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Palm oil: Pros and cons

February 19, 2010

Palm oil may be a booming global commodity. But economists and environmentalists remain sharply divided over whether the oil helps slow global warming or is in fact a major climate killer.

A pan containing cooking oil
Simmering controversy - palm oil sparks sharp reactionsImage: cc/Apreche

Palm oil can help fight poverty

Alan Oxley from the non-governmental organization World Growth says palm oil is a particularly sustainable and climate-friendly product. It generates nearly ten times the energy that it consumes.

The oil palm trees also have an extraordinarily high oil yield - as much as up to six tons of oil per hectare each year. It's estimated that the same oil output from rapeseed or soya would require ten times the acreage.

World Growth presented a report at the UN climate summit in Copenhagen that said palm oil production contributed to reducing poverty in developing countries. Palm oil can generate returns of over $3,000 per hectare whereas conventional agriculture earns less than $100.

The International Fund for Agricultural Development (IFAD) is financing a project in Uganda to examine the effectiveness of palm oil in combating poverty.

Economists such as Tim Wilson from the Institute of Public Affairs in Melbourne, Australia believe that climate activists take a narrow view of deforestation.

"It's not the oil palm that destroys the rain forest but poverty," Wilson says. The economist points out that it's necessary to get to the roots of the problem if precious rain forest cover is to be protected.

He says that if it weren't for the demand for palm oil, farmers would plant other products that would gobble up more land and thus prove more destructive to rainforests and the climate.

Studies say that between 50 and 70 percent of forest clearance in Indonesia is carried out by small farmers to sustain themselves - and not by agricultural giants for vast oil palm plantations.

Experts say that palm oil boycotts, favored by climate activists, would thus have disastrous consequences for the people who live near the plantations as well as for the rainforest and the environment.

Palm oil is a climate killer

Greenpeace estimates that in Indonesia alone, rainforest cover corresponding to the size of around five football fields disappears every single minute. And studies say booming palm oil production is largely to blame for it.  

Groups such as Greenpeace or Save the Rainforest have documented how rainforests are being eroded a rapid pace to make way for oil palm plantations. That makes palm oil a major climate killer.

Peat land, believed to be reservoirs of huge amounts of carbon, is also being burned and cleared for oil palm plantations. That makes the carbon footprint of a liter of biodiesel up to 2,000 times worse than a liter of conventional fossil-based fuel.

A steadily growing palm oil monoculture is also destroying biodiversity and contaminating the earth with large amounts of pesticide and manure.

Environment experts say that certifying palm oil amounts to nothing more than "greenwashing" because large agricultural companies and local corruption have an easy time dodging the sustainable standards laid down by the certification.

They point out that the oil palm plantations aren't just causing environmental problems but also social upheaval. Environment group Walhi has documented hundreds of conflicts between local communities and palm oil producers on the island of Sumatra in Indonesia.

In Columbia, tens of thousands of people are said to have been forcibly removed from their lands to make way for large-scale oil palm plantations. International human rights groups as well as organizations in Columbia say the palm oil industry is closely linked with the paramilitaries and drug barons in Columbia.

They say that drug money is laundered by investing it in the plantations.

In addition, a study by the World Bank in 2008 showed that greenhouse gas emissions from food plants are responsible for 75 percent of the worldwide rise in prices of food.

In Indonesia, the price of basic food has soared sharply in the wake of the boom in palm oil production.

Author: Oliver Samson (sp)

Editor: Jennifer Abramsohn