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.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
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.
Abel, N., D.H.M. Cumming, and J.M. Anderies. 2006. Collapse and reorganization in social-ecological systems: Questions, some ideas, and policy implications. Ecology and Society 11: 17.
Alwarritzi, W., N. Teruaki, and H. Yosuke. 2015. Analysis of the factors influencing the technical efficiency among oil palm smallholder farmers in Indonesia. Procedia Environmental Sciences 28: 630–638.
Angelsen, A. (ed.). 2008. Moving ahead with REDD: Issues, options and implications. Bogor: Center for International Forestry Research (CIFOR).
Balbi, S., and C. Giupponi. 2010. Agent-based modelling of socio-ecosystems: A methodology for the analysis of adaptation to climate change. International Journal of Agent Technologies and Systems 2: 17–38.
Balmford, A., A. Bruner, P. Cooper, R. Costanza, S. Farber, R.E. Green, M. Jenkins, P. Jefferiss, et al. 2002. Economic reasons for conserving wild nature. Science 297: 950–953.
Bellver-Domingo, A., F. Hernandez-Sancho, and M. Molinos-Senante. 2016. A review of payment for ecosystem services for the economic internalization of environmental externalities: A wáter perspective. Geoforum 70: 115–118.
Bousquet, F., and C. Le Page. 2004. Multi-agent simulations and ecosystem management: A review. Ecological Modelling 176: 313–332.
Burkhard, B., B.D. Fath, and F. Müller. 2011. Adapting the adaptive cycle: Hypotheses on the development of ecosystem properties and services. Ecological Modelling 222: 2878–2890.
Butler, R.A., L.P. Pin Koh, and J. Ghazoul. 2009. REDD in the red: Palm oil could undermine carbon payment schemes. Conservation Letters 2: 67–73.
Carlson, K.M., L.M. Curran, G.P. Asner, A.M. Pittman, S.N. Trigg, and J.M. Adeney. 2013. Carbon emissions from forest conversion by Kalimantan oil palm plantations. Nature Climate Change 3: 283–287.
Carse, J.P. 1987. Finite and infinite games: A vision of life as play and possibility. New York): Ballantine Books.
Chain Reaction Research. 2017. Banks finance more palm oil than investors: Investors face indirect exposure. Aid environment, Climate Advisers, Profundo [online]. Accessed May 7, 2018, from https://chainreactionresearch.files.wordpress.com/2017/02/banks-financing-palm-oil-crr-170203.pdf.
Daly, H. 2011. Growth, debt, and the World Bank. Ecological Economics 72: 5–8.
Dawson, T.P., M.D.A. Rounsevell, T. Kluvánková-Oravská, V. Chobotova, and A. Stirling. 2010. Dynamic properties of complex adaptive ecosystems: Implications for the sustainability of service provision. Biodiversity and Conservation 19: 2843–2853.
De Bruyn, M., B. Stelbrink, R.J. Morley, R. Hall, G.R. Carvalho, C.H. Cannon, G. van den Bergh, E. Meijaard, et al. 2014. Borneo and Indochina are major evolutionary hotspots for Southeast Asian biodiversity. NCBI 63: 879–901.
Elsawah, S., T. Filatova, A. J. Jakeman, A. J. Kettner, M. L. Zellner, I. N. Athanasiadis, S. H. Hamilton, R. L. Axtell, et al. 2019. Eight grand challenges in socio-environmental systems modeling. Socio-Environmental Systems Modelling 2: 16226.
Epstein, J., and R. Axtell. 1996. Growing artificial societies. Social Science from the Bottom up. Washington: The Brookings Institution.
Fairhurst, T. 2009. Sustainable oil palm development on degraded land in Kalimantan. Semantic Scholar. Washington: World Wildlife Fund.
Farley, J., and R. Costanza. 2010. Payments for ecosystem services: From local to global. Ecological Economics 69: 2060–2068.
Fath, B.D., C.A. Dean, and H. Katzmair. 2015. Navigating the adaptive cycle: An approach to managing the resilience of social systems. Ecology and Society 20: 24.
Ferber, J. 1999. Multi-agent systems: An introduction to distributed artificial intelligence, 509. Harlow: Addison-Wesley Longman.
Filatova, T., P.H. Verburg, D.C. Parker, and C.A. Stannard. 2013. Spatial agent-based models for socio-ecological systems: Challenges and prospects. Environmental Modelling & Software 45: 1–7.
Forbes. 2018. Indonesia’s 50 Richest. Forbes [online]. Accessed October 2019, from https://www.forbes.com/indonesia-billionaires/list/#tab:overall.
Forest and Finance—Rainforest Action Network (RAN), TuK INDONESIA, and Profundo. 2016. Data [online]. Accessed April 2018, from http://forestsandfinance.org/.
Gilbert, N., P. Ahrweiler, P. Barbrook-Johnson, K.P. Narasimhan, and H. Wilkinson. 2018. Computational modelling of public policy: Reflections on practice. Journal of Artificial Societies and Social Simulation 21: 14.
Gingold, B., A. Rosenbarger, Y.I.K.D. Muliastra, F. Stolle, I.M. Sudana, M.D.M. Manessa, A. Murdimanto, S.B. Tiangga, et al. 2012. How to identify degraded land for sustainable palm oil in Indonesia. Working Paper. World Resources Institute and Sekala, Washington DC [online]. Accessed January 12, 2018, from http://data.wri.org/POTICO/English_how_to_identify_degraded_land_for_sustainable_palm_oil_in_indonesia.pdf.
GIZ—Deutsche GesellschaftfürInternationaleZusammenarbeit GmbH. 2016. Agriculture, Fisheries and Good [online]. Cited March 15, 2018, from https://www.giz.de/expertise/downloads/giz2014-en-pes.pdf.
Grimm, V., U. Berger, F. Bastiansen, S. Eliassen, V. Ginot, J. Giske, J. Goss-Custard, T. Grand, et al. 2006. A standard protocol for describing individual-based and agent-based models. Ecological Modelling 198: 115–126.
Grimm, V., U. Berger, D.L. DeAngelis, J.G. Polhill, J. Giske, S.F. Railsback. 2010. The ODD protocol: A review and first update. Ecological Modelling 221: 2760–2768.
Grimm, V., J. Augusiak, A. Focks, B.M. Frank, F. Gabsi, A.S.A. Johnston, C. Liu, B.J. Martin, et al. 2014. Towards better modelling and decision support: Documenting model development, testing, and analysis using TRACE. Ecological Modelling 2080: 129–139.
Haigh, N. 1998. Roundtable 4: Challenges and opportunities for IEA—Science–policy interactions from a policy perspective. Environmental Modelling and Assessment 3: 135–142.
Henders, S., U.M. Persson, and T. Kastner. 2015. Trading forests: Land-use change and carbon emissions embodied in production and exports of forest-risk commodities. Environmental Research Letters 10: 125012.
Hill, R. 2015. Why biodiversity is declining even as protected areas increase? Food Governance [online]. Cited May 21, 2018, from https://foodgovernance.com/2015/03/17/ro-hill-on-why-biodiversity-is-declining-even-as-protected-areas-increase/.
Hill, R., C. Miller, B. Newell, M. Dunlop, and I.J. Gordon. 2015. Why biodiversity declines as protected areas increase: The effect of the power of governance regimes on sustainable landscapes. Sustainability Science 10: 357–369.
Hirawan, F.B. 2011. The impact of palm oil plantations on Indonesia’s rural economy. In Agricultural development, trade and regional cooperation in developing East Asia, 66. Jakarta: ERIA.
Hopkin, J., and A. Rodriguez-Pose. 2017. Grabbing hand” or “helping hand”? Corruption and the economic role of the state. Governance 20: 187–208.
ICCT. 2016. International Council on Clean Transportation. Ecological Impacts of palm oil expansion in Indonesia. White Paper.
ICSU and ISSC. 2015. Review of the sustainable development goals: The science perspective. Paris: International Council for Science (ICSU).
Jackson, S. 2010. Architecting resilient systems: Accident avoidance and survival and recovery from disruptions, 7. Hoboken: Wiley.
Klasen, S., J. Priebe, and R. Rudolf. 2013. Cash crop choice and income dynamics in rural areas: Evidence for post-crisis Indonesia. Agricultural Economics 44: 349–364.
Klitgaard, K.A., and L. Krall. 2012. Ecological economics, degrowth, and institutional change. Ecological Economics 84: 247–253.
Koh, L.P., and J. Ghazoul. 2010. Spatially explicit scenario analysis for reconciling agricultural expansion, forest protection, and carbon conservation in Indonesia. Proceedings of the National academy of Sciences of the United States of America 107: 11140–11144.
Lang, C. 2010. Brazil: The double role of Norway in conserving and destroying the Amazon. REDD-Monitor [online]. Accessed February 25, 2018, from http://www.redd-monitor.org/2010/05/26/brazil-the-double-role-of-norway-in-conserving-and-destroying-the-amazon/.
Lang, C. 2017. After seven years, Norway’s US$1 billion REDD deal in Indonesia is still not stopping deforestation. REDD-Monitor [online]. Accessed March 15, 2018, from http://www.redd-monitor.org/2017/12/28/after-seven-years-norways-us1-billion-redd-deal-in-indonesia-is-still-not-stopping-deforestation/.
Lansing, J.S., and J.N. Kremer. 1993. Emergent properties of Balinese water temple networks: Coadaptation on a rugged fitness landscape. American Anthropologist 95: 97–114.
Laurance, W.F. 2018. Conservation and the global infrastructure tsunami: Disclose, debate, delay! Trends in Ecology & Evolution 33: 568–571.
Matthews, R.B., N.G. Gilbert, A. Roach, J.G. Polhill, and N.M. Gotts. 2007. Agent-based land-use models: A review of applications. Landscape Ecology 22: 1447–1459.
Murdiyarso, D., S. Dewi, D. Lawrence, and F. Seymour. 2011. Indonesia’s forest moratorium: A Stepping stone to better forest governance?. Bogor: Center for International Forestry Research.
Murray-Rust, D., V. Rieser, D.T. Robinson, V. Milicic, and M. Rounsevell. 2013. Agent-based modelling of land use dynamics and residential quality of life for future scenarios. Environmental Modelling & Software 46: 75–89.
OECD. 2016. Economic Surveys: Indonesia [online]. Accessed July 12, 2017, from https://www.oecd.org/eco/surveys/indonesia-2016-OECD-economic-survey-overview-english.pdf.
Paltseva, J., S. Searle, and C. Malins. 2016. Potential for advanced biofuel production from palm residues in Indonesia. Washington, DC: The International Council on Clean Transportation.
Polhill, J.G., A. Gimona, and R.J. Aspinall. 2011. Agent-based modelling of land use effects on ecosystem processes and services. Journal of Land Use Science 6: 75–81.
Polhill, J.G., J. Ge, M.P. Hare, K.B. Matthews, A. Gimona, D. Salt, and J. Yeluripati. 2019. Crossing the chasm: A ‘tube-map’ for agent-based social simulation of policy scenarios in spatially-distributed systems. GeoInformatica 23: 169–199.
Railsback, S.F., and V. Grimm. 2011. Agent-based and individual-based modelling: A practical introduction. Princeton: Princeton University Press.
Redfield, E. 1996. North Queensland’s tropical rainforests: The world heritage controversy. In Sustainable forestry challenges for developing countries, ed. M. Palo and G. Mery. Environmental Science and Technology Library, 10. Dordrecht: Springer.
Republic of Indonesia. 2016. Indonesia’s Intended Nationally Determined Contribution (INDC) [online]. Accessed August 16, 2017, from http://www4.unfccc.int/ndcregistry/PublishedDocuments/Indonesia%20First/First%20NDC%20Indonesia_submitted%20to%20UNFCCC%20Set_November%20%202016.pdf.
Ritter, F.E., M.J. Schoelles, K.S. Quigley, and L.C. Kelin. 2011. Determining the number of simulation runs: Treating simulations as theories by not sampling their behaviour. In Human-in-the-loop simulations: Methods and practice, ed. S. Narayanan and L. Rothrock, 97–116. London: Springer.
Ruysschaert, D., A. Darsoyo, R. Zen, G. Gunung, and I. Singleton. 2011. Developing palm-oil production on degraded land—Technical, economic, biodiversity, climate and policy implications [online]. Accessed September 19, 2017, from https://www.ifc.org/wps/wcm/connect/adf573004a682a88852cfdf998895a12/BACP-PanEco.Developing-degradedland-report.pdf?MOD=AJPERES.
Schulze, J., B. Muller, J. Groeneveld, and V. Grimm. 2017. Agent-Based modelling of social-ecological systems: Achievement, challenges, and a way forward. Journal of Artificial Societies and Social Simulation 20: 8.
Slik, J.W.F., S-I. Aiba, F.Q. Brearley, C.H. Cannon, O. Forshed, K. Kitayama, H. Nagamasu, R. Nilus, et al. 2010. Environmental correlates of tree biomass, basal area, wood specific gravity and stem density gradients in Borneo’s tropical forests. Global Ecology and Biogeography 19: 50–60.
Soares-Filho, B.S., D.C. Nepstad, L.M. Curran, G.C. Cerqueira, R.A. Garcia, C.A. Ramos, E. Voll, A. McDonald, et al. 2006. Modelling conservation in the Amazon basin. Nature 440: 520–523.
Sodhi, N.S., B.W. Brook, and C.J.A. Bradshaw. 2007. Tropical conservation biology. Oxford: Blackwell.
Symes, W.S., M. Rao, M.B. Mascia, and L.R. Carrasco. 2015. Why do we lose protected areas? Factors Influencing protected area downgrading, downsizing and degazettement in the tropics and subtropics. Global Change Biology 22: 656–665.
Ulanowicz, R.E., S.J. Goerner, B. Lietaer, and R. Gomez. 2009. Quantifying sustainability: Resilience, efficiency and the return of information theory. Ecological Complexity 6: 27–36.
UNDP (United Nations Development Program). 2015. Indonesia government addresses deforestation challenges in its aim to double palm oil production by 2020 [online]. Accessed February 19, 2018, from http://www.undp.org/content/undp/en/home/presscenter/pressreleases/2015/03/11/indonesia-government-addresses-deforestation-challenges-in-its-aim-to-double-palm-oil-production-by-2020.html.
UNEP (United Nations Environment Program). 2011. Green Economy Report, UNEP, Nairobi [online]. Accessed January 24, 2018, from www.unep.org/greeneconomy/greeneconomyreport/tabid/29846/default.aspx.
USDA (United States Department of Agriculture). 2014. Indonesia palm oil exports by year [online]. Accessed January 12, 2018, from http://www.indexmundi.com/agriculture/?country=id&commodity=palm-oil&graph=exports.
Verburg, P. 2006. Simulating feedbacks in land use and land cover change models. Landscape Ecology 21: 1171–1183.
Wilensky, U. 1999. NetLogo [computer software]. Center for Connected Learning and Computer-Based Modelling. Northwestern University, Evanston, IL [online]. Accessed October 2017, from http://ccl.northwestern.edu/netlogo.
Wilmar. 2017. Tropical oils plantations [online]. Accessed June 2017, from http://www.wilmar-international.com/our-business/tropical-oils/plantations/harvesting-oil-palm-yield/.
World Bank. 2018. Data—terrestrial protected area (% of total land area)—Indonesia [online]. Accessed October 2019, from https://data.worldbank.org/indicator/ER.LND.PTLD.ZS?locations=ID&view=chart.
Wunder, S., S. Engel, and S. Pagiola. 2008. Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries. Ecological Economics 65: 834–852.
Zen, Z., C. Barlow, and R. Gondowarsito. 2005. Oil palm in Indonesian socioeconomic improvement. A review of options. Working Paper. Australian National University, Canberra, Australia.
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.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Electronic supplementary material
Below is the link to the electronic supplementary material.
About this article
Cite this article
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
- Agent-based model
- Ecosystem services
- Palm oil
- Social–ecological system
- Sustainable development