Reconciling oil palm economic development and environmental conservation in Indonesia: A value chain dynamic approach

This study developed a model called the Indonesian Palm Oil Simulation (IPOS). This aims to understand the value chain of the palm oil industry. It provides options for policymakers and decision-makers about possible futures for the Indonesian palm oil industry at the national level. This model can also support communications among different stakeholders to determine a road map of palm oil development in Indonesia. This paper discusses three aspects of the model: (1) the structure of the palm oil industry; (2) the palm oil value chain at the national level; and (3) scenarios related to national-level policies, such as: (a) the moratorium on oil palm expansion as stated in Presidential Instruction No. 8 of 2018; (b) peat protection as stated in Government Regulation No. 57 of 2016; (c) agrarian reform; and (d) land and forest fires. This paper aims to contribute to the debate around national oil palm and palm oil policies and their implications for smallholder incomes and carbon emissions.