Eliot Martin (FPAN-MS ‘19) reflects on his participation in the UN climate negotiations which took place in Katowice, Poland this past December. The discussions on palm oil revealed the complexity of the challenges facing low- and middle-income countries in realizing sustainable development objectives.
Palm oil production has attracted attention in recent years due to the potential deforestation it causes in ecologically sensitive areas. While attuned to the challenges of climate change and environmental degradation, several speakers at Indonesia’s COP24 Pavilion events concerning palm oil on the morning of December 7, 2018, pushed back against the prevailing dialogue of palm oil production primarily destructive nature. Instead, palm oil production was touted as a boon to rural development and a potential pathway to meet other sustainable development objectives. Indeed, the Indonesian palm oil value chain reveals difficult trade-offs that developing countries face when lacking adequate international financial and institutional support for meeting environmental objectives.
According to speakers at the morning’s events, rural poverty has plagued Indonesia for decades, and the profitability of palm oil production in recent years has offered a promising way to help support livelihoods in the world’s fourth most populous country. With proper management, palm oil has been viewed not only as a path to earning a livelihood for those with marginal incomes, but also as less land-intensive than alternative crops because palm oil productivity per hectare is multiples greater than any other oilseed. Because of its economic development potential and relative ecological benevolence, the Indonesian government adopted a policy of granting land development rights for parcels less than 5 hectares for palm oil farms. Encouraged by the success of their peers’ palm oil farms, bolstered by policy support, and unimpeded by effective legal protections for forests, many smallholders have entered the market following unsustainable practices.
The economic development offered by resource exploitation was viewed as a right by some of the speakers from Indonesia. It was recognized that the world’s most developed countries long ago depleted their natural resources to make way for development, and that similar pathways may be their only means of achieving the same prosperity. This position is guided by harsh economic realities rather than hubris. Interestingly, the same speakers who advocated for land development cherished sustainability initiatives. The Indonesian government also seems caught in the crosshairs of preventing further deforestation and fostering economic growth. For the time being, the pendulum seems to have swung in favor of meeting environmental commitments.
A presidential decree has enforced a three-year moratorium on deforestation and the granting of further land development rights in Indonesia. Furthermore, the government has established a sustainability certification scheme for palm oil in partnership with domestic civil society partners and UKAID. The government has set the ambitious goal of certifying all its palm oil farms as meeting Indonesian Sustainable Palm Oil (ISPO) standards within a decade. The ISPO certification also includes labor standards in addition to its environmental requirements. To achieve this lofty goal, ISPO is working to establish partnerships with buyers to get commitments to only purchase sustainable palm oil, such that sustainability certification can be the new minimum environmental standard. Price premiums afforded by certification offer potential economic incentive to maintain such standards. However, success will largely rest on the demand for certified palm oil displacing the commodity palm oil market.
According to one speaker from the Indonesian government, approximately one-third of the country’s land-area is set aside for conservation, as the current moratorium stands. She claimed this was more than generous given the country’s massive population and development imperative. However, there are forces that continue to undermine the stated goodwill of the Indonesian government in balancing development and sustainability objectives. At the broadest level, the moratorium policy is doomed to be limited in its efficacy because it lacks a clear legal definition for what land is and isn’t included—estimates of the amount of land covered by the conservation policy vary by tens of millions of hectares. This disparity complicates already limited enforcement mechanisms.
Another challenge of achieving a balance between development and sustainability is imposed by demand expansion policy. In an effort to stabilize and increase palm oil prices, meet renewable energy production objectives, and improve nutrition, public and private entities have pursued the development of palm oil biofuels and fortified cooking palm oil. While supportive of sustainable development objectives in some ways, these pursuits also create a greater economic incentive for deforestation.
Indonesia now finds itself in a no-win position with a commodity that has become the backbone of its rural economy. The most promising path forward for the Indonesian people and the planet may be reliant on a broad coalition of stakeholders from beyond its borders. Commitments are needed from companies to only purchase sustainable palm oil to shift demand signals. Greater financial and technical support will likely be needed to scale certification, enable firm legal protection and enforcement of land use, and promote sustainable intensification of existing farms.
Indonesia isn’t going to compromise the gains to be had from palm oil production, but the world can’t afford the loss of Indonesia’s forests and ecosystems. This is just one of many cases that illustrates the complexities of sustainable development and the imperative that negotiators from around the world face in developing and implementing concrete next steps for implementing the Paris Agreement. This case illustrates the imperative for international policymakers to engage the private and civil sectors to work with market mechanisms to operationalize sustainable development. Greater capital investments and multi-stakeholder accounting for economic and legal levers at various levels of socio-economic structures are ultimately necessary to achieve economic-environmental win-wins.
*An earlier version of this article appeared on the Tufts University Climate Policy Lab Blog on December 7, 2018, available here: https://www.climatepolicylab.org/news/2018/12/7/a-morning-at-the-unfccc-cop24-indonesia-pavilion-illustrates-the-tension-behind-common-but-differentiated-responsibilities#
Eliot Martin is a Food Policy and Applied Nutrition MS Candidate in his last semester at the Friedman School. His studies and extracurricular engagements have focused on furthering expertise in econometrics, environmental sustainability, and strategic management, with the hopes of working to progress sustainability in cross-functional and trans-sectoral roles after graduation. This piece reflects on Eliot’s time as a member of the delegation representing Tufts University at the UNFCCC COP 24 Climate Change Negotiations in Katowice, Poland in December 2018. He can be contacted at firstname.lastname@example.org.