Palm Oil and the Politics of Deforestation in Indonesia

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. AbstractThis paper studies the interactions between political and economic incentives to foster forest conversion in Indonesian districts. Using a district-level panel data set from 2001 to 2016, we analyze variation in remotely sensed forest loss and forest fires as well as measures of land use licensing. We link these outcomes to economic incentives to expand oil palm cultivation areas as well as political incentives arising before idiosyncratically-timed local mayoral elections. Empirical results document substantial increases in deforestation and forest fires in the year prior to local elections. Additionally, oil palm plays a crucial role in driving deforestation dynamics. Variations in global market prices of palm oil are closely linked to deforestation in areas which are geo-climatically best suited for growing oil palm and they amplify the importance of the political cycle. We thus find clear evidence for economic and political incentives reinforcing each other as drivers of forest loss and land conversion for oil palm cultivation. JEL-Code: O13, Q15, Q56, P16

How contradictory EU policies led to the development of a pest: The story of oilseed rape and the cabbage stem flea beetle

“…Possibly as a direct result of this decline in the area of OSR grown, and in order to meet the EU transport targets for 2020, imports of palm oil used for biodiesel reached an all-time high in 2020 (Rangaraju, 2021). These imports are strongly liked with Indirect Land Use Changes and deforestations in third (non-EU) countries (Cazzolla Gatti et al, 2019;Cisneros et al, 2020).…”

The role of elections as drivers of tropical deforestation

“…For instance, in “green” states environmental policy is more likely to advance during the election period, whereas in “brown” states it is more likely to retract (List and Sturm, 2006). A recent study investigating the economic and political incentives of deforestation in Indonesia found that deforestation substantially increases before a mayoral election, suggesting that political incentives reinforce tropical deforestation (Cisneros et al, 2021). This suggests that elections can influence deforestation, but broad generalizations should be made cautiously given the limited geographical scope, or the limited quality and resolution of deforestation data used in these studies so far.…”