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The costs of reducing deforestation in Indonesia


  • Colin Hunt


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.)

Suggested Citation

  • Colin Hunt, 2010. "The costs of reducing deforestation in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 46(2), pages 187-192.
  • Handle: RePEc:taf:bindes:v:46:y:2010:i:2:p:187-192
    DOI: 10.1080/00074918.2010.503563

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    Cited by:

    1. Ryan Edwards, 2015. "Is plantation agriculture good for the poor? Evidence from Indonesia's palm oil expansion," Departmental Working Papers 2015-12, The Australian National University, Arndt-Corden Department of Economics.
    2. Hein, Jonas, 2013. "Reducing Emissions from Deforestation and Forest Degradation (REDD+), Transnational Conservation and Access to Land in Jambi, Indonesia," EFForTS Discussion Paper Series 2, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    3. Brockhaus, Maria & Obidzinski, Krystof & Dermawan, Ahmad & Laumonier, Yves & Luttrell, Cecilia, 2012. "An overview of forest and land allocation policies in Indonesia: Is the current framework sufficient to meet the needs of REDD+?," Forest Policy and Economics, Elsevier, vol. 18(C), pages 30-37.

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