Effects of demand-side restrictions on high-deforestation palm oil in Europe on deforestation and emissions in Indonesia. (5th January 2022)

• Record Type: Journal Article
• Authors: Busch, Jonah; Amarjargal, Oyut; Taheripour, Farzad; Austin, Kemen G; Siregar, Rizki Nauli; Koenig, Kellee; Hertel, Thomas W
• Is Part Of: Environmental research letters. Volume 17:Number 1(2022)
• Publication Date: 2022-01-05
• Subjects: climate policy -- forest-risk commodities -- land-use change -- oil palm -- supply chains -- teleconnections -- trade; Environmental sciences -- Periodicals; Human ecology -- Research -- Periodicals; Environmental health -- Periodicals; 333.7
• DOI: 10.1088/1748-9326/ac435e
• Languages: English
• ISSNs: 1748-9326

Abstract

Abstract: 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 tCO2 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/tCO2 . 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.