• Clearance of forests for agriculture is a major cause of deforestation worldwide; the three most significant commodities in this regard are palm oil, soy and beef, which between them accounted for an estimated 76 per cent of the deforestation associated with agriculture in 1990–2008. International markets are an important driver of demand, particularly for palm oil and soy.
• Global production of palm oil has grown strongly for several decades, more than doubling over the period 2000–13. Indonesia and Malaysia between them account for more than 80 per cent of palm oil production, and are likely to continue to dominate world exports. The European Union (EU), India and China are the main consumers, importing almost 60 per cent of the market; EU demand is driven significantly by biofuel policy, while India and China use palm oil mainly as a cooking oil and in processed foods.
• Global production of soybeans has roughly doubled since 2000, and the expansion of output has been particularly rapid in South America; Brazil and Argentina accounted for almost 50 per cent of global production in 2013. Overwhelmingly the main importer is China (which took 43 per cent of all soy imports in 2014), mainly for animal feed for its growing meat industry. The EU is the second largest importer, using soy for animal feed and biofuel.
• In contrast, consumption and production of beef has grown only slowly. Major producers are the US, Brazil, the EU and China; principal exporters are Brazil, India, Australia and the US. The US and the EU are still major consumers, although – as in most developed countries – consumption is falling slightly; other significant consumers include Brazil, India, Pakistan and China. Russia and Japan are also significant importers.
• Three main factors underlie the growth in both consumption and production of palm oil and soy: population growth; changing dietary preferences; and policy support for biofuels. The first two are just as relevant to beef. Continued growth in world population and the expansion of the global middle class, with accompanying higher consumption levels of processed food and meat, will continue to drive demand upwards – strongly for palm oil and soy, more weakly for beef. Given the difficulty of increasing yields, particularly in developing countries, the further expansion of agricultural land into forest areas is inevitable. None the less, three other factors may restrict this growth: the private-sector commitments and government policies that are being developed with the aim of decoupling agricultural production from deforestation; a loss of support for biofuels, most notably in the EU; and health concerns, particularly over the consumption of palm oil and beef.

 

This event is part of a series of illegal logging update meetings that will bring together more than 250 participants from civil society, industry and governments from around the world. 

Download the presentations from the event on the Illegal Logging Portal.

Recommendations

• Integrate chokepoint analysis into mainstream risk management and security planning - for example, government agencies should assess exposure and vulnerability to chokepoint risk at the national and subnational levels.
• Invest in infrastructure to ensure future food security – for example by agreeing on guidelines for climate-compatible infrastructure through an international taskforce established under the G20.
• Enhance confidence and predictability in global trade - for example, through a process under the World Trade Organization (WTO) to continually reduce the scope for export restrictions
• Develop emergency supply-sharing arrangements and smarter strategic storage, e.g. an emerging response mechanism among major players in the global food trade, modelled in part on that of the International Energy Agency in oil markets and led by the UN Food and Agriculture Organization (FAO), the UN World Food Programme (WFP) or the Agricultural Market Information System (AMIS).
• Build the evidence base around chokepoint risk - including through the collection of data on real-time food trade and infrastructural capacity to aid in assessing risks to food supply chains.

Further Reading

• Read more about chokepoints in global food trade at resourcetrade.earth
• Take a closer look at chokepoints and food security threats in an interview with a report author and experts in related fields
• Discover the 5 things you need to know about chokepoints
• Explore what the Qatar crisis tells us about food supply risk (in The New Arab)

Summary

• There is growing optimism about the potential of the ‘circular economy’ (CE) as a new model for sustainable growth in developing countries. A CE is one in which products are recycled, repaired or reused rather than thrown away, and in which waste from one process becomes an input into other processes. In recent months there has been CE-related activity in countries as diverse as Laos, Rwanda and Colombia.
• A CE strategy could help lower-income countries ‘leapfrog’ to a more sustainable development pathway that avoids locking in resource-intensive practices and infrastructure. But a stronger evidence base is needed to show how the agenda can deliver opportunities for industrialization, as well as addressing environmental insecurity.
• Lower-income countries are in many ways more ‘circular’ than their developed-economy counterparts – the question is how to turn this into a development opportunity. Much economic activity in lower-income countries revolves around sorting and reusing waste. However, higher-value, employment-generating opportunities for reuse and remanufacturing are yet to be captured.
• The existence of circular activities in developing countries provides excellent political ‘entry points’, which could enable governments, the private sector, civil society and other actors to promote innovative economic models. The CE could provide a powerful narrative, helping to build momentum around a set of ideas that can be applied in and tailored to multiple sectors or cities.
• There is a window of opportunity in which to align the efforts of development organizations and partner countries. Donors are exploring how the agenda should be aligned with the Sustainable Development Goals (SDGs) and the Paris Climate Agreement. Wider international cooperation on the CE could involve trade partnerships, regional hubs or pilot zones.

Helen Thompson reflects on the changing nature of the EU as a federation and will seek to map post-Brexit options for the UK within this history. 

Since its beginning in the 1950s, the evolution of European integration has created a series of predicaments for the UK which has been forced again and again to redefine its relationship with the European entity. As Britain seeks to leaves the European Union, it will again need to find a new relationship with it at a time when the future of the US commitment to Europe is also uncertain.
 
Assuming Brexit takes place, to what extent could the federalization of the EU pose issues for the UK? What does a move towards federalization mean for security globally? And how would Britain and Northern Ireland navigate a relationship with a customs union federation?
 
The Schapiro Lecture is published in Government and Opposition: An International Journal of Comparative Politics.


 

There are two well-established ideas in trade. Individually, they are correct. Combined, they can lead to a conclusion that is unfortunately wrong.

The first idea is that, across a range of economic sectors, the EU and the US have been engaged in a battle to have their model of regulation accepted as the global one, and that the EU is generally winning.

The second is that governments can use their regulatory power to extend strategic and foreign policy influence.

The conclusion would seem to be that the EU, which has for decades tried to develop a foreign policy, should be able to use its superpower status in regulation and trade to project its interests and its values abroad.

That’s the theory. It’s a proposition much welcomed by EU policymakers, who know they are highly unlikely any time soon to acquire any of the tools usually required to run an effective foreign policy.

The EU doesn’t have an army it can send into a shooting war, enough military or political aid to prop up or dispense of governments abroad, or a centralized intelligence service. Commission President Ursula von der Leyen has declared her outfit to be a ‘geopolitical commission’, and is casting about for any means of making that real.

Through the ‘Brussels effect’ whereby European rules and standards are exported via both companies and governments, the EU has indeed won many regulatory battles with the US.

Its cars, chemicals and product safety regulations are more widely adopted round the world than their American counterparts. In the absence of any coherent US offering, bar some varied state-level systems, the General Data Protection Regulation (GDPR) is the closest thing the world has to a single model for data privacy, and variants of it are being adopted by dozens of countries.

The problem is this. Those parts of global economic governance where the US is dominant – particularly the dollar payments system – are highly conducive to projecting US power abroad. The extraterritorial reach of secondary sanctions, plus the widespread reliance of banks and companies worldwide on dollar funding – and hence the American financial system – means that the US can precisely target its influence.

The EU can enforce trade sanctions, but not in such a powerful and discriminatory way, and it will always be outgunned by the US. Donald Trump could in effect force European companies to join in his sanctions on Iran when he pulled out of the nuclear deal, despite EU legislation designed to prevent their businesses being bullied. He can go after the chief financial officer of Huawei for allegedly breaching those sanctions.

By contrast, the widespread adoption of GDPR or data protection regimes inspired by it may give the EU a warm glow of satisfaction, but it cannot be turned into a geopolitical tool in the same way.

Nor, necessarily, does it particularly benefit the EU economy. Europe’s undersized tech sector seems unlikely to unduly benefit from the fact that data protection rules were written in the EU. Indeed, one common criticism of the regulations is that they entrench the power of incumbent tech giants like Google.

There is a similar pattern at work in the adoption of new technologies such as artificial intelligence and the Internet of Things. In that field, the EU and its member states are also facing determined competition from China, which has been pushing its technologies and standards through forums such as the International Telecommunication Union.

The EU has been attempting to write international rules for the use of AI which it hopes to be widely adopted. But again, these are a constraint on the use of new technologies largely developed by others, not the control of innovation.

By contrast, China has created a vast domestic market in technologies like facial recognition and unleashed its own companies on it. The resulting surveillance kit can then be marketed to emerging market governments as part of China’s enduring foreign policy campaign to build up supporters in the developing world.

If it genuinely wants to turn its economic power into geopolitical influence – and it’s not entirely clear what it would do with it if it did – the EU needs to recognize that not all forms of regulatory and trading dominance are the same.

Providing public goods to the world economy is all very well. But unless they are so particular in nature that they project uniquely European values and interests, that makes the EU a supplier of useful plumbing but not a global architect of power.

On the other hand, it could content itself with its position for the moment. It could recognize that not until enough hard power – guns, intelligence, money – is transferred from the member states to the centre, or until the member states start acting collectively, will the EU genuinely become a geopolitical force. Speaking loudly and carrying a stick of foam rubber is rarely a way to gain credibility in international relations.

This article is part of a series of publications and roundtable discussions in the Chatham House Global Trade Policy Forum.

This article uses the 2019 Eurovision Song Contest (ESC) that took place in Tel Aviv to explore how cultural mega-events serve both as political arenas and as tools for identity construction, negotiation and contestation. These processes of identity politics are all conducted across national–subnational–international–transnational levels. The hosting of mega-events fleshes out these multiple processes in a very strong manner. We first discuss the politics of hosting mega-events in general. We then examine the identity politics associated more specifically with the Eurovision Song Contest, before examining in depth the complex forms of identity politics emerging around the competition following the 2018 Israeli victory. We suggest that it is important to study together the multiple processes—domestic, international and transnational—of identity politics that take place around the competition, as they interact with each other. Consequently, we follow the various stakeholders involved at these different levels and their interactions. We examine the internal identity negotiation process in Israel surrounding the event, the critical actors debating how to use the stage to challenge the liberal, western, ‘normal’ identity Israel hoped to project in the contest and how other stakeholders (participating states, national broadcasting agencies, participating artists) reacted to them, and finally we examine the behaviour of the institution in charge, the European Broadcasting Union, and national governments. We contribute to the study of mega-events as fields of contestation, to the understanding of the complex, multilevel nature of national identity construction, negotiation and contestation in the current era, and more broadly to the role that popular culture plays in this context.

To identify and promote collaborative opportunities for an inclusive and sustainable circular economy transition at the international level, a clearer understanding and discussions of the potential winners and losers of such a transition is needed. In short, a ‘win-win-win’ vision for the environment, people and the economy, needs to be built and credible pathways to achieving this vision.

This research workshop, organized by Chatham House and UNIDO, will build on previous and ongoing research by Chatham House, and others, to drive forward an inclusive circular economy agenda and promote a just transition from linear to circular economic models. Chatham House, in collaboration with partners, aims to provide a strong evidence base of the opportunities and trade-offs in this transition from linear to circular models by robustly analysing the political economies in key regions in the developing world and engaging with leading stakeholders from governments, international organizations, civil society and the business community.

Latin America is an important geographical region for the circular economy especially in view of the circular bioeconomy and the agenda around inclusiveness. Several countries are beginning to embrace the circular economy concept and related policies. This workshop will bring together circular economy leaders from policy, business and civil society across Latin American countries to identify and discuss challenges, large-scale positive sum opportunities, investment needs, existing alliances and the potential to scale up circular economy practices. The second day of the workshop includes site visits to various circular economy projects in Uruguay.

Attendance at this event is by invitation only. 

The circular economy, that minimizes waste and keeps materials and products in circulation for as long as possible, is increasingly regarded as a promising model for driving sustainable and resilient economic growth in both developed and emerging economies. To successfully scale circular practices and ensure the transition from a linear to a circular model leaves no one behind, an inclusive and collaborative approach is required.

• Inclusive policy approaches for solving the global waste crisis.
• Financing the circular economy and closing the investment gap.

• Trade in the circular economy: closed local economies or global collaborating systems?

During the second day of the conference, more specific circular economy themes are discussed in virtual panels including the following topics:

• Beyond plastic recycling: innovations for sustainable packaging.
• Advancing multilateral action on marine plastic pollution.
• Industry 4.0 and circular economy: identifying opportunities for developing countries.

The Chatham House Circular Economy conference forms part of the programme of events to celebrate the Chatham House Centenary highlighting the main goals for the institute’s second century.

The circular economy minimises waste and keeps materials and products in circulation for as long as possible. It is increasingly regarded as a promising model for achieving the Sustainable Development Goals (SDGs) and the global climate goals of the Paris Agreement, as well as driving sustainable and resilient economic growth in both developed and emerging economies.

The financial industry has a key role to play in scaling up circular practices and ensure the transition from a linear to a circular model. Interest and action from policymakers, the financial industry, and other stakeholders towards financing the circular economy is already emerging in the form of thematic circular economy funds and innovative financial vehicles, as well as new investment criteria, guidance and standards.

However, as more activities around circular economy financing are emerging, questions that arise concern issues of common definitions and standards, consistency with green climate finance and development finance as well as distributive justice and good governance.

Specific questions to be discussed during this event include:

• What is the current circular economy finance landscape in terms of initiatives, definitions, criteria and guidance?
• What are the roles of public and private funding and blended finance in financing the circular economy?
• What lessons can be learned from green climate finance initiatives and ESG related factors and risks?  What types of financial products for small and medium sized enterprises (SMEs) in developing countries are required?
• How can the finance industry support inclusive and just transitions to the circular economy?

This roundtable will bring together experts representing public and private finance and investment to discuss these questions and share best practise to forge pathways for joined up approach on circular economy finance.

The roundtable will build on previous and ongoing research by Chatham House and others, to drive forward a global and inclusive circular economy agenda.  

Attendance at this event is by invitation only.

The International Forum on Illegal, Unreported and Unregulated (IUU) Fishing brings together over 100 leading policymakers, researchers, industry representatives and civil society groups from across the world to discuss the latest initiatives, regulations and research in the areas of fisheries governance and trade in illegal fish products.

Summary

• Many social and political issues have so far been neglected in planning for the circular economy transition. This paper aims to redress this by considering how ‘just transition’ and social equity may be achieved through policy and practice.
• The prevailing economic model is linear, in that resources are extracted, transformed into products, used, and finally discarded. In contrast, the circular economy recognizes that natural resources are finite, and aims to keep the materials in products in circulation for as long as possible: reusing, repairing, remanufacturing, sharing and recycling. While the concept of the circular economy is largely focused on developing new technologies and businesses to enable keeping materials in circulation, it also includes the notions of ‘designing out’ waste, substituting renewable materials for non-renewable ones, and restoring natural systems.
• The UN 2030 Agenda demonstrates that environmental, social and economic sustainability objectives cannot be separated. As the links between the environmental issues of climate change, overconsumption of resources and waste generation, and social issues of inequality and the future of work become increasingly obvious, the urgency to connect environmental with social justice is gaining in significance. The language of ‘just transition’ – a transition that ensures environmental sustainability, decent work, social inclusion and poverty eradication – has started to penetrate debates and research on sustainability policy, particularly in the contexts of climate change and low-carbon energy transition.
• A just transition framework for the circular economy can identify opportunities that reduce waste and stimulate product innovation, while at the same time contributing positively to sustainable human development. And a just transition is needed to reduce inequalities within and between countries, and to ensure that the commitment of the UN Sustainable Development Goals to leave no one behind is fulfilled.
• It is important to identify the likely impacts on employment as a result of digitalization and industrial restructuring. Combining circular economy policies with social protection measures will be important in order to ensure that the burden of efforts to promote circularity will not fall on the poor through worsening working conditions and health impacts, reduced livelihoods, or job losses. Identifying potential winners and losers through participatory ‘roadmapping’ can help shape effective cooperation mechanisms and partnerships nationally and internationally.
• Many low- and middle-income countries that rely heavily on ‘linear’ sectors such as mining, manufacturing of non-repairable fast-moving consumer goods, textiles and agriculture, and the export of these commodities to higher-income countries, are likely to be negatively affected by the shift to circularity. These countries will need support from the international community through targeted assistance programmes if international trade in established commodities and manufactures declines in the medium to long term. 
• International cooperation to create effective and fair governance mechanisms, and policy coordination at regional, national and local levels will play an important role in shaping a just transition. Multilateral technical assistance programmes will need to be designed and implemented, in particular to support low- and middle-income countries.
• Governments, international development finance institutions and banks are among the bodies beginning to establish circular economy investment funds and programmes. Just transition principles are yet to be applied to many of these new finance mechanisms, and will need to be integrated into development finance to support the circular economy transition.
• New international cooperation programmes, and a global mechanism to mobilize dedicated support funds for countries in need, will be critical to successful implementation across global value chains. Transparent and accountable institutions will also be important in ensuring that just transition funds reach those affected as intended.

The world is currently witnessing how vulnerable existing production and consumption systems are, with the current global health crisis harshly exposing the magnitude of the risks associated with the global economy in its current form, grounded, as it is, in a linear system that uses a ‘take–make–throw away’ approach.

These ‘linear risks’ associated with the existing global supply chain system are extremely high for national economies overly dependent on natural resource extraction and exports of commodities like minerals and metals. Equally vulnerable are countries with large manufacturing sectors of ready-made garments and non-repairable consumer goods for western markets. Furthermore, workers and communities working in these sectors are vulnerable to these changes as a result of disruptive technologies and reduced demand.

In a recently published Chatham House research paper, ‘Promoting a Just Transition to an Inclusive Circular Economy’, we highlight why a circular economy approach presents the world with a solution to old and new global risks – from marine plastic pollution to climate change and resource scarcity.

Taking the long view

So far, action to transition to a circular economy has been slow compared to the current crisis which has mobilized rapid global action. For proponents of transitioning to a circular economy, this requires taking the long view. The pandemic has shown us that global emergencies can fast-forward processes that otherwise might take years, even decades, to play out or reverse achievements which have taken years to accomplish.

In this vein, there are three striking points of convergence between the COVID-19 pandemic and the need to transition to an inclusive circular economy.

Firstly, the current crisis is a stark reminder that the circular economy is not only necessary to ensure long-term resource security but also short-term supplies of important materials. In many cities across the US, the UK and Europe, councils have suspended recycling to focus on essential waste collection services. The UK Recycling Association, for example, has warned about carboard shortages due to disrupted recycling operations with possible shortages for food and medicine packaging on the horizon.

Similarly, in China, most recycling sites were shut during the country’s lockdown presenting implications for global recycling markets with additional concerns that there will be a fibre shortage across Europe and possibly around the world.

Furthermore, worldwide COVID-19 lockdowns are resulting in a resurgence in the use of single-use packaging creating a new wave of plastic waste especially from food deliveries – already seen in China – with illegal waste fly-tipping dramatically increasing in the UK since the lockdown.

In this vein, concerns over the current global health crisis is reversing previous positive trends where many cities had established recycling schemes and companies and consumers had switched to reusable alternatives.

Secondly, the need to improve the working conditions of the people working in the informal circular economy, such as waste pickers and recyclers, is imperative. Many waste materials and recyclables that are being handled and collected may be contaminated as a result of being mixed with medical waste.

Now, more than ever, key workers in waste management, collection and recycling require personal protective equipment and social protection to ensure their safety as well as the continuation of essential waste collection so as not to increase the potential for new risks associated with additional infectious diseases.

In India, almost 450 million workers including construction workers, street vendors and landless agricultural labourers, work in the informal sector. In the current climate, the poorest who are unable to work pose a great risk to the Indian economy which could find itself having to shut down.

Moreover, many informal workers live in make-shift settlements areas such as Asia’s largest slum, Dharavi in Mumbai, where health authorities are now facing serious challenges to contain the spread of the disease. Lack of access to handwashing and sanitation facilities, however, further increase these risks but circular, decentralized solutions could make important contributions to sustainable sanitation, health and improved community resilience.

Thirdly, it is anticipated that in the long term several global supply chains will be radically changed as a result of transformed demand patterns and the increase in circular practices such as urban mining for the recovery and recycling of metals or the reuse and recycling of textile fibres and localized additive manufacturing (e.g. 3D printing).

Many of these supply chains and trade flows have now been already severely disrupted due to the COVID-19 pandemic. For example, the global garment industry has been particularly hard-hit due to the closure of outlets amid falling demand for apparel.

It is important to note, workers at the bottom of these garment supply chains are among the most vulnerable and most affected by the crisis as global fashion brands, for example, have been cancelling orders – in the order of $6 billion in the case of Bangladesh alone. Only after intense negotiations are some brands assuming financial responsibility in the form of compensation wage funds to help suppliers in Myanmar, Cambodia and Bangladesh to pay workers during the ongoing crisis.

In addition, the current pandemic is damaging demand for raw materials thereby affecting mining countries. Demand for Africa’s commodities in China, for example, has declined significantly, with the impact on African economies expected to be serious, with 15 per cent of the world’s copper and 20 per cent of the world’s zinc mines currently going offline. 

A further threat is expected to come from falling commodity prices as a result of the curtailment of manufacturing activity in China particularly for crude oil, copper, iron ore and other industrial commodities which, in these cases, will have direct impacts on the Australian and Canadian mining sectors.

This is all being compounded by an associated decline in consumer demand worldwide. For example, many South African mining companies – leading producers of metals and minerals – have started closing their mining operations following the government’s announcement of a lockdown in order to prevent the transmission of the virus among miners who often work in confined spaces and in close proximity with one another. As workers are laid off due to COVID-19, there are indications that the mining industry will see fast-tracking towards automated mining operations. 

All of these linear risks that have been exposed through the COVID-19 pandemic reinforce the need for a just transition to a circular economy. But while the reduction in the consumption of resources is necessary to achieve sustainability, the social impacts on low- and middle- income countries and their workers requires international support mechanisms.

In addition, the current situation also highlights the need to find a new approach to globalized retail chains and a balance between local and global trade based on international cooperation across global value chains rather than implementation of trade protectionist measures.

In this vein, all of the recovery plans from the global COVID-19 pandemic need to be aligned with the principles of an inclusive circular economy in order to ensure both short-term and long-term resilience and preparedness for future challenges and disruptions.