Environmental Tradeoffs in Commodity Production

Abstract

Global production of food, feed, fiber, and bio-based fuel commodities is essential to economic development and human well-being. These ‘soft’ commodities, so named because they are grown and not mined (WWF, 2012a), support basic human needs and sustain a growing population and economy. However, trends indicate that natural ecosystems are unable to support projected global demand for resources, and are already under strain from increasing consumption, dietary shifts, a rising middle class, and overall economic growth (WWF, 2012b). This suggests that the future will see increasing market price volatility, changes in production and consumption patterns, and unpredictable supply chain shocks within the soft commodity market. These changes will ripple throughout the business sector, governments, and civil society with profound economic, social, and environmental consequences. In the face of increasing uncertainty in soft commodity markets, businesses have a strong incentive to enhance the sustainability of their supply chains. Indeed, a long-term sustaining business model and natural resource conservation are often strongly intertwined. As freshwater becomes scarcer, for example, apparel manufacturers will face supply pressures and rising prices for thirsty cotton, while freshwater species will experience severe habitat degradation and loss. Overfishing will both harm the long-term prospects of companies sourcing fish products and result in significant loss of biodiversity. These examples illustrate that businesses and conservation groups would be well-served to identify where their goals overlap, and to work in partnership toward achieving those goals for mutual benefit.