Can ‘Western’ initiatives for sustainable supply chains save tropical peatlands? Evidence from the Indonesian palm oil sector

Christoph Kubitza, Sandra Eckert and Jann Lay

No 344268, IAAE 2024 Conference, August 2-7, 2024, New Delhi, India from International Association of Agricultural Economists (IAAE)

Abstract: Despite the numerous ‘Western’ initiatives to improve the sustainability of global agricultural supply chains, there is little evidence on whether these initiatives can effectively reduce environmental degradation in tropical cultivation areas at scale. In our study, we analyze patterns in the establishment of oil palm plantations and deforestation on peatlands in Indonesia. We compare plantations established by investors from high-income countries (HIC), many of which are covered by sustainability certification, with plantations established by domestic investors or by investors from other low- and middle-income countries (LMIC). Our dataset comprises 386 concessions in Kalimantan and Papua with their investment structure, annual satellite imagery on forest loss and oil palm cultivation, and spatial maps on peatlands. Our results show a divergence in production practices in global agricultural supply chains after 2011, with actors tied to HIC reducing degradation of peatlands within their concessions, while actors from LMIC continued to show no specific protection of these high conservation value areas. While this is good news in terms of the effectiveness of ‘western’ initiatives for sustainable supply chains, companies linked to HIC comprise only 10% of the concession area in the research region compared to companies from LMIC which will limit the overall impact of ‘western’ supply chain initiatives.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Date: 2024-08-07
New Economics Papers: this item is included in nep-agr, nep-dev, nep-env, nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ags:cfcp15:344268

DOI: 10.22004/ag.econ.344268

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