The fiscal system may inadvertently increase deforestation
Indonesia’s palm oil sector has been making headlines recently because of the sector’s connection with fires from peatland conversion. Late last year, President Joko “Jokowi” Widodo announced a shift in peatland management, with policies designed to halt agricultural expansion into peat forests while facilitating the rehabilitation of already degraded peatlands.
Given the economic importance of palm oil, Indonesian policy makers, industry, and communities are looking for ways to grow the sector’s productivity without contributing to this deforestation and emissions.
This graphic, produced by Tim Varga and Angela Falconer, shows that of the nearly one billion USD the Indonesian government collects annually in tax revenues from palm oil, less than 15% goes to the regions that produce the crop.