Can ‘western’ initiatives for sustainable supply chains save tropical peatlands? Evidence from the Indonesian palm oil sector

Despite the numerous initiatives for sustainable agricultural supply chains in high-income countries (HIC), there is little evidence on whether these initiatives effectively reduce environmental degradation in tropical cultivation areas. This paper, presented by the Land Matrix Initiative's Christoph Kubitza and Jann Lay at the 2024 World Bank Land Conference in Washington, compares patterns in oil palm planting and deforestation on peatlands in Indonesia between HIC investments, that are more frequently involved in sustainability initiatives, with domestic investments or those by neighboring low- and middle-income countries (LMIC). The dataset comprises 386 concessions in Kalimantan and Papua, their investment structure, annual maps on forest loss and oil palm cultivation, and spatial maps on peatlands. The results show a divergence in production practices after 2011, with actors tied to HIC reducing their environmental degradation while actors from LMIC kept their practices unchanged. While this is good news in terms of the effectiveness of ‘western’ initiatives, companies from HIC have only a limited market share compared to companies from LMIC.

Read the full paper here.