Environmental, Economic, and Social Consequences of the Oil Palm Boom

Posted: 26 Oct 2020

See all articles by Matin Qaim

Matin Qaim

University of Goettingen (Gottingen)

Kibrom T. Sibhatu

University of Goettingen (Gottingen)

Hermanto Siregar

Bogor Agricultural University - Department of Economics

Ingo Grass

University of Hohenheim

Date Written: October 2020

Abstract

Rising global demand for vegetable oil during the last few decades has led to a drastic increase in the land area under oil palm. Especially in Southeast Asia, the oil palm boom has contributed to economic growth, but it has also spurred criticism about negative environmental and social effects. Here, we discuss palm oil production and consumption trends and review environmental, economic, and social consequences in different parts of the world. The oil palm expansion has contributed to tropical deforestation and associated losses in biodiversity and ecosystem functions. Simultaneously, it has increased incomes, generated employment, and reduced poverty among farm and nonfarm households. Around 50% of the worldwide oil palm land is managed by smallholders. Sustainability trade-offs between preserving global public environmental goods and private economic benefits need to be reduced. We discuss policy implications related to productivity growth, rainforest protection, mosaic landscapes, land property rights, sustainability certification, and smallholder inclusion, among others.

Suggested Citation

Qaim, Matin and Sibhatu, Kibrom T. and Siregar, Hermanto and Grass, Ingo, Environmental, Economic, and Social Consequences of the Oil Palm Boom (October 2020). Annual Review of Resource Economics, Vol. 12, Issue 1, pp. 321-344, 2020, Available at SSRN: https://ssrn.com/abstract=3716724 or http://dx.doi.org/10.1146/annurev-resource-110119-024922

Matin Qaim (Contact Author)

University of Goettingen (Gottingen) ( email )

Platz der Gottinger Sieben 3
Gottingen, D-37073
Germany

Kibrom T. Sibhatu

University of Goettingen (Gottingen)

Platz der Gottinger Sieben 3
Gottingen, D-37073
Germany

Hermanto Siregar

Bogor Agricultural University - Department of Economics ( email )

Indonesia

Ingo Grass

University of Hohenheim

Fruwirthstr. 48
Stuttgart, 70599
Germany

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