philip.bubb(2>unep-wcmc.
opment and support livelihoods through sustainable
org.
The authors acknowledge ideas from aproject ledby UNEP use of ecosystems and biodiversity. This requires
EconomicsandTradeBranchfundedbytheEuropeanCommis- systematic assessment at a policy or strategic level,
siononbiodiversityinintegratedassessmentoftradepoliciesin preferablycarriedoutasanintegralpartofthepolicy-
the agriculture sector. Thanks are due to UNEP-ETB and makingprocess.Theresultsofsuchassessmentsneed
USiNmEmPo-nWso,rlFdulCaoinseSrhveantgionanMdoniDtaovriidngDCuetnhtiree.,paCrltiivceulaGrelyorBgeen. to be built into policy-development and trade-
Graham Tucker, Jeremy Barker, Kevin Lyonette andJan Joost negotiation processes to avoid risks of unforeseen
Kesslergavesignificantinput. consequences for both 'important' biodiversity and
ImpactAssessmentandProjectAppraisalDecember2006 1461-5517/06/040299-11 US$08.00©IAIA2006 299
Assessingbiodiversityimpactsoftrade
Box1.Reasonstoassessimpactsoftrade-relatedpolicyonbiodiversity
Thereisaparticularneedforguidanceonassessingtheimpactsoftrade-relatedpolicyonbiodiversitybecause:
theagriculturesectorisgrowing in somecountriesand isexpectedtocontinuetogrow inresponsetoincreasing humanpopulation
andfooddemand;
• agriculture is a majorfactorin biodiversitydecline, bothwithin and outside protected and othersensitiveareas (Mittermeierefa/,
1998;Myersefa/,2000;Scharlemannefa/,2005);
• sustainablefarmingreliesonhealthyecosystemsandtheserelyonbiodiversity(FAO,2004);
• thevaluesofecosystemservicesaregenerallyignoredorunder-estimated(Costanzaefa/, 1997);
• achieving the millennium developmentgoals (particularlygoal 1) depends on food securityand this depends on biodiversity(Mil-
lenniumEcosystemAssessment,2005);
• agriculturehasadirectinfluenceonnaturalresourceandlanduse:changesareoftenincrementalandappearindividuallyinsignifi-
cantbuthaveasignificantcumulativeimpactonbiodiversity;
• incrementalchangesinlandusetakeplaceoverlargeareasandarelargelyunregulated;
• manyareas ofglobal significance forbiodiversity are believed to be approaching critical thresholds in termsofspecies loss and
ecosystemfunction(MillenniumEcosystemAssessment,2005).
• Failuretoassessthesocial,economicandecologicalimpactsofproposedpoliciescanresultinpoliciesthatconcentrateeconomic
opportunityinthehandsofafew,reducelocalfoodsecurity,andpromotefarmingthatcausesenvironmentaldamageandexceeds
limitsofsustainableyield(WRI,2005)
those people depending on it for their livelihoods linkages between trade (policy) in the agriculture
and wellbeing. Advice is also required on the devel- sectoranddrivers ofchangeinfluencingoutcomes
opment ofpolicies that will build biodiversity in the forbiodiversity;
wider farmed environment as a basis for sustainable what opportunities or 'insertion points' exist for
farmingandfoodsecurity. biodiversity inthepolicy-makingprocess.
Thechallengeforpolicy-makersistodeveloppoli-
ciesandinstrumentsthatrecognisebiodiversityasthe
basis forsustainable developmentandto achievethe Scale ofthe problem
millenniumdevelopmentgoals.Althoughsustainable
agricultural practices, fairer markets and healthy, Biodiversity is declining globally andthere are clear
biodiverse ecosystemsare increasingly recognisedas links between agricultural change and declines in
prerequisitesforpovertyreduction, foodsecurity and biodiversity across a wide range ofagricultural sys-
equitable development, agricultural expansion (both tems (Donald and Evans, 2006). Growth in the
inareafarmedandintensityofmanagement)isoneof global human population is driving an unprece-
the majordrivers for loss ofbiodiversity worldwide, dented global expansion in the area ofland used for
even within recognised global biodiversity hotspots growing crops, forage for livestock and timber pro-
(Streets and Glantz, 2000; Glantz, 2003; Donald and duction, accompanied by escalating use of energy,
Evans,2006). water, fertiliserandotheragrochemicals.
Changes in land use, orthe intensity ofuse, asso- These trends in agricultural land use and inputs
ciated with agricultural trade policy have major are associated with increasing evidence ofenviron-
consequences, both for biodiversity itself and for mental damage and growing concern that the capa-
future provision ofthe biodiversity-based ecosystem cityofecosystemstosustainfoodproductionisbeing
services that are essential to support productive undermined. Globally, 40% of agricultural land is
farming in the future. Failure to consider the impli- seriously degraded, with crop productivity reduced
cations of trade policies and associated incentives to 13% ofits maximum potential. The most affected
and other activities on biodiversity and ecosystems are the poor of sub-Saharan Africa and Central
can disadvantage the environment and some sectors America. Around25% oftheworld's landis suitable
of society, particularly during transitions or adjust- for agriculture, but only 3.5% is problem-free (WRI,
ment periods, as markets and patterns ofproduction 2005).
shift. The state ofthe world's ecosystems has recently
Global rates of biodiversity loss are such that a been assessed in detail by an international team of
relatively low level of conservation effort confined experts under the Millennium Ecosystem Assess-
to protected areas is no longeradequateto safeguard ment(2005), whoconcludedthat:
theworld's ecosystemservices. It is therefore neces-
sary to ensure that all activities, including trade, are Human actions are fundamentally, andto a sig-
managedwithbiodiversityinmind. nificant extent irreversibly, changing the diver-
To build biodiversity considerations into the pol- sity oflife on earth, and most ofthese changes
icy-makingprocess itisnecessarytounderstand: represent a loss of biodiversity. Changes in
important components of biological diversity
• howagricultureandbiodiversity interact; weremorerapid inthepast 50 yearsthanatany
• theagriculturaltradepolicycontext; time in humanhistory.
300 ImpactAssessmentandProjectAppraisalDecember2006
Assessingbiodiversityimpactsoftrade
The risk ofagriculture-biodiversity conflicts is ex- increasing pressure on 'wild' biodiversity to sup-
pectedto rise: in the most important protected areas, plement food production. These hotspots are also
inthe 'wider' farmed landscape and in areas not ac- major commercial crop-growing regions, coffee and
tively farmed where induced changes may occur. cocoa being produced in nearly all those in the trop-
Thescaleofpotentialconflictisconsiderable: global ics. Production goals are likely to conflict with
food output has doubled since 1970 and demand for maintenance of biodiversity in these hotspots, for
food is predictedto grow by at least 50% inthe next example, cocoa in Ghana, palmoil in Indonesia, cof-
fewdecades. fee in Vietnam, and soybeans in Brazil (Conserva-
Biodiversityconservationefforthas focusedtradi- tion International, 2004).
tionallyondesignationofprotected areas,and listing Failure to test the compatibility oftrade policies
and protection of species. However, most of the with goals for protection of biodiversity and its
world's protected areas contain agricultural land or maintenance in hotspots and centres of endemism
are used in some way to produce food for people. (both for wild and agricultural biodiversity) could
Formal protection does not therefore guarantee result in exacerbation of risks to biodiversity of
protection of biodiversity from agricultural impact. global significance. In fact, recent studies have
Moreover, not all biodiversity-rich or sensitive areas shown that areas of high biodiversity importance
are under formal or legal protection, so avoiding ac- have been particularly affected by agricultural ex-
tivity in protected areas does not necessarily guaran- pansion. Analysis of the expansion of agricultural
teeavoidanceofimpactson importantbiodiversity. areas has shownthatendemic bird areas (EBAs), for
There have been a number of initiatives to iden- example, tend to be in areas with high human popu-
tify otherareas ofglobal biodiversity significance to lation densities, and consequently have been much
try to enhance their recognition and protection. more extensively transformed by agricultural ex-
These include Conservation International's Global pansion than the rest of the world. The proportion
Biodiversity Hotspots (Myers, 1990; Myers et al, of land in agricultural use in EBAs is currently
2000); Birdlife International's Important BirdAreas; 42% compared to 37% in the rest of the world
areas identified through the Worldwide Fund for (Scharlemannetal,2004).
Nature's Global 200 Ecoregions Programme and Biodiversityisnotjustatriskinandnearprotected
Centres of Plant Diversity (International Union for areas and recognised hotspots. One ofthe most sig-
theConservationofNature). nificant trends over the last 50 years has been the
There have also been recent attempts to identify loss of biodiversity in the wider environment as a
andsafeguard importantcentres ofendemism forag- result of both changing agricultural practice and
ricultural crops. These may or may not overlap with increasing population pressure. Agricultural impacts
areas under formal protection, but nevertheless rep- are characterised by their incremental nature. They
resent places where any loss of biodiversity driven often appearinsignificant when examined on acase-
by trade policy/agriculture would be of global sig- by-casebasis, butcan beseentohavemajorcumula-
nificance. The Global Biodiversity Hotspots, for tive effects when appraised collectively and at a
example, collectively house the majority of species landscapescale.
on the planet and threat was a key factor in their There are well-documented declines in biodiver-
selection (Myers, 1990). They therefore represent sity associated with agricultural intensification in
areas where there is very important biodiversity, Europe, for example, population declines of once
which is already highly threatened, and where scope common farmland birds. European countries with
to absorbadditional pressures from agriculture could the most intensive farming have suffered the most
belimited. rapidly declining bird populations. A report by
Malnutrition and hunger are pervasive among Birdlife International (2004) showed that intensive
people living in at least 16 of the world's global farming was causing serious population declines in
biodiversity hotspots, placing considerable and aboutathird ofEurope's 515 bird species, including
12 ofthe 16mostthreatenedspecies.
Agricultural biodiversity itself is also under
threat: the diversity ofanimal breeds, plant/crop va-
rieties and the genetic resources they contain is gen-
Malnutrition and hunger are erally declining. More than 90% of crop varieties
pervasive among people living in at have been lost in the past century and livestock
breeds are disappearing at the rate of5% per year.
least 16 ofthe world's global As a result, the Food and Agricultural Organisation
biodiversity hotspots, placing of the United Nations (FAO), the Convention on
considerable and increasing pressure Biological Diversity (CBD), and the Global Envi-
ronment Facility (GEF) are now placing greater pri-
on 'wild' biodiversity to supplement ority on conserving wild relatives of crops and
food production vegetables.
The former Soviet Union published the first
national list of wild relatives of crops in 1981.
ImpactAssessmentandProjectAppraisalDecember2006 301
.
Assessingbiodiversityimpactsoftrade
Turkey has protected 22 genetic management zones, (Costanza et al, 1997). Many ofthese services are
Mexico has a special biosphere reserveto protectthe fundamental toproductive farmingandtheirloss is a
wild relatives ofmaize and India has one for citrus particular risk to poor communities with direct de-
trees. The United States is trying to protect the wild pendency on local natural resources to meet their
relatives of grapes, onions and potatoes. Armenia needs. The rural poor often make use ofa variety of
has also carried out extensive work to map and lo- sources ofincome andsubsistence activitiesto make
cateimportantwildrelatives ofcrops. a living. These might include small-scale farming
The presence ofvaluable biodiversity on agricul- and food growing, also hunting, fishing and collect-
tural land suggests that efforts should be made to ing of firewood, herbs, medicinal plants and other
conserve these attributes by managing farmland in natural products from "thebush'
an environmentally friendly way (for example, as In other words, "environmental income" (WRJ,
currently promoted in Europe through agri- 2005) often complements income from other
environment support). However, it has been pointed sources, particularly during 'lean periods' or eco-
out that this may lead to greater overall biodiversity nomic decline, when people often rely more heavily
loss ifenvironmentally friendly management limits on the harvesting of wild food (for example Dei,
yields. This is because larger areas of remaining 1992). Ecosystem degradation (often characterised
natural or uncultivated land of high biodiversity by loss ofbiodiversity) represents a direct threat to
valuemay needto be convertedto agricultureto off- this nature-based income and can therefore exacer-
setthe reduced yields. Thus there may be atrade-off bate poverty. On the other hand, restoring the pro-
betweenthe benefits ofland sparing (by maximising ductivity (and diversity) of local forests, pastures
yields) and those ofenvironmentally friendly farm- and fisheries can have the opposite effect and in-
ing(ifthis limitsyields). crease local incomes(WRI, 2005).
Models ofthis trade-offsuggestthatthe best type More than 1.3 billion people depend on fisheries,
of farming for species persistence depends on the forests and agriculture for employment (FAO,
demand for agricultural products and on how the 2004). A great many more depend on some form of
population densities ofdifferent species on farmland farming for their livelihoods. Biodiversity therefore
change with agricultural yield. Green et al (2005), underpins a major source of income and employ-
note that empirical data on such density-yield func- mentinrural areas.
tions aresparse, butevidence fromarangeoftaxain Although ecosystems and biodiversity perform a
developing countries suggests that there are cases fundamentally important and well documented role
wherehigh-yieldfarming may allowmore speciesto in supporting livelihoods and represent crucial
persist, providedthat it is notalso associatedwithan assets, particularly for the rural poor, they are often
expansion in the area farmed. This is an issue that neglected in development planning. More import-
requires furthermonitoringandanalysis. antly, they are often omitted from commercial
This confirms thatthere are two risks to biodiver- evaluations ofnatural resources. Review of 15 pov-
sity fromagriculture,whichare: erty reduction strategy papers by Bindraban et al
(2004) found only one (for Zambia) that integrated
• lowinputbutextensive inareaoccupied; biodiversity conservation and poverty reduction;
• highinput(intensivecommercialproduction); only those for Ethiopia and Mozambique included
any provision for maintaining the diversity ofagri-
These risks may be experienced within protected cultural crop varieties (an important aspect ofagro-
areas and global biodiversity hotspots, in the wider biodiversity).
farmed environment or even in areas not directly Arangeofecosystemservices isneededtosustain
used or affected by farming. It is important to note viable agriculture. Essential functions such as nutri-
that farming activities are often relatively unregu- ent cycling, rehabilitation ofdegraded soils, regula-
lated and require no formal consent, meaning that tion ofpests and diseases, control of water quality
opportunities to assess and manage the environ- and pollination are maintained by a wide range of
mental impacts offarming can be limited. They rep- biologically diverse populations in both 'natural'
resent a case where decisions taken by individual and agricultural ecosystems. Maintaining important
landowners andmanagers atthe farm-scale can have ecosystem servicesandthebiodiversitythatprovides
major cumulative effects when considered in aggre- them reduces external input to agriculture require-
gate, but which may appear insignificant when ments by increasing nutrient availability, improving
considered in isolation. water use and soil structure, and providing natural
control ofpests.
As a general rule, more diverse ecosystems (in
Agriculture, biodiversity and poverty terms of structure and/or composition) tend to be
more stable. Diverse agro-ecosystems provide more
Biodiversity is an essential and integral part of niches for wild biodiversity to coexist with crops
healthy environments and, iftoo much biodiversity and livestock and more opportunities for people to
is lost, many essential environmental services, cur- narvest a variety of biodiversity-based products
rently seen as 'free goods', will be undermined alongside, or in conjunction with, their main crops.
302 ImpactAssessmentandProjectAppraisalDecember2006
Assessingbiodiversityimpactsoftrade
for example medicinal plants, or building materials.
Loss ofdiversityatany level reducesabilitytoadapt
and respond to environmental change (for instance, Biodiversity is the basis for evolution
climate change) and can therefore restrict the future and therefore essential for adaptation
supply ofecosystem services. This is why biodiver- to changing environments: in future,
sity is sometimes referred to as the 'life insurance
forlifeitself. Forexample: crops and livestockwill have to be
able to adapt to new environmental
• twainlcdegteonpeesptosolasndardeisoefatseens:alcorsistiocfalgesnoeutriccedoifverressiitsy- conditions, and it may be necessary to
in wild relatives of agricultural crops removes derive these from wild ancestors and
futureopportunitiestobreednewcropsto adaptto relatives ofmodern crops
changingenvironmental conditions;
• one pest or pathogen can wipe out crop monocul-
tures, whereas genetically diverse crops may have
someresistantindividuals.
Agriculture provides many crucial benefits, in-
However, agricultural ecosystems and biodiversity cluding food security, domestic employment and
have a complex and dynamic relationship. It is not export-related economic growth. The process of
invariably true that modern agricultural practices re- trade reform in the agriculture sector is based onthe
duce biodiversity orthat low-input, traditional farm- premise that reducing policy distortions and market
ing is compatible with high biodiversity. For failures will lead to more efficient allocation ofre-
example, tropical irrigated rice systems are planted sources and more sustainable patterns ofproduction.
as monocultures but are often constructed in such a The current global trend in the agriculture sector is
way that they are one ofthe most stable agricultural therefore towards trade liberalisation, as embodied
ecosystems on the planet. Key to this stability are in the Agreement on Agriculture, which forms part
diversity in landscape temporal planting patterns, ofthe Final Act ofthe 1986-1994 Uruguay Round
use ofsoil organic matterand low levels ofpesticide oftradenegotiations.
use. Dykes between paddies are also able to support This agreement provides a framework for long-
habitat for fish, insects, amphibians and water birds term reform ofagricultural trade and domestic poli-
suchaswaders. cies, with the general objective ofincreased market
Entirely artificial habitats, such as croplands can orientation. Italso includesprovisionsforadjustment
therefore support much biodiversity, forexample, in and specific measures to assist net food-importing
cases where they form a small part ofthe landscape countries and least-developed countries. Trade liber-
and are not managed intensively. In fact, various alisation is generally seen as an important tool for
semi-natural habitats that are now highly valued, sustainable agricultural development, improving
such as many open grasslands, are the result of equity and fairness in global trade of agricultural
human actions (such as the clearance of trees and commodities and ensuring that more people have
regular burning ofvegetation). It is therefore diffi- accesstomarketsandtoeconomicopportunity.
cult to categorise agricultural ecosystems according Rules and commitments made under the Agree-
to their biodiversity. Data on the biodiversity value mentonAgricultureapplyto:
ofcultivatedhabitats inthedevelopingworldarenot —
always readily available. However, there is evidence • market access various trade restrictions on
that abouthalf4CostaRica's native forest species of imports; —
birds, mammals, butterflies and moths also occur in • domestic support subsidies and other pro-
agricultural areas. grammes, including those that raise or guarantee
Biodiversityisthebasisforevolutionandtherefore farm-gatepricesandfarmers' incomes;
essentialforadaptationtochangingenvironments,for • export subsidies and other methods used to make
example, those resulting from climate change. Agri- exportsartificiallycompetitive.
culture in the future will rely on crops and livestock
that are able to adapt to new environmental condi- The agreement allows governments to support their
tions, and it may be necessary to derive these from rural economies, preferably through policies that
wildancestorsandrelativesofmoderncrops. cause least distortion to trade. It also allows some
flexibility inthewaycommitmentsare implemented.
Developing countries do not have to cut their subsi-
Agriculturaltrade policy context dies or lower their tariffs as much as developed
countries, and have extra time to complete their ob-
This section sets out the main trends in agricultural ligations, whereas least-developed countries do not
trade reform and explains how environmental (and havetodothis atall.
biodiversity) issues are currently addressed in key There are also special provisions to deal with the
agreements. interests of countries that rely on imports for their
ImpactAssessmentandProjectAppraisalDecember2006 303
Assessingbiodiversityimpactsoftrade
food supplies. Some importing countries depend on ricefieldsasameansofpreventingsoilerosion.Some
suppliesofcheap, subsidised food from majorindus- countries (Norway, for example) have also argued
trialised nations. They include some ofthe poorest thatmoreeffortshouldbemadeto ensurethatpolicy
countries and, although their farming sectors might reform under the WTO agreements is undertaken in
eventually benefit from the higher prices caused by ways consistent with other relevant multilateral
reducedexportsubsidies,they might needtemporary commitments, such as the Convention on Biological
assistanceto makethe necessary adjustments to deal Diversity (WTO, 2001). This is an aspect that has,
with higher-priced imports, andeventually to export. hitherto, receivedrelatively littleattention, butwhich
The agreement therefore includes certain measures is gaining momentum as critical dependencies ofag-
for the provision offood aid and aid for agricultural ricultural production and livelihoods on biodiversity
development, including the possibility ofassistance areincreasinglyrecognised.
fromthe International Monetary Fund andthe World
Bankto financecommercial food imports.
The Agreement on Agriculture is built on the Pastassessmentsoftrade-related measures
premise thatpolicies that supportdomestic prices, or
subsidise production, tend to encourage over- This section reviews some ofthe assessments ofthe
production, squeezing out imports or leading to impacts of trade policy and related measures that
export subsidies and low-priced dumping on world have been undertaken to date, to ascertain the extent
markets. It therefore distinguishes between support to which potential implications for biodiversity have
that stimulates production directly and that consid- been identified.
eredtohavenodirecteffect. Agricultural trade policy drives changes in agri-
World Trade Organisation (WTO) members have cultural production and distribution by altering mar-
to modify domestic policies that have a direct effect kets for products and levels of subsidy. Farmers
on production and trade, and to cut back associated make production decisions in the light of the
levels of support. WTO members calculated their changes in revenue and cost structures. These deci-
'total aggregate measurement of support' or total sions in turn change land use and ultimately affect
AMS for the base years of 1986-88. Developed the compatibility ofland and farming practices with
countriesagreedtoreducethese figuresby 20% over the conservation and sustainable use ofbiodiversity.
six years starting in 1995; developing countries Changes in agricultural production patterns as a re-
agreed to make 13% cuts over ten years and least- sultofchanges intradepolicy vary dependingonthe
developed countries do not need to make any cuts. initial conditions inacountry intermsofproduction,
This category ofdomestic support is referred to as trade and consumption ofagricultural commodities
'amber box', because the agreement requires a (for instance, whether there have been high or low
phasedslowingdown. levels ofprotective subsidy, or whether the country
Measures with minimal impact on trade can be isanetimporterorexporteroffood).
used freely and are referred to as 'green box' meas- To assess the impacts oftrade agreements on bio-
ures. They mightbe usedto address many non-trade diversity in the agriculture sector, it is necessary to
concerns, such as food security, the environment, recognise circumstances in which changes in mar-
structural adjustment, rural development or poverty kets or conditions of trade might either exacerbate
alleviation. Examples include certain forms ofdirect existing adverse trends in biodiversity status or gen-
income support and direct payments under environ- erate new risks. This might bethrough loss ofbiodi-
mental programmes. Direct environmental payments versity units (different genes, species), declines in
aretherefore, to some extent, de-coupled from trade, their abundance (for instance, population decline of
and governments have some leeway to use them a key pollinator resulting from pesticide use), or
withoutnegotiation. changes in their structural organisation (forinstance,
Article 20 ofthe Agreement on Agriculture says fragmentationofhabitatcontainingwildpredatorsof
the negotiations havetotake non-trade concerns into agricultural pests).
account. While it is generally accepted that agricul- Loss ofbiodiversity might cause deterioration or
WTO
ture has functions otherthan food production, collapseofecosystems,andtheservicestheyprovide,
members differ concerning whether 'trade- as the basis forsustained food production. However,
distorting' subsidies, or subsidies outside the green biodiversityconservationalsorequiresrecognitionof
box, are appropriate to help agriculture perform its situations in which changes in agricultural trade pol-
many roles, or whether environmental concerns are icy might represent risks to biodiversity outside the
best addressed through comprehensive liberalisation agro-ecosystem, causingirreversible losses.
and green box supports that are "targeted, transpar- Generally speaking,attheglobal level,tradeliber-
entandnon-orminimally-distorting". alisation leads to increasing agricultural activity and
Somearguethatitmaybenecessarytolinksupport increasing world market prices. However, in a
more directly to production in some cases, particu- country that has had relatively high protection ofits
larlywherepotentialforagriculturalproductionisac- domesticmarkets,liberalisationwouldtendtoleadto
tually limited, but there are strong environmental fallingproducerprices inrelationtoproduction input
reasons to sustain farming, for example, promoting pricesandareductioninproduction. Inthissituation,
304 ImpactAssessmentandProjectAppraisalDecember2006
Assessingbiodiversityimpactsoftrade
high-protectionproducerswouldsuffer,whereascon- assessments. Although some assessments refer to
sumerswouldbenefitbecauseoflowerprices. biodiversity as an issue, they do not include compre-
The opposite occurs in low protection countries, hensive analyses ofbiodiversity impacts or suggest
where production is likely to increase because ofthe development ofbiodiversity mitigation measures of
higher world market prices. Low protection country any kind.
producers would benefit, whereas consumers could A handbook on integrated assessment of trade-
sufferifworld market prices became higherthan the related measures(UNEP, 2005d)reinforcedthe need
previous domestic price. For an importing country, forintegrated approaches to policy developmentthat
decreasing prices that the domestic producers can identify both threats and opportunities and involve
charge would mean a loss to producers and de- relevant stakeholders (for example, see UNEP,
creased domestic production. For an exporting 2005a; 2005b; 2005c). For biodiversity, this is best
country, increasing the price the producers can achieved by taking an ecosystem approach, as advo-
charge would benefit producers and would probably cated by the Convention on Biological Diversity,
resultinhigherproduction. that considers the interaction among agricultural ac-
Experience gained from sustainability assess- tivity, development, livelihoods and ecosystems." It
ments of trade agreements (For example ODI and involves consideration ofthe demands made by ag-
IARC, 2005) reinforces the inherent difficulties of riculture on ecosystems and biodiversity, the ser-
tracing supply chains and quantifying changes in vices that ecosystems can provide to support
patterns oftrade directly attributable to trade agree- productive agriculture and the policies that need to
ments themselves, as opposed to those driven by be in placeto supporttypes and levels ofusethatare
market forces in general. It can be very difficult, if withinecosystemlimits.
not impossible, to draw clear-cut conclusions on a A country study on the export crop sector in
global level about the impact oftrade liberalisation Nigeria(UNEP,2002)identified"lossofbiodiversity
on biodiversity. Analysis frequently leads to the and degradation of soil through expansion of
identification ofboth beneficial and detrimental ef- hectaragecultivated"as one ofthemainimplications
fects, with an overall ambiguous outcome (Secre- of increased production ofexport crops in the post
tariatoftheCBD, 2005). Structural Adjustment Programme (SAP) period
Appraisals have tended to draw on case studies to (1986-1993) relativetothe pre-SAP period. A liber-
illustrate the kinds ofimpactthat mightoccurandto alised trade policy regime and the development ofa
identify possible trends, but have not had the re- workable rural (agricultural) infrastructure and
sources to evaluate actual outcomes for biodiversity. efficient markets were seen as keys tothe success of
One ofthe main challenges in these assessments is the SAP. The integrated assessment reviewed the
determining the extent to which biodiversity is al- implications ofthe National Policy on the Environ-
ready at risk and where even small incremental ment and noted that trade liberalisation could have
changes could result in critical thresholds being hadimplications for"landuseandsoil conservation"
reached. This kind ofanalysis has to be carried out andfor"forestry, wildlifeandprotectedareas".
atcountry-level. Impacts on protected areas were not assessed, al-
UNEP(2002)carriedoutanintegratedassessment though, in relation to "the depletion offorests", the
ofthe effects oftrade liberalisation on Nigeria's ex- assessment concluded that loss of vegetation as a
port crop sectorand this was followed by aseries of result ofclearing whole forests to establish new ex-
integratedassessmentsoftheeffectsoftrade liberali- port crop farms would be only temporary, as cocoa
sationindifferentcountrieswithintherice-sector(for seedlingswouldrapidlyestablish intotreesandafor-
example, UNEP, 2005a; 2005b; 2005c). The UNEP estecosystemwouldbe"moreorlessre-established".
assessmentsofimpactswithinthericesectorwereall While it is possible that cocoa plantations might
carried out expost, as exercises in following up on performasimilarroletonativeforestintermsofsoil
trendsandeffectsasabasisforfuturepredictions and stabilisationandprotection,itisunlikelythattheyare
aneffectivesubstituteinterms ofbiodiversity.
The environmental valuation did not address
the issue ofland conversion/loss ofbiodiversity and
the other services or values that this might provide,
One ofthe main challenges for even interms ofthe roleofsoilbiodiversity inmain-
appraisals is determining the extent to taining soil productivity. The policy recommenda-
tions made as a result ofthe study did not address
which biodiversity is already at risk biodiversity in any detail and it was not seen as a
and where even small incremental fundamentalconcern.
changes could result in critical
thresholds being reached: this has to Recommendations for fullerassessment
be done at country level.
To include biodiversity more effectively in trade im-
pact assessments, the causal relationships between
ImpactAssessmentandProjectAppraisalDecember2006 305
Assessingbiodiversityimpactsoftrade
trade and biodiversity need to be explicitly identi- relatively morecompatiblewith biodiversity;
fied. Someexamples ofhowtrade can drive changes emphasis on comparative advantages leading to
in agriculture with negative impacts on biodiversity more efficient production systems in locations
include: where biodiversity loss will beminimised.
• pressuretoproducemoreproducts forexportleads Effective assessment has been hampered in the past
tointensificationandincreasedareaofproduction; bythe inabilityto attributechanges inbiodiversity to
• pressure to produce more increases natural re- specific aspects oftrade policy or agreement and to
source-use, for instance, ofsurface water supplies quantifythesechanges. Itisalsodifficulttorecognise
forirrigation; critical 'tipping points' or early warning signs of
• price changes of agricultural inputs make it terminal biodiversity or ecosystem decline. How-
cheaper to use fertilisers, pesticides and other ever, it is possible to identify situations where biodi-
agro-chemicalsthatcandamagebiodiversity; versity (protected and otherwise) is already greatly
• pressure to grow crops for export reduces local affected by agriculture and, further, to identify when
food security and indirectly increases pressure on trade policy change might exacerbate existing ad-
local biodiversity (forinstance, harvesting ofwild verse trends. As a minimum, this should be done for
species forfood). globally important hotspots, but it is also necessary
to ensure that the needs ofthe rural poor for biodi-
Examples ofpositive impacts oftrade liberalisation versity aretaken intoconsideration.
onbiodiversity include: Table 1 presents some possible questions to dis-
cover the extent to which assessments of proposed
• policy reforms that remove impediments to inten- trade policies in the agriculture sectoraddress issues
sification, which can help increase agricultural ofbiodiversity conservation and its sustainable use.
production while easing pressure on biodiversity Table 2 suggests how similar assessment questions
in 'unconverted' land; might be developed to assess impacts on different
• new opportunities for trade in organic products, levelsofbiodiversity. This approach, andtheneedto
which can promote production methods that are build biodiversity values and ecosystem services
Table1.Biodiversity-relatedquestionstoassesssustainabilityissuesinassessmentofagriculturaltradepolicy
Question Rationale
Doesthepolicyrecognisethefundamentalroleofbiodiversityin Biodiversityprovidesarangeofservicestoagriculture.Lossof
supportingproductiveandsustainablefoodproduction? biodiversityunderminesthecapacityofecosystemstosupport
agricultureandasustainedstreamofincome.
Doesthepolicyrecognisetheimportanceofecosystems(and Manyoftheruralpoorrelyon'other1biodiversity(outsidetheagro-
biodiversity)asakeysourceofadditionalenvironmentalincome? ecosystem)forfood(especiallyinscarcetimes)andtomeetother
needs.
Doesthepolicyrecognisetheneedforbiodiversityandsustainable Foodsecurity(egasclimatechanges)needsgeneticdiversityasthe
ecosystemmanagementasthebasisforfoodsecurity? meansofadaptationtonewenvironments.Agro-biodiversityalso
buffersproduction(egagainstdrought)
Isthepolicycompatiblewithmillenniumdevelopmentgoalstargets? Egmaintainatleast60%ofthecountryunderforestcoverin
perpetuity(Bhutan);increaseareasprotectedforbiologicaldiversity
from8%in1990to12%in2015(Senegal)
Whataretheimpactsofeconomicgrowthonenvironmental Theimpactsofbiodiversitydeclineasaresultofincreasingly
sustainability.maintenanceofcriticalecosystemfunctions, intensiveagriculture,gearedprimarilytowardscommercialproduction
biodiversityresourcesneededbythepoorfortheirlivelihoods? arerarelyaddressed.
Doesthepolicyaddressissuesofnaturalresourceaccess, Expansionincommercialagriculturecanreducetheavailabilityof
allowingthepoortoincreasetheirincomesecurity? wildbiodiversityandreduceaccesstobiodiversityasasourceof
environmentalincome'.
Doesthepolicymakeprovisionforbuildingcapacityingood Necessarytoensurethatbiodiversityisprotectedanditsuse
governanceandenvironmentalregulation? regulated.
Doesthepolicysupportcommunity-basednaturalresource Thisisaneffectiveformoflocalempowermentandhashad
managementandcaterforitsrecognitioninlaw? demonstrableanddocumentedbenefitsinboostingtheincomesof
ruralpoorpeople.
Doesthepolicymakeprovisionformaintainingbiodiversity-based Peoplerelyingonbiodiversityasasourceofenvironmentalincome
'environmentalincome'andfoodsecurity? maynotbenefitfromnewopportunitiesassociatedwithcommercial
agriculture.
Doesthepolicyincludearrangementsforbiodiversitymonitoringto Tradepolicycanaffectthescale,locationandintensityoffarming
tracktheimpactsoftradeandassociatedeconomicchanges? activitywithsignificantconsequencesforbiodiversity.
Isthepolicybasedonquantifiabletargetsforimprovingoutcomes Biodiversityiscriticalforsustainableagriculture,andforpoverty
withrespecttobiodiversity-basedincome?Doesitinclude alleviation.
indicatorsforbothbiodiversityandpoverty?
306 ImpactAssessmentandProjectAppraisalDecember2006
Assessingbiodiversityimpactsoftrade
Table2.Impactsondifferentlevelsofagro-biodiversityand'other' biodiversity
Levelofbiodiversity Agrobiodiversity Otherbiodiversity
Geneticdiversity Doestheintendedactivitycausealocallossof Doesthepolicy/agreementaccelerateextinctionrates
vaneties/cultivars/breedsofcultivatedplantsand/or forgenomesthatarealreadythreatened?
domesticatedanimalsandtheirrelatives,genesor
genomesofsocial,scientificandeconomic
importance?
Speciesdiversity Wouldthepolicy/agreementaffectthediversityof Wouldthepolicy/agreementreduceoverallspecies
naturalpredatorsofagriculturalpestsorthevariety diversity,egthroughexpansionintheareafarmedand
ofspeciesfarmed,egbypromotingcommercial areductioninareaavailableforotherbiodiversity?
agriculturebasedonalimitedrangeofspeciesand
onuseofchemicalsthatreducepopulationsofnatural
predators?
Ecosystemdiversity Wouldthepolicy/agreementencourage(directlyor Wouldthepolicy/agreementexacerbatenegative
indirectly)destructiveornon-sustainableuseof trendsinbiodiversityinthewiderlandscape,eg
ecosystems(iecausethelossofecosystemservices throughlandconversion,fragmentationofremaining
essentialtosupportproductiveagricultureinfuture? wildlifehabitat,increaseduseofagro-chemicals?
Source:AfterSecretariatoftheCBD(2006)
firmlyintotheimpactassessmentprocess,arefurther largely unregulated nature, it is essential that the
articulated in recent guidance on biodiversity- monitoring base be improved as abasis for identify-
inclusive impact assessment issued by the CBD ingandmanagingrisks.
(SecretariatoftheCBD, 2006). A number of initiatives are underway through
One of the implications of the CBD's guidance UNEP, FAO andothers to developguidance on suit-
is that those undertaking any impact assessment able biodiversity indicators. This needs to be sup-
(including those of trade policies or agreements) plemented by increased investment in capacity for
should endeavourto identify situations in which the biodiversity monitoring, planning and regulation, to
followingareasmightbeadversely affected: ensurethatbiodiversity ismaintainedasthebasis for
sustained food production and other crucial services
a. Areas playing an important part in maintaining intothe future.
biodiversity, including: In addition to recognising when significant im-
i) protectedareas; pacts on biodiversity might occur, it is important to
ii) areas containing threatened ecosystems out- developmechanisms to quantify impacts andthento
sideformallyprotectedareas; encourage landusecompatiblewiththeconservation
iii) areas identified as being important for the andsustainableuseofbiodiversity,whethertheseare
maintenance of key ecological or evolution- treated as green box measures or are incorporated
aryprocesses; more directly into trade policies and agreements as
iv) areaswithhabitatforthreatenedspecies. mitigation. Biodiversity-friendly agricultural prac-
b. Areas with important regulating services for tices are notnecessarily the most profitable from the
maintaining natural processes with regard to soil, perspective of individual land users (Pagiola et al,
water, or air (for instance, wetlands, forests pro- 2004), making it necessary to enhance their relative
viding watershedprotection, vegetationprotecting attractiveness.
highlyerodableormobilesoils). In some cases, the profitability of biodiversity-
c. Areas with important provisioning services, for friendly practices can be boosted by inducing con-
instance, extractive reserves, landand watertradi- sumers to pay a premium fortheir outputs, as in the
tionally occupied or used by indigenous and local caseofshade-growncoffee(PagiolaandRuthenberg,
communities, fishbreedinggrounds. 2002). However, this approach requires complex
d. Areas with important cultural services, scenic certification schemes and is not always feasible
landscapes,heritagesites, sacredsitesandsoon. (Pagiola et al, 2004). There have therefore been ef-
e. Areas with other relevant ecosystem services forts to develop systems by which land users are
(such as flood storage areas, groundwater re- paid directly for the environmental services they
charge areas, catchment areas, areas with valued generate, thus aligningtheir incentives with those of
landscapequality). society as a whole (Ferraro, 2001; Ferraro and Kiss,
2003; Pagiolaetal 2004). Costa Rica, for example,
The presence of such areas would be expected to has developed a nationwide programme under its
flag the need for a more comprehensive assessment 1997 Forestry Law, through which land users can
of impacts on biodiversity, using methods such as receive payments for specified land uses, including
those currently being developed by UNEP (in press conservationofnatural forests. There are also exam-
a; in press b). However, effective assessment re- ples where proceeds ofwatertariffs have been used
quires information. Given the global magnitude of to pay landholders to maintain and reforest water-
agricultural impacts on biodiversity, and their shedareas(Castro, 2001).
ImpactAssessmentandProjectAppraisalDecember2006 307
.
Assessingbiodiversityimpactsoftrade
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