In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, Patrícia Vasconcellos from the US Association of Foreign Press Correspondents interviews Hinrich Foundation Research Grant recipient Rodrigo Fagundes Cezar about the impact of unilateral green rules and voluntary standards on Brazil’s green transition.

Amid efforts to promote sustainability through trade, import policies have taken centerstage. The European Union (EU), for example, has unilaterally launched the Renewable Energy Directive (RED) and the EU Deforestation Regulation (EUDR) to help the single market achieve its ambitious climate goals by 2030. As a result, several countries have established or plan to adopt private standards and certifications, such as Brazil's sugar agency Bonsucro, to ensure compliance with these new regulations.

In Brazil, however, the results of adopting these voluntary standards have been mixed. While the country’s exports of sugar and ethanol to Europe have generally increased, these gains are often limited to municipalities with established trade ties with the EU. On the other hand, areas with fewer prior trade ties have seen declining exports. Furthermore, compliance with these standards may inadvertently lead to land concentration, favoring larger agricultural units and potentially exacerbating land inequality within Brazil.

This special episode delves into the findings of a report titled ‘Unilateral green rules and voluntary standards: A balancing act for Brazil’, commissioned under the Hinrich Foundation Research Grant, which supports up-and-coming academics. Rodrigo Cezar and his team analyze the impact of these voluntary standards on Brazil’s sugar and ethanol exports and land concentration. They also discuss the heterogeneous effect and history of trade across Brazilian municipalities. The research highlights the role of policymakers in developed nations can mitigate adverse spillover effects to achieve their sustainability goals.

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