Oil palm development in Indonesia: Demand, trade, and land use


Principal Investigator
Senior Fellow, Emeritus
  • Professor, Economics, Emeritus
  • Senior Fellow, Stanford Woods Institute
The World Bank
PhD Student
Roz low res 9 11 cropped
Senior Fellow
  • William Wrigley Professor of Earth System Science
  • Senior Fellow, Stanford Woods Institute and Freeman Spogli Institute for International Studies
  • Senior Fellow and Founding Director, Center on Food Security and the Environment

Indonesia is currently the world’s top palm oil producer. Since the 1980s total land area planted to palm oil has increased by over 2,100 percent growing to 4.6 million hectares – the equivalent of six Yosemite National Parks. Plantation growth has predominately occurred on deforested native rainforest with major implications for global carbon emissions and biodiversity.

The ongoing expansion of oil palm plantations in the humid tropics, especially in Southeast Asia, is generating considerable concern and debate. Amid industry and environmental campaigners' claims, it can be hard to perceive reality. Is oil palm a valuable route to sustainable development or a costly road to environmental ruin? Inevitably, any answer depends on many choices. But do decision makers have the information they require to avoid pitfalls and make the best decisions? This research project examines what we know and what we don't know about oil palm developments.

Some facts are indisputable: among these are that oil palm is highly productive and commercially profitable at large scales, and that palm oil demand is rising. Implementing oil palm developments involves many tradeoffs. Oil palm's considerable profitability offers wealth and development where wealth and development are needed-but also threatens traditional livelihoods. It offers a route out of poverty, while also making people vulnerable to exploitation, misinformation and market instabilities. It threatens rich biological diversity-while also offering the finance needed to protect forest. It offers a renewable source of fuel, but also threatens to increase global carbon emissions. We remain uncertain of the full implications of current choices. How can local, regional and international benefits be increased while costs are minimized?