This Arbor Day, Bureaucrats Barking up the Wrong Tree

It’s Arbor Day, and there is plenty of environmental progress to celebrate. Earth has more trees than it did 40 years ago, and according to a study published in the scientific journal Nature, “the global number of trees is approximately 3.04 trillion, an order of magnitude higher than the previous estimate.”

Unfortunately, that good news has not stopped out-of-control European Union (EU) environmental regulations from imposing a logjam on consumers the world over. European regulators are stacking on “deforestation-free” requirements that will chip away at the economy while doing a disservice to ecology. Implementation of the EU’s 2023 Deforestation Regulation (EUDR) will soon impact small and medium-sized firms, and American consumers will feel the impact from the other side of the Atlantic. The EU should cut these harmful regulations down to size and focus on pro-growth measures to help the environment.

Brussels bureaucrats often regulate first and ask questions later, and the EUDR is no different. The regulation sets forth an unattainable end: “any operator or trader who places these commodities [cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products] on the EU market, or exports from it, must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation.”

The EUDR requires granular geolocation data and strict documentation tracing commodities back to specific plots of land. This requires companies to build entirely new compliance systems and auditing processes. Needless to say, smaller suppliers often lack the technological or financial means to comply and larger companies with tight profit margins also struggle with these regulations. As a result, exporters—including those in the U.S.—are increasingly segmenting their supply chains into “EU-compliant” and “non-EU-compliant” streams. This segmentation introduces staggering inefficiencies, makes it difficult to produce products at scale, and increases administrative overhead.

These higher costs are certainly not confined to Europe. As Consumer Choice Center deputy director Yaël Ossowski explains, “Take IKEA’s best-selling KALLAX shelf unit—a particleboard bookcase made from wood-derived materials covered by the EUDR, which currently retails for around $80. With only 15 percent of what IKEA sells in the U.S. actually made domestically, this means that many IKEA products imported from Europe (including the KALLAX) must comply with expensive E.U. sourcing rules. Stack deforestation paperwork on top of tariffs, and the affordable furniture Americans count on starts looking a lot less affordable.”

The EUDR also creates compliance headaches for American farmers and producers, even though they operate in a country with low deforestation risk compared to many regions targeted by the rule. U.S. exporters of timber, soy, and beef must now invest in documentation systems and verification processes to maintain access to EU markets. These new compliance costs effectively function as a non-tariff barrier to trade, threatening jobs and harming millions of consumers in the process. Even producers who do not export directly to Europe can be affected indirectly, as domestic buyers impose similar traceability requirements to preserve their own export flexibility. This can disproportionately harm smaller American producers, who may lack the resources to implement sophisticated traceability systems, accelerating artificial consolidation in agriculture and reducing competition.

Fortunately, heavy-handed “deforestation” requirements are not the only way to keep forests flourishing. Rather than relying on top-down mandates like the EUDR, policymakers in the EU and U.S. can rely on market incentives to make forest conservation top of mind for companies. The most effective reforms are strengthening property rights and allowing landowners to capture more of the economic value of keeping forests intact. When landowners can monetize ecosystem services—such as reforestation, watershed protection, and biodiversity preservation—they gain a financial incentive to maintain and expand forest cover. For example, researchers have found that “granting full, legally recognized property rights to Indigenous communities in the Brazilian Amazon reduces deforestation and encourages forest regeneration, highlighting the importance of secure ownership for sustainable resource management.” The EU could insist that its member states and trading partners fully respect property rights and allow owners to keep the fruits of their labor.

Voluntary certification systems and supply-chain transparency tools also offer a market-friendly alternative to blanket mandates. Programs such as sustainable forestry certifications allow consumers and companies to signal their preferences without imposing one-size-fits-all rules on producers worldwide. 

This Arbor Day, the EU should embrace markets, not rigid rules, in its fight against deforestation. As usual, Brussels bureaucrats are barking up the wrong tree.