Exploring sustainable scenarios in debt-based social–ecological systems: The case for palm oil production in Indonesia

Abstract

A debt-based economy requires the accumulation of more and more debt to finance economic growth, while future economic growth is needed to repay the debt, and so the cycle continues. Despite global debt reaching unprecedented levels, little research has been done to understand the impacts of debt dynamics on environmental sustainability. Here, we explore the environmental impacts of the debt-growth cycle in Indonesia, the world’s largest debt-based producer of palm oil. Our empirical Agent-Based Model analyses the future effects (2018–2050) of power (im)balance scenarios between debt-driven economic forces (i.e. banks, firms), and conservation forces, on two ecosystem services (food production, climate regulation) and biodiversity. The model shows the trade-offs and synergies among these indicators for Business As Usual as compared to alternative scenarios. Results show that debt-driven economic forces can partially support environmental conservation, provided the state’s role in protecting the environment is reinforced. Our analysis provides a lesson for developing countries that are highly dependent on debt-based production systems: sustainable development pathways can be achievable in the short and medium terms; however, reaching long-term sustainability requires reduced dependency on external financial powers, as well as further government intervention to protect the environment from the rough edges of the market economy.

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    REDD, which stands for Reducing Emissions from Deforestation and Forest Degradation, is a United Nations-led program offering incentives for developing countries to preserve and enhance forests.

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Acknowledgements

This work was partially supported by the Postgraduate School at the James Hutton Institute, Aberdeen, UK. In addition, support was also provided by the University of Dundee (Geography and Environment Science). The authors are solely responsible for the content of this publication. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

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Gonzalez-Redin, J., Polhill, J.G., Dawson, T.P. et al. Exploring sustainable scenarios in debt-based social–ecological systems: The case for palm oil production in Indonesia. Ambio 49, 1530–1548 (2020). https://doi.org/10.1007/s13280-019-01286-8

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Keywords

  • Agent-based model
  • Debt
  • Ecosystem services
  • Palm oil
  • Social–ecological system
  • Sustainable development