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The super-rich are causing the destruction of tropical forest areas

Bern - One of the main causes of deforestation, especially in tropical regions, is the expansion of cultivated areas. Deforestation not only releases carbon, it also leads to the loss of animal and plant diversity and entire ecosystems. A recent study has shown that wealthy private individuals, who are increasingly investing in the agricultural sector, play an important role in the destruction of forest areas. The development is fueling the cultivation of vegetable raw materials that are suitable for human nutrition, for industry and as animal feed. This flow of capital in turn contributes directly to deforestation in the global south.

So-called flex crops, agricultural products such as soy, palm oil or sugar cane, which serve both human nutrition and feed production or industrial purposes, are particularly important. Previous studies have shown that the cultivation of oil crops such as palm oil or soy alone is responsible for around a quarter of the emissions that arise worldwide due to the deforestation of forests. The boom in flex crops can be traced back to various global socio-economic developments; one of them is growing inequality. The influence of investments by extremely wealthy private individuals has remained largely unexplored so far.

The super rich invest in flex crops

The new study, carried out by Graziano Ceddia at the Center for Development and Environment (CDE) at the University of Bern, examined for the first time how the agricultural investments of the super-rich are affecting the expansion of flex crops in the global south. The work, which over the period from 1991 to 2014 concentrated on 21 countries in Latin America and Southeast Asia, shows that the increase in wealth of wealthy individuals correlates strongly with the influx of foreign direct investment into agriculture in these two regions of the world - and thus leads to expansion of the cultivation areas of Flex-Crops.

At the same time, it became apparent that global investors were drawn to the expectation of high returns on such investments. "Private investors are investing their capital in the agricultural sector in the global south because the returns on traditional investments have declined," said study author Ceddia.

In summary, it can be said that the concentration of wealth among wealthy private investors plays a decisive role in the expansion of the agricultural area in the global south and thus contributes directly to deforestation. According to the study, which has now been published in the journal "Nature Sustainability", a one percent increase in the wealth of the super-rich led to an expansion of flex-crop acreage by 2.4 to 10 percent during the period under review.

Inequality is environmentally damaging

"The results make it clear that it is important to study the impact of inequality on the environment, focusing not only on the distribution of income but also on the distribution of wealth," says Ceddia. Because only large fortunes made private investments in the agricultural sector possible on a large scale. And wealth is distributed much more unevenly than income. "The study makes it clear that inequality must be reduced urgently if one wants to minimize environmental risks." In addition, research on the connections between wealth distribution, investments and environmental degradation must be intensified. (red, February 26, 2020)