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

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. Her...

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Bibliographic Details
Published inAnnual review of resource economics Vol. 12; no. 1; pp. 321 - 344
Main Authors Qaim, Matin, Sibhatu, Kibrom T, Siregar, Hermanto, Grass, Ingo
Format Journal Article
LanguageEnglish
Published Palo Alto Annual Reviews 06.10.2020
Annual Reviews, Inc
Subjects
biodiversity
climate change
Consumption
deforestation
Economic development
Environmental impact
Indonesia
JEL O13
JEL Q01
JEL Q12
JEL Q15
poverty
smallholder farmers
Sustainability
Vegetable oils
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Summary: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.
ISSN:1941-1340
1941-1359
DOI:10.1146/annurev-resource-110119-024922