The costs of reducing deforestation in Indonesia
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In this second contribution to the Policy Dialogue, Colin Hunt emphasises the large contribution that oil palm plantations and the pulp and paper industry have been making to Indonesia's economic growth in recent years, notwithstanding the environmental consequences of such activities. The implication is that avoided deforestation can be expected to have a significant negative impact on segments of the population who would benefit from the business and employment opportunities that would otherwise be generated, directly or indirectly. Palm oil companies typically spend about three dollars on goods, services and labour for every dollar of profit. The author argues that any compensation package for avoided deforestation needs to include all the potential beneficiaries of palm oil production, not just the palm oil companies, and to generate economic activity similar to that being replaced. (Ed.)
Bulletin of Indonesian Economic Studies
Copyright 2010 Routledge. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal website for access to the definitive, published version.
Economics not elsewhere classified