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REDD may not provide sufficient incentive to developers over palm oil

External Reference/Copyright
Issue date: 
February 22, 2010
Publisher Name: 
Rhett A. Butler
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Payments for forest conservation under the proposed REDD mechanism are unlikely to provide a viable economic alternative to oil palm agriculture at current prices. Lian Pin Koh (ETH Zürich) and Rhett A. Butler, mongabay.com

Note from Rhett Butler:
History: The following was published in the ITTO Tropical Forest Update (19/1), which came out the week of February 15, 2010. The article was written in 2009 shortly after the publication of "REDD in the red: palm oil could undermine carbon payment schemes" in Conservation Letters. "REDD in the red" was an expansion of work published in 2007 on mongabay.com and in the Jakarta Post. Since publication of "REDD in the red", several other papers have been published on the subject, including Venter et al (2009) and Persson and Azar (2010).

REDD: Despite the passage of a year, the outlook for REDD is not much clearer. REDD was one of the areas of progress during talks in Copenhagen last December and six wealthy countries agreed to provide $3.5 billion for REDD readiness activities between 2010 and 2012, but the talks produced no definitive language on the matter. Observers are now focused on the upcoming Governor's Climate and Forests Task Force conference in Sumatra for insight on how REDD may proceed down a bi-lateral path.

Beyond the economic issues mentioned in this article, the challenges for REDD remain daunting. Concerns over implementation, governance, forestry definitions, finance, project scale and design, and land rights and equity, among others, are unsettled at present.

In less than a generation oil palm cultivation has emerged as a leading form of land use in tropical forests, especially in Southeast Asia. Rising global demand for edible oils, coupled with the crop’s high yield, has turned palm oil into an economic juggernaut, generating US$ 10 billion in exports for Indonesia and Malaysia, which account for 85 percent of palm oil production, alone. Today more than 40 countries - led by China, India, and Europe - import crude palm oil.

The economic importance of the oil palm industry to Southeast Asia is undeniable. But such financial gains have come at a high price for the native wildlife and traditional rural livelihoods in this region. Conservation scientists have shown that oil palm expansion over the past few decades has led to the destruction of large swaths of tropical rainforests—to the detriment of many rare and endangered species that depend on these forests for survival (Fitzherbert et al. 2008; Koh and Wilcove 2008; Danielsen et al. 2009). Furthermore, social activist groups, such as Oxfam (www.oxfam.org) and Sawit Watch Indonesia (www.sawitwatch.or.id) have documented numerous cases of alleged land-use conflicts between oil palm companies and indigenous communities. Not only are such impacts continuing, but they are likely to intensify in the future as international demand for oil palm products continues to grow.

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Extpub | by Dr. Radut