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Palm oil forests good for business, bad for the planet

The Adam Smith Institute has stepped in to the palm oil plantation debate with an astonishing report suggesting that bio-fuels should be welcomed by those concerned about the planet’s future.

In what amounts to a press release on behalf of the multi-million dollar Malaysian palm oil industry, the institute claims that bio-fuels can replace fossil fuels to keep the wheels of industry turning.

But whatever these free booting, free marketeers claim, the reality is that the development of the bio-fuel industry is a potential disaster for the eco-system, including human beings.

Far from being a way of reducing greenhouse emissions, this profit-driven agri-business is increasing them. Every hectare of primary rainforest cleared and replaced with oil palms releases around 65 times as much carbon into the atmosphere as can be saved annually by using the palm oil as a biofuel.

The clearing of forests to plant palm oil is itself a major source of emissions. It is estimated that up to 15% of all global CO2 emissions come from Indonesia's peat fires when the forest substructure starts to burn. Satellite images have shown that 75% of the fire hotspots are on plantation land, which largely grow palm oil.

The Malay peninsula produces more than ten million tonnes of palm oil per year, over half of the world's supply. In the last 30 years, palm oil has grown to be the second biggest vegetable oil behind soybean, and increasing demand will soon put it in first place.

Malaysian estates yield up to 5 tonnes of oil per hectare every year, more than double the yield of any other oil crop under intensive cultivation. This is done through effective plant breeding but also by heavy application of pesticides and fertiliser – made from oil!

And just as with any other intensively-farmed crop, biodiversity is reduced throughout the area of cultivation.

The Adam Smith Institute report focuses a great deal on campaigns to save the orangutan from extinction in its last fastnesses of Borneo and Sumatra.

They make the astonishing claim that the campaign is misplaced in the case of Malaysia, as there are no orangutans in the main palm oil producing areas on the Malay peninsula.

This is a typical neo-classical economic argument, where everything is taken out of both its historic and economic context and viewed in isolation. Because if there are no orang-utans in those areas, it is because they have already been wiped out – they were formerly common.

In fact, there are orangutans in the Malaysian provinces on the island of Borneo and the government helps fund a rescue centre for those displaced by forest clearing. And on the Indonesian part of the island, a whole eco-system of unique plants and animals are under threat.

Why is the ASI rushing to the defence of palm oil interests? Could it be because this is the fastest growing, most potentially profitable commodity in the capitalist marketplace? The biodiesel and ethanol markets could be worth as much as $247 billion by 2020, up from $76 billion in 2010.

Not only palm oil, but the pushing of so-called marginal lands into intensive growing of plants to provide ‘bio-mass’ for burning, is driving the planet towards some dangerous tipping points in terms of sustainable bio-diversity – as well as increasing greenhouse gas emissions.

Only a system as reckless as capitalism could respond to the existential crises of climate change and peak oil with a profit-driven business initiative that will make the situation even worse.

As a certain Adam Smith once said of the capitalist system whose early days he was recording:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.

At Saturday’s Beyond Resistance teach-in – Kicking Capitalism’s Growth Habit – we will be discussing how we can stop addressing ourselves to the butcher, and instead bring about democratic control of resources, and urgent responses to climate change that will tackle the problem, not just boost markets and profit at our and the planet’s expense.

Penny Cole
Environment editor
24 February 2011

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