LAND-USE CHANGE AND EMISSIONS FROM TROPICAL AND TEMPERATE PEATLANDS

Abstract

Greenhouse gas (GHG) emissions arising from palm oil plantations have become a major issue in the fight against climate change in recent years. This paper attempts to quantify and monetise GHG emissions arising directly from the drainage and burning of peatlands and explores alternative species that do not require drainage. The World Bank has estimated that the forest fires in Indonesia in 2015 had cost its economy about US$ 16 billion. This cost includes the impacts to environment, agriculture, trade, tourism, forestry and transportation. In this paper, over a 25-year cycle, from 2020 to 2040, it can be estimated that carbon emissions resulting from drainage and fires in tropical peatlands on oil palm plantation of 1.3 million hectares could amount to about 3.6 billion tonnes CO2eq by end of 2040. Emissions arising from drainage alone could account for 3.25 billion tonnes CO2eq by 2040. The carbon cost from drainage and fires could amount to about US$ 47 billion. Drainage alone could cost US$ 42 billion. The revenues from oil palm plantations on peatlands in Indonesia are significantly overstated without accounting for carbon costs that could amount to between US$ 43-46 billion over a 25-year period till the year 2040; or about US$1.76 billion per year. Over the same time period, it can be estimated that methane emissions resulting from drainage and fires on celery plantations on temperate peatlands of about 4285 hectares could amount to about 2 million tonnes CO2eq by end of 2040. Emissions arising from drainage alone could amount to about 107 tonnes CO2eq. By the end of 2040, it can be estimated that methane emissions cost resulting from drainage and burning of peatlands on celery plantations could amount to about US$ 30 million over a 25-year period. The revenues for celery plantations on temperate peatlands of about 4285 hectares with drainage and fires are slightly overstated without accounting for costs of methane emissions that could amount to about US$ 0.03 billion over a 25-year period till the year 2040. However, calculations in this paper have shown that other sustainable agricultural crops such as sago palm seem to be more profitable than palm oil plantations with drainage and fires over the long term, raking in more revenue in the range of US$ 15-45 billion over a 25-year period. This paper shall provide a basis for further economic quantification studies to be conducted on GHG emissions arising from peatlands and revenue generation models for alternative crop species.