Addressing biodiversity loss when international markets of agricultural commodities are oligopolistic

Abstract

Recent evidence shows that international markets of agricultural commodities are oligopolistic. This article uses a theoretical framework to identify the effects of adopting either unilateral (i.e. non-cooperative) or cooperative environmental policies on local biodiversity when countries compete in this market structure. The results reveal that unilateral environmental policies can negatively affect local biodiversity in foreign countries. This suggests that protection of natural habitats can only be achieved by means of international cooperation.