Helping the poor can protect forests too, Indonesian welfare program shows

Helping-the-poor-can-protect-forests-too-Indonesian-welfare-program-shows-5 A group of farmers going into a rice field in Central Java. (Photo: Dika Soul Seva/Flickr)

Source: Mongabay
Date: 4 August 2020

  • A study has found that a poverty-alleviation program in Indonesia was just as successful as dedicated conservation programs in reducing deforestation.
  • The researchers attribute this to the program serving as a sort of insurance against harvest failures, by guaranteeing rural communities cash transfers and making it less likely they will cut down forests as a source of income.
  • The study calculates that the economic benefit from the avoided carbon emissions alone could be (at maximum) 10 times greater than the cost of administering the program.
  • The researchers have called for similar studies to be done in other tropical rainforest countries, and insist that poverty alleviation and forest conservation aren't mutually exclusive goals.

Lifting people out of poverty in Indonesia has also helped slow the country's rate of deforestation, a new study finds.

The study looked for links between deforestation data and a government poverty-alleviation program launched in 2007 and known as PKH — at the time the biggest of its kind in the world.

"If we look at the countries with vast rainforests, they're developing or middle-income countries. Just based on that, the correlation is very clear," Rhita Simorangkir, a researcher at the National University of Singapore (NUS) and one of the authors of the study published in Science Advances, told Mongabay. "We already know the correlation, but we wanted to find the direction of the causation. We do not have enough evidence whether if we alleviated poverty, it had a negative impact [on the forest] or not.

"So this is an ideal setting for us researchers to see the effect of a poverty alleviation program on the environment", she added.

Nearly 10% of Indonesia's population lives below the poverty line. Under the PKH program, eligible households receive cash by taking specific health- or education-related actions, a concept known as conditional cash transfers.

The program was launched during the same period that Indonesia's carbon-rich rainforests were disappearing at an alarming rate to make way for oil palm plantations and other monocrops. The country lost more than 6 million hectares (15 million acres) of natural forest between 2000 and 2012; by the end of that period, Indonesia's annual deforestation rate had surpassed Brazil's for the first time.

Rhita and her co-author, Paul Ferraro from Johns Hopkins University, began their research five years ago. They analyzed 7,468 rural forested villages across 15 provinces that participated in the PKH program between 2008 and 2012. They found that the program, despite not being designed to benefit the environment, resulted in the reduction of forest cover loss in those participating villages by an average of 30%.

Nearly half of the reduction came from primary forest.

The researchers noted that the effect of the PKH program in reducing deforestation is comparable with programs designed explicitly to reduce deforestation. Those latter programs, however, often fall short of alleviating poverty.

"What's most surprising is the effect is roughly similar to the size of the effects that people have estimated for explicit conservation projects," Ferraro said as quoted by PRI. "Like national parks or payments conditional on protecting the environment."

Farmers work a potato farm near a geothermal plant on the Dieng Plateau, on the Indonesian island of Java. (Photo: Raditya Mahendra Yasa/Flickr)

Insurance for hard times

"So during these five years, we're trying to isolate the effect [of the PKH program on reduced deforestation]. That's the difficult part," Rhita said. "We did a lot of tests to see if the results were robust or not, because there could be other factors that decrease both" poverty and deforestation.

After removing other factors from the equation, the study found that the cash transfer program was most effective at reducing deforestation in years when a village experienced negative rainfall shocks and in communities with better access to markets.

The unintended benefit is likely because poor farmers are less inclined to clear forests when they receive funds, even though the PKH program doesn't include protection of the environment as a requirement for fund recipients.

What it does, instead, is provide ease of mind for impoverished farmers during hard times, with guaranteed cash transfers quarterly for between six and nine years. These cash transfers make up 15 to 20% of recipients' consumption, according to the World Bank.

Having this guarantee is especially crucial during times when farmers suffer from losses due to a late rainy season.

"So about 80% of our village sample indicate that agriculture is their main source of income," Rhita said. "When there's no rain at the beginning of the planting season, the harvest declines. The villages that suffer from delayed rain reduce their deforestation more when they have conditional cash transfers. So the PKH program serves as insurance."

The cash transfers also push poor households to use their money to buy goods from the market rather than relying on deforestation-sourced goods.

The researchers also noted the benefits the reduction in deforestation from the PKH program had on climate change through avoided CO2 emissions. Those economic benefits alone could be 10 times greater than the costs of implementing the PKH program, they calculated — as long as the recipients protected their forests permanently, even after the end of the cash transfer program.

If, however, they immediately cleared their forests after the PKH program (assuming every village received cash transfers for the full nine years), then the benefit-to-cost ratio would be roughly even.

"We're just measuring [the benefits] from above-ground biomass, but the benefit is already favorable compared to the cost," Rhita said. "We haven't included the benefit of biodiversity and hydrology."

Deforestation in Borneo. (Image: Rhett A. Butler/Mongabay)

Future studies

Ferraro said that while fighting poverty and protecting the environment are often seen as conflicting priorities, this study indicates that that doesn't have to be the case.

"These debates come from those different groups who believe that it's a zero-sum game, that if money goes to anti-poverty, that's at the expense of the environment or if money goes to the environment, that's at the expense of reducing poverty," he said. "We hope that our study gives people some hope that these twin goals that we have globally don't necessarily need to be at odds."

To get more conclusive results, the study in Indonesia would need to be replicated in other countries that have different contexts, the researchers said.

Rhita said she knew of only one other study looking at the impact of a similar poverty-alleviation program on deforestation using a rigorous methodology. That was carried out in Mexico in 2013 and found that cash transfers to alleviate poverty resulted in increased deforestation. The study's authors concluded it was likely because when given more cash, people could afford more beef, and so they cleared more land for cattle pasture.

The study in Indonesia used a different methodology with more rigorous robustness tests compared to the one in Mexico, that might also contributed to the difference in results. What happened in Mexico "likely won't happen in Indonesia because we mostly import our beef and we don't have a big cattle ranching [industry] like those in Latin America," Rhita said. In Indonesia, the major driver of deforestation is the clearing of land for plantations, mostly oil palm and rubber, she said. "That's why we need evidence from other countries with different context," she added.

Rhita said ideally the same methodology should be applied in countries like the Democratic Republic of Congo and Cambodia, both of which are rich in rainforests but face a deforestation problem.

"But the problem for third world countries is the availability of data," Rhita said. "We already looked at Cambodia but the data isn't available. While we can find deforestation data from satellites, the problem is the data for the [poverty alleviation] program itself — we couldn't find the data."

Deforestation in Borneo. (Image: Rhett A. Butler/Mongabay)

COVID-19 concerns

Rhita said it's paramount to have a social safety net in place now, as restrictions imposed in response to the COVID-19 pandemic choke Indonesia's economic activity.

"It's true that during a pandemic, the economy is slowing down and people lose jobs and don't have money, and thus they go back to deforesting" to make money she said. "That's why a social safety net is more important than ever. Besides alleviating poverty, it also helps people to not deforest."

A study by the German chapter of WWF shows that the deforestation rate in Indonesia climbed in the first three months of this year. The study, which analyzed satellite data from 18 countries compiled by the University of Maryland, shows Indonesia lost the most forest area, at more than 130,000 hectares (321,000 acres), a 130% increase over the average deforestation rate in the first three months of 2017-2019.

WWF says there's ample evidence to suggest the increase is fueled by the COVID-19 pandemic, with illegal loggers taking advantage of physical distancing measures scaling back forest patrols.

The virus has also prompted massive job losses in many countries, leaving many newly unemployed people increasingly desperate for sources of income. Many have left the cities and returned to their home villages and are cutting down trees for firewood or a source of income.

"This WWF report emphasized that forests serve as an insurance," Rhita said. "So when the poorest are given money, they don't need to deforest."

Fitrian Ardiansyah, the Indonesia country director at the Sustainable Trade Initiative (IDH), said providing a good alternative form of livelihood could also help people to not clear forests even during an economic crisis.

"Village forests in West Kalimantan province have shown that if you can provide a good business model and economic return to local communities, they will gladly help protect the remaining forests and even reforest," he said. "They manage to regenerate and restore 500 hectares [1,240 acres of forests]. Within this pandemic, we see that as long as you can provide options for their products, linking to market and financiers, they're still committed to protect forests."


Ferraro, P. J., & Simorangkir, R. (2020). Conditional cash transfers to alleviate poverty also reduced deforestation in Indonesia. Science Advances, 6(24), eaaz1298. doi:10.1126/sciadv.aaz1298

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