Open AccessEffects of demand-side restrictions on high-deforestation palm oil in Europe on deforestation and emissions in Indonesia
Author(s) -
Jonah Busch,
Oyut Amarjargal,
Farzad Taheripour,
Kemen Austin,
Rizki Nauli Siregar,
Kellee Koenig,
Thomas W. Hertel
Publication year - 2022
Publication title -
environmental research letters
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.37
H-Index - 124
ISSN - 1748-9326
DOI - 10.1088/1748-9326/ac435e
Subject(s) - deforestation (computer science) , palm oil , agricultural economics , natural resource economics , economics , land use, land use change and forestry , environmental science , agroforestry , business , land use , ecology , computer science , programming language , biology
Demand-side restrictions on high-deforestation commodities are expanding as a climate policy, but their impact on reducing tropical deforestation and emissions has yet to be quantified. Here we model the effects of demand-side restrictions on high-deforestation palm oil in Europe on deforestation and emissions in Indonesia. We do so by integrating a model of global trade with a spatially explicit model of land-use change in Indonesia. We estimate a European ban on high-deforestation palm oil from 2000 to 2015 would have led to a 8.9% global price premium on low-deforestation palm oil, resulting in 21 374 ha yr −1 (1.60%) less deforestation and 21.1 million tCO 2 yr −1 (1.91%) less emissions from deforestation in Indonesia relative to what occurred. A hypothetical Indonesia-wide carbon price would have achieved equivalent emission reductions at $0.81/tCO 2 . Impacts of a ban are small because: 52% of Europe’s imports of high-deforestation palm oil would have shifted to non-participating countries; the price elasticity of supply of high-deforestation oil palm cropland is small (0.13); and conversion to oil palm was responsible for only 32% of deforestation in Indonesia. If demand-side restrictions succeed in substantially reducing deforestation, it is likely to be through non-price pathways.