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The cost of fire : an economic analysis of Indonesia’s 2015 fire crisis (English)

According to the government, 2.6 million hectares of Indonesian land burned between June and October 2015, an area four and half times the size of Bali. By October 2015, eight provinces had burned more than 100,000 hectares each. This is a particularly troubling development because Papua’s peatlands are some of the last intact in Indonesia. Draining and conversion of peatland, driven largely by palm oil production, contributes to the intensity of haze from fire. Indonesia’s fire story is not just one of loss and damage; fires contribute to significant economic upside for a diverse, if concentrated, group of actors. There are three common uses for fire in Indonesia: (i) land clearing and preparation; (ii) land acquisition; and (iii) as a mechanism to force inhabitants off the land. Analysis by the Center for International Forestry Research (CIFOR) provides an example of the role of fire in the lucrative palm oil industry. The CIFOR work finds that 85 percent of the cashflow generated goes to those in power or able to take financial risk, and to plantation developers. The World Bank estimates that the 2015 fires cost Indonesia at least 16.1 billion US Dollars equivalent to 1.9 percent of 2015 Gross Domestic Product (GDP). On October 23, 2015, President Joko Widodo called for a moratorium on new peatland concessions and a cancellation of existing concessions that have not been developed, thereby halting the legal conversion of peatland and peat swamp forests into agricultural land. The Government has shown commitment to address the underlying drivers of fires and haze, including through measures to restore and sustainably manage peatlands. Peatland restoration can be an important part of solving Indonesia’s fire and haze problem, but should be complemented with strong conservation measures.

Details

  • Document Date

    2016/02/01

  • Document Type

    Brief

  • Report Number

    103668

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Indonesia,

  • Region

    East Asia and Pacific,

  • Disclosure Date

    2016/03/02

  • Disclosure Status

    Disclosed

  • Doc Name

    The cost of fire : an economic analysis of Indonesia’s 2015 fire crisis

  • Keywords

    Center for International Forestry Research;oil palm;short period of time;business as usual scenario;food and agriculture organization;reduction in land value;palm oil production;flora and fauna;oil palm plantations;oil palm production;carbon dioxide equivalent;access to land;sustainable production practice;privileges and immunity;agriculture and forestry;poor land management;acute respiratory infection;political economy study;school closure;ecosystem service;land conversion;land acquisition;food crop;certification scheme;Health cost;Peat;heavy equipment;estate crop;carbon storage;land clearing;agricultural land;fire emissions;co2 emission;hectare cost;certification standard;long-term management;sustainable landscape;graduation rate;restoration plan;wetland habitat;respiratory illness;land licensing;spatial planning;customary practice;land use;local population;Infectious Disease;ecosystem structure;cargo ship;Child Mortality;school day;financial risk;long-term effect;plant growth;lost land;soil organism;Natural Resources;reasonable estimate;public revenue;annual revenue;fee revenue;tax revenue;long-term commitment;unintended effect;environmental stress;wage increase;Water Management;environmental cost;death toll;carbon content;construction cost;conservation measure;transportation sector;emergency response;environmental crisis;historical pattern;negative externality;government support;swamp forest;private benefit;assessment methodology;financing need;real gdp;long-term impact;fire suppression;photo credit;estimate impact;atmospheric chemistry;fire prevention;global temperature;production process;concessions boundaries;local elite;common use;wood fiber;agricultural commodity;land preparation;plantations expansion;Carbon Sink;genetic variability;carbon emission;biodiversity loss;forest fire;chronic exposure;agricultural production;plant species;plant physiology;plant productivity;local rainfall;burning biomass;secondary forest;sustainable agriculture;supply chain;sensitive ecosystems;forest asset;producer association;export value;primary forest;responsible production;carbon stock;conservation value;policy side;transport cost;trade service;local regulation;global impact;medical equipment;overtime pay;lost wages;

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Citation

The cost of fire : an economic analysis of Indonesia’s 2015 fire crisis (English). Indonesia sustainable landscapes knowledge,note no. 1 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/776101467990969768/The-cost-of-fire-an-economic-analysis-of-Indonesia-s-2015-fire-crisis