Scientists discover how to make sustainable palm oil profitable

By Niamh Michail contact

- Last updated on GMT

"One way to save species and biodiversity threatened by agricultural expansion is to show companies the business case for conservation," says Prof. Brendan Fisher
"One way to save species and biodiversity threatened by agricultural expansion is to show companies the business case for conservation," says Prof. Brendan Fisher

Related tags: Sustainable palm oil, Palm oil, Agriculture

Scientists have found an ‘optimal point’ at which switching to sustainable palm oil production methods actually becomes profitable.

The researchers, who published their findings in the PNAS Journal​, said that they had shown companies the business case for conservation.

By analysing the opportunity costs of switching to eco-friendly cultivation methods, consumers’ willingness-to-pay (WTP) for a sustainable brand and the areas in which biodiversity could most easily be protected - such as secondary forests - the authors identified an optimal point at which conservation became profitable.

Co-author Brendan Fisher of the University of Vermont said: "This research shows how important it is for industry and scientists to work together and find potential win-win solutions -- or at least to mitigate the tradeoffs between conservation and agricultural production.

“It offers a model for aligning two huge, potentially opposing forces. One is the increasing demand for food, fibre and fuel products across the globe. The other is the absolute imperative to stop the loss of biodiversity from the planet."

As part of the study they conducted consumer research surveys, offering consumers common household products containing palm oil, one of which was certified sustainable.

They found that people would be willing to pay a conservation grade premium ranging from 15% to 56% more.

Such an aadded value price premium could be provided through a certification from internationally renowned accredited bodies such as the Roundtable on Sustainable Palm Oil (RSPO).

Combining all the data, they calculated that even in low-productivity regions, a 15% price premium could encourage a 32,000-hectare plantation to conserve up to 6,000 hectares.

Combining all of these findings together allows us to harness the power of the market and identify locations where cost-effective and even profitable conservation can take place,​” said Bateman.

The study

Collecting data from a 32,000-hectare palm oil plantation and the surrounding areas in Sumatra, Indonesia over a four-year period, the researchers estimated the probability of spotting endangered animals and calculated how this related to the way the land was distributed - primary forest, secondary forest, recently cleared land, palm nurseries and plantations.

Areas near existing forests were best for conservation, while fragmented ribbons of habitat were not.

They then analysed the company’s books and accounts in order to calculate the financial opportunity costs of conservation and finally determined consumers’ WTP.

The study'S findings have been lauded by the environmental NGO, the WWF. Senior conservation scientist Robin Naidoo said: "This research is critical because one fifth of the world's vertebrates are at imminent risk of extinction.

"Conversion to agriculture is resulting in the loss of tropical forests at an estimated rate of 13 million hectares each year.”

Palm oils are highly productive, producing more vegetable oil per hectare than any other oil-producing crop, meaning they are widely used in the food industry, as well as in cosmetics and for biofuels.

The WWF claims palm oil can be found in around 50% of processed food products, such as margarine, bread, ice-cream and baked products.

 

Source: PNAS Journal

First published online June 2015   DOI:10.1073/pnas.1406484112

Conserving tropical biodiversity via market forces and spatial targeting” 

Authors: Ian Bateman et al. 

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