COP27 has already made even less of a mark than COP26

This setback illustrates a defect in our strategy towards environmental problems of systemic significance. Getting everyone in a huge room to sign up for a ‘plan’ does not seem to be succeeding, but it remains the dominant approach for tackling these complicated policy concerns. COP27 has not produced anything more substantial.

As a result, there will be a void in policy that will be filled by empty promises to “remove deforestation from supply chains.” It’s unclear what this entails in specific terms. In reality, it often looks like punitive sin taxes for individuals who dare purchase or sell things that fall beyond the state’s recognised green orthodoxy (similar to sugar or tobacco taxes) or even more harmful measures like import bans.

These methods are short-sighted. Regulators  want environmentally damaging goods taken off the shelves, but they don’t seem to realise that usually their replacements are much worse for the planet. Like the EU’s Deforestation Due Diligence Proposal they make the same error of trying to curb palm oil imports, which just ends up driving more corporations to use other vegetable oils that are less land-efficient and hence speed up deforestation.

Adding to the consumer’s costs at a time when food prices are already climbing due to inflation is really terrible politics. Companies all around the world, but notably those in the food and consumer goods industries, are already striving to maintain low pricing and reasonable product costs. Governments should not force businesses to make more expensive ingredient choices in the vain hope of meeting an arbitrary deforestation target when food inflation has reached as high as 16.2 per cent as of October and the ongoing situation in Ukraine shows no sign of lessening the burden on international supply chains.

Market regulators should refrain from interfering and instead give capitalism a chance to flourish. The only technique that has shown to be reliably effective in addressing environmental problems is free-market innovation. Almost three quarters of corporations have made voluntary promises to address the problem of deforestation caused by palm oil, which is having a substantial effect. This is despite palm oil raising so much concern among European authorities who seem to believe that sweeping new regulations are the only way to tackle the problem.

The best thing our legislators can do is stand aside and let manufacturers reduce deforestation in their supply chains on their own. When they persist in meddling in the market, as they have with palm oil in Europe, they either achieve nothing or actively make matters worse. COP27 seems to have offered only a continuation of COP26’s blunders on deforestation, ensuring that the natural world will continue to suffer for at least another year.

Solving environmental issues requires approaches that work with capitalism rather than against it. On energy, that includes the use of nuclear power, funding for renewable energy sources, and the development of carbon capture technologies. It means fracking in the short term and hedging bets on new technologies like carbon sequestration, geoengineering and lab-grown meat for the longer term.

When it comes to deforestation, it means removing the political interference that distorts market forces from the equation. Instead of relying on global UN conferences to eliminate deforestation, we need industry-led, bottom-up reforms.