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Greening Commodity Supply Chains in Emerging Markets: Challenges and Opportunities

The Tropical Forest Alliance 2020 (TFA 2020) is a global partnership that brings
together governments, private-sector and civil-society organizations to reduce
tropical deforestation associated with sourcing commodities such as palm oil, soy,
beef and paper and pulp.
The movement to end tropical deforestation is at a critical juncture. On the positive
side, the Paris Climate Conference COP21 led to a number of ambitious forestrelated
pledges from governments, donors and private-sector companies. The
2016 New York Declaration on Forests (NYDF) Progress Assessment Report notes
that efforts to eliminate deforestation from agricultural supply chains are increasing
(although the report notes that very few companies commit to zero deforestation
across their operations), and the membership of the Tropical Forest Alliance 2020
continues to grow. AlphaBeta’s past work with TFA 2020 also demonstrates that
several subnational governments have begun to develop ambitious programmes
to reduce deforestation across their jurisdiction.1 The research identified 61 such
programmes, which are fairly evenly distributed across Africa, Latin America
and Asia. More than half (34) of these jurisdictions are potentially relevant to the
mandate of TFA 2020, as they are operating in tropical forest regions and produce
relevant commodities such as palm oil, pulp, cattle, soy, cocoa and coffee.

While all this is encouraging, it will not be sufficient to reduce deforestation
significantly unless major emerging markets are engaged in eliminating
deforestation from commodity supply chains. This includes both major importers,
such as China and India, and also major producers who are also significant
consumers, such as Brazil and Indonesia. A strong fact base to inspire robust
action on greening supply chains in emerging markets is still missing. This
research aims to contribute to filling this gap by assessing (a) the importance of
emerging markets for reducing deforestation based on their current and future
commodity demand; (b) the commodity trade flows of major emerging markets
(including both importers and producers); and (c) the degree to which we are
starting to see increasing awareness of the need for sustainability and concerns
over deforestation in these markets.
This document is a briefing document prepared for the World Economic Forum in
Davos in 2018. The full report will expand on the findings presented in this paper
by taking a detailed look at the situation in China. In particular, it will examine
the links between tropical deforestation and China’s current and future demand
for certain commodities. It will also outline opportunities and potential actions to
reduce supply chain-related deforestation in the country.
We are grateful for the advice and input of many experts in academia,
government, not-for-profit organizations and industry. They all provided invaluable
guidance, suggestions and advice. AlphaBeta is responsible for the conclusions
and recommendations arising from the research.

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