03 March 2010

eating the rainforest

Photo Courtesy: Lush Cosmetics. Wash your hands off palm campaign

I have been thinking about how to talk about palm oil without actually saying, "Save the Orangutans" - I have previously mentioned and believe that conservation efforts should be based on economic facts rather than the sympathy factor.

First of all, it must be said that palm oil is everywhere. Up until 2008 in the lead up to the famous Greenpeace campaign against Dove, palm oil was thought to be found only in cosmetics. Today however, palm oil is being used widely in the food industry as well. There is no requirement for it to be labelled 'palm oil' and manufacturers can get away with labeling it 'vegetable oil'. According to Palmoilaction - it is being used in products by Sara Lee, Cadburys, Pringles, KFC, Maggie Noodles etc. The most recent Greenpeace campaign video (below) highlights use of palm oil in Nestle Kit-Kat Bars. I wonder how these companies justify this in their CSR policies.

A previous post on wide-scale deforestation in Indonesia talks mainly about illegal timber. Palm oil means even more money than timber to some people. Global demand for palm oil is now more than 40 million tons per year making it the mainstay of Indonesian and Malaysian economy. Much of the land used for the cultivation of palm oil was former rain-forest. The destruction of rain-forests not only means habitat destruction but loss of valuable carbon sinks.

China, India and other emerging markets are the biggest buyers of palm oil. Since it is a cheap form of vegetable oil containing no trans-fats, it is used widely in food preparations. It is also a feasible source of bio-diesel - the irony is not lost to me. There have been several reports stating that preservation of rain-forests mean more money than its destruction but palm oil means the money comes quicker. Intact rain-forests contribute in many ways to a nation's economy by means of eco-tourism, carbon finance, etc.

A study in Conservation Letters last month estimated that if REDD (Reducing Emissions from Deforestation and Degradation) is included in a cap-and-trade market for greenhouse gas emissions, payments for "avoided deforestation" could range between $1,500 and $11,800 per hectare, depending on when the carbon credits are allocated and sold. In comparison, the oil palm market was estimated to generate a net present value between $3,800 and $9,600 per hectare over a 30-year period.

Although a vast proportion of the Indonesian economy is dependent on palm oil, there is a way to make it more sustainable and the key here lies in increasing productivity in the areas already under cultivation without destroying new forests. How is this possible? Consumer awareness. When demand for palm oil reduces, the destruction of forests for oil will taper off. When this kicks in and carbon finance money is paid out, some of this will be invested into sustainable options thereby uplifting people out of poverty.

I honestly do believe that people living in crushing poverty do not destroy the environment out of malice but simply because they have no choice. Unless nations that are better-off demand that exploitation cannot continue, local governments of poorer countries will not seek alternatives. A seemingly micro-issue like palm oil is connected to the much larger macro-issue of food production, global warming and the global economy. The next time you go shopping consider this: you might be eating the rain-forest without even knowing about it.

Oh! and Save the Orangutans...

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