Total costs and environmental standards for selected agricultural products in Brazil, Germany and Indonesia

The impact on international competitiveness

authored by
U. Grote, C. Deblitz, S. Stegmann
Abstract

It is often supposed that the costs of higher environmental standards lead to unfair competitive disadvantages of countries. To test this hypothesis, a comparative study of the production and processing of vegetable oils, grain and broiler in Brazil, Germany and Indonesia was conducted. After identifying the relevant national environmental standards in these sectors, their cost implications were compared internationally. The study concludes that for the typical farms, the impacts of environmental standards on the production costs are relatively small. They can be relevant in the case of small profit margins (e.g. in broiler production). However, total cost differences due to the wage level, prices for land, machines, buildings and equipment are more significant and weaken this assumption. In the processing industry, the results are ambiguous. Further, it needs to be stressed that country-specific differences in environmental standards are not only determined by climate, but also by population density, national economic and social conditions as well as differences in the scarcity of environmental goods.

External Organisation(s)
University of Bonn
Type
Article
Journal
Quarterly Journal of International Agriculture
Volume
39
ISSN
0049-8599
Publication date
2000
Publication status
Published
Peer reviewed
Yes
ASJC Scopus subject areas
Geography, Planning and Development, Development
Sustainable Development Goals
SDG 13 - Climate Action