Higher Palm Oil Prices Could Bankroll Conservation Projects

12 Jun 2015 --- Higher supermarket prices for eco-friendly palm oil could help save endangered species – according to University of East Anglia (UEA) research.

Lead researcher Prof Ian Bateman, from UEA’s School of Environmental Sciences, said: “International governments have failed to stem the environmental damage caused by oil palm plantations. We wanted to find a new way of halting biodiversity loss that actually becomes profitable for private companies.”

An international research team of economists and ecologists looked for ways to make conservation profitable. The research was led by UEA, in collaboration with the Zoological Society of London (ZSL), the University of Vermont (US) and the World Wildlife Fund (US).

They focused on Sumatra – an Indonesian island and biodiversity hot-spot which has seen tropical forests replaced with plantations, resulting in a rapid decline of species.

The research team carried out biodiversity surveys across palm plantations, nurseries, forest and cleared land in central Sumatra. They also obtained access to company financial records to see how setting aside land for conservation affects biodiversity and company costs.

The research shows that the location of conservation areas had a major effect upon both the effect on wildlife and the impact on company profits. By taking both of these factors into consideration the researchers identified areas which provide the best balance between promoting biodiversity and reducing costs to companies.

They then studied the price premium which firms might be able to charge for ‘conservation grade’ palm oil – obtained from companies who have placed substantial areas of land into conservation. Results show that the higher prices shoppers were willing to pay for conservation grade products more than made up for companies’ costs of providing conservation land.

Prof Bateman said: “Consumers’ willingness to pay for sustainably grown palm oil has the potential to incentivise private producers enough to engage in conservation activities. This would support vulnerable ‘Red List’ species.

“Combining all of these findings together allows us to harness the power of the market and identify locations where cost-effective and even profitable conservation can take place.

“Our research shows the importance of incentivising individual landowners. Importantly, this strategy does not require government intervention or international agreements and avoids the problem of corruption.”

Lead wildlife scientist Dr Robin Naidoo, from WWF US, said: “This research is critical because one fifth of the world’s vertebrates are at imminent risk of extinction. The overwhelming cause of this biodiversity loss is land-use change, driven by the expansion of agriculture and plantations for crops such as oil palm. Conversion to agriculture is resulting in the loss of tropical forests at an estimated rate of 13 million hectares each year, therefore it is imperative we find solutions that minimize the negative impact of agriculture on biodiversity.”

Dr Chris Carbone, senior research fellow at ZSL, said: “Our research shows that habitats surrounding palm oil plantations, although they are affected by agricultural activity, still sustain a number of threatened species. It may be possible to protect, and even encourage, wildlife in these areas at relatively low and sustainable economic costs without heavily impacting palm oil production.”

Prof Brendan Fisher, of the University of Vermont’s Gund Institute for Ecological Economics, said: “We face two potentially opposing forces. One is increasing demand for food, fiber and fuel products across the globe. The other is the absolute imperative to stop the loss of biodiversity from the planet. This work here shows how important it is for industry and scientists to work together and find potential win-wins, or at least to mitigate the trade-offs between conservation and agricultural production."