The opportunity cost of engaging in reduced-impact logging to conserve the orangutan: a case study of the management of Deramakot Forest Reserve, Sabah, Malaysia

Abstract

Managing the forested landscape in Malaysia and Indonesia for timber extraction while also conserving the endangered orangutan that inhabit some of the remaining forests in this region is a challenge. Heavy logging is a common feature of the Indonesian and Malaysian timber industries. It is profitable but detrimental to the survival of this primate species. A type of logging which appears to be compatible with maintaining orangutans in the forested landscape is light logging. It involves extracting fewer logs and ensures that the logged area is minimally damaged. However, switching to a light logging regime involves a financial opportunity cost, a cost which is an obstacle to the widespread adoption of this type of logging by businesses and the state. This paper reviews the case study of a unique light logging experiment conducted in the Deramakot Forest Reserve, in one of the orangutan's strongholds, the Malaysian state of Sabah. The Deramakot experiment claims to generate revenue from low-impact logging while also sustaining its population of orangutans. Here, we survey the importance of the timber industry to Sabah, the profitability of the Deramakot scheme, the orangutan conservation aspect of this scheme, and the influence of the politico-bureaucratic factor or public economicson sustaining the domestic light-logging agenda. Then, this paper attempts to answer the question of whether economic returns could be balanced with orangutan conservation given the light and heavy logging regimes, bearing in mind the opportunity costs associated with these. More specifically, using the data that has been made available from the Deramakot case study, this paperemploys a mathematical model to analyse whether the foregone profits of pursuing light logging is higher than setting aside strict protected areas while more intense logging the remaining forests, subject to the goal of maintaining a desired orangutan population size. The results reveal that, under certain conditions, the option of conserving the orangutan under mainly light logging is economically more attractive for a scenario involving Sabahan forests than the 2 option of strictly protecting orangutan habitats and heavily logging the forests without significant orangutan populations. This finding contributes to the question asked by conservationists of how forests should be partitioned to satisfy both economic and conservation needs.JEL Classifications: H00, Q23, Q57