Impacts of geopolitics and policy on Latin American biodiversity and water resources

Abstract Latin America is a major agricultural producer with important natural resources. Efforts have been made to protect sensitive areas but are hindered by agricultural trade disruptions outside the control of individual countries due to globally integrated crop markets. This analysis assesses the effects of two trade shocks, that is, the war in Ukraine and vehicle decarbonization in the United States (US), on biodiversity and water resources in Latin America. Results show that an increase in maize and wheat exports from the region triggered by the war in Ukraine negatively affects biodiversity in Brazil and leads to cropland expansion into drought‐prone areas in Argentina and Chile. For the case of reduced crop exports from Latin America due to US vehicle decarbonization and the corresponding shift away from US maize ethanol, the pressure on arable land in areas of high biodiversity and water stress is eased. As opposed to agricultural carbon emissions, which have global impacts, biodiversity and water issues have a strong local and regional significance. Regulatory frameworks aiming to protect these regions should be forward looking to detect and shield vulnerable areas from future threats. Other changes affecting global agriculture and trade, for example, sustainable aviation fuels in the US or the European Farm‐to‐Fork policy, need to be anticipated for effective policies in Latin America EconLit Citations: Q13, Q25, Q34, Q56.