Who Pays for Climate Action? The Disproportionate Impact of Deforestation-Free Regulations on Smallholder Farmers

Abstract

The European Union Deforestation Regulation (EUDR), enacted in mid-2023, marks a definitive paradigm shift in global environmental governance, moving from the era of voluntary market- based sustainability standards to a new regime of mandatory state-led due diligence. While framed by Brussels as a critical, non-discriminatory intervention to halt global biodiversity loss and curb greenhouse gas emissions, this article critiques the regulation through the theoretical lenses of political ecology and Third World Approaches to International Law (TWAIL). Adopting a Qualitative Literature Review (QLR) methodology, this study synthesizes findings from 85 peer- reviewed articles and authoritative policy reports published between 2020 and 2025. We analyze the structural mechanisms that disproportionately burden smallholder farmers in the Global South, with a specific focus on the Indonesian palm oil sector. The analysis identifies three primary mechanisms of exclusion: (1) Technocratic Exclusion, wherein prohibitive costs of digital traceability and geolocation create a "digital apartheid" for resource-poor farmers; (2) Legal Entrapment, where supranational legality requirements effectively criminalize informal land tenure systems common in the tropics; and (3) Discursive Violence, which frames tropical producers as environmental liabilities while obscuring the historical ecological debt of the Global North. The findings suggest that without robust "Just Transition" mechanisms—such as jurisdictional certification and direct financial transfers—deforestation-free regulations function as a form of "green protectionism," displacing the cost of climate action onto the world’s most vulnerable populations. The article concludes by proposing a framework for trade justice centered on distributive equity and mutual recognition.