Sumarga, E., L. Hein, A. Hooijer, and R. Vernimmen. 2016. Hydrological and economic effects of oil palm cultivation in Indonesian peatlands. Ecology and Society 21(2):52.http://dx.doi.org/10.5751/ES-08490-210252

Deforestation and oil palm expansion in Central Kalimantan province are among the highest in Indonesia. This study examines the physical and monetary impacts of oil palm expansion in Central Kalimantan up to 2025 under three policy scenarios. Our modelling approach combines a spatial logistic regression model with a set of rules governing land use change as a function of the policy scenario. Our physical and monetary analyses include palm oil expansion and five other ecosystem services: timber, rattan, paddy rice, carbon sequestration, and orangutan habitat (the last service is analysed in physical units only). In monetary terms, our analysis comprises the contribution of land and ecosystems to economic production, as measured according to the valuation approach of the System of National Accounts. We focus our analysis on government-owned land which covers around 97 % of the province, where the main policy issues are. We show that, in the business-as-usual scenario, the societal costs of carbon emissions and the loss of other ecosystem services far exceed the benefits from increased oil palm production. This is, in particular, related to the conversion of peatlands. We also show that, for Central Kalimantan, the moratorium scenario, which is modelled based on the moratorium currently in place in Indonesia, generates important economic benefits compared to the business-as-usual scenario. In the moratorium scenario, however, there is still conversion of forest to plantation and associated loss of ecosystem services. We developed an alternative, sustainable production scenario based on an ecosystem services approach and show that this policy scenario leads to higher net social benefits including some more space for oil palm expansion.

There is increasing experience with the valuation of ecosystem services. However, to date, less attention has been devoted to who is actually benefiting from ecosystem services. This nevertheless is a key issue, in particular, if ecosystem services analysis and valuation is used to support environmental management. This study assesses and analyzes how the monetary benefits of seven ecosystem services are generated in Central Kalimantan Province, Indonesia, are distributed to different types of beneficiaries. We analyze the following ecosystem services: (1) timber production; (2) rattan collection; (3) jelutong resin collection; (4) rubber production (based on permanent agroforestry systems); (5) oil palm production on three management scales (company, plasma farmer, and independent smallholder); (6) paddy production; and (7) carbon sequestration. Our study shows that the benefits generated from these services differ markedly between the stakeholders, which we grouped into private, public, and household entities. The distribution of these benefits is strongly influenced by government policies and in particular benefit sharing mechanisms. Hence, land-use change and policies influencing land-use change can be expected to have different impacts on different stakeholders. Our study also shows that the benefits generated by oil palm conversion, a main driver for land-use change in the province, are almost exclusively accrued by companies and at this point in time are shared unequally with local stakeholders.