Forest conservation or palm oil plantation?

What is it about?

Export of palm oil has been a large foreign exchange earning source for Indonesian economy. However, the recent development of the palm oil plantation has been made, to a large extent, from the conversion of natural forest. This paper finds that a moratorium of such conversion may reduce such export earning and economic welfare. However, an international transfers equivalent to the value of the carbon-dioxide reduction may more than compensate the welfare reduction.

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Why is it important?

In the last decade, Indonesian economic growth has been quite low compared to earlies decades. This is a challenge to its aspiration to become an upper middle income country and to escape from the “middle income trap”. Unless compatible with this aspiration, a forest conservation strategy like the moratorium of forest conversion to palm oil plantation will not get a strong political support.

Perspectives

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Partnership between countries is necessarry to tackle many of mankind’s greatest challenges such as climate change. Particularly, when it involves challenges in resolving tradeoffs between various conflicting development agendas. This strengthens the relevance of SDGs Agenda 17 on global partnership to achieve 2030 agenda for sustainable development goals.

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