How giving cash to poor families may also save trees in Indonesia

Last year marked the third
year in a row of when Indonesia’s bleak rate of deforestation has slowed in
pace. One reason for the turnaround may be the country’s antipoverty
program. That initiative is associated with a 30 percent reduction in tree cover loss in villages, researchers report June 12 in Science Advances.

In 2007, Indonesia started phasing
in a program that gives money to its poorest residents under certain conditions,
such as requiring people to keep kids in school or get regular medical care. Called
conditional cash transfers or CCTs, these social assistance programs are designed
to reduce inequality and break the cycle of poverty. They’re already used in dozens
of countries worldwide. In Indonesia, the program has provided enough food and
medicine to substantially reduce severe growth problems among children.

But CCT programs don’t
generally consider effects on the environment. In fact, poverty alleviation and
environmental protection are often viewed as conflicting goals, says Paul
Ferraro, an economist and behavioral scientist at Johns Hopkins University.

That’s because economic
growth can be correlated with environmental degradation, while protecting the
environment is sometimes correlated with greater poverty. However, those
correlations don’t prove cause and effect. The only previous study
analyzing causality, based on an area in Mexico that had instituted CCTs, supported
the traditional view. There, as people got more money, some of them may have
more cleared land for cattle to raise for meat, Ferraro says.

Such programs do not have to
negatively affect the environment, though. Ferraro and Rhita Simorangkir, an
applied microeconomist at the National University of Singapore, wanted to see
if Indonesia’s poverty-alleviation program was affecting deforestation. Indonesia
has the third-largest area of tropical forest in the world and one of the
highest deforestation rates, especially of primary forests — undisturbed,
mature tropical forests that are important for biodiversity
and carbon storage,
among other benefits (SN: 6/9/20; SN:

One of the biggest drivers of deforestation in Kalimantan (shown) on the Indonesian portion of the island of Borneo is clearing land for palm oil plantations. But deforestation in Kalimantan has been slowing in recent years.Mahastra Wibisono

Ferraro and Simorangkir analyzed
satellite data showing annual forest loss from 2008 to 2012 — including during Indonesia’s
phase-in of the antipoverty program — in 7,468 forested villages across 15
provinces and multiple islands. The duo separated the effects of the CCT program
on forest loss from other factors, like weather and macroeconomic changes, which
were also affecting forest loss. With that, “we see that the program is
associated with a 30 percent reduction in deforestation,” Ferraro says. “And
half or more [of that reduction] is coming from primary forests.”      

If improving a family’s or a
village’s lot in life also means protecting the environment, it would be a
“great win-win — you can solve two problems at once,” says Jonah Busch, an
environmental economist at the Earth Innovation Institute in San Francisco, who
was not involved in the new study. Ferraro and Simorangkir present “good
evidence” that, at least in rural villages in Indonesia, giving people a
helping hand helps them cut down fewer trees, Busch says.

That’s likely because the
rural poor are using the money as makeshift insurance policies against
inclement weather, Ferraro says. Typically, if rains are delayed, people may
clear land to plant more rice to supplement their harvests, he says. With the
CCTs, individuals instead can use the money to supplement their harvests

Whether this research
translates elsewhere is anybody’s guess. “This is much closer to the first word
than the last word on the topic,” Busch says. “I hope we’ll see more of this
type of research.” Unlike the Mexico study that found increased deforestation
with wealth, this one shows less, he says, and “it’s totally possible that’s
the case in both places.” Unfortunately, neither suggests what might happen in
the Congo or elsewhere, he says, because there are just too many local factors.

Ferraro and Simorangkir
suggest their results may transfer to other parts of Asia, due to commonalities
such as the importance of growing rice and market access. And regardless of
transferability, the study shows that what’s good for people may also be good
for the environment, Ferraro says. Even if this program didn’t reduce poverty,
he says, “the value of the avoided deforestation just for carbon dioxide
emissions alone is more than the program costs.”

People often think of
environmental protection as a moral objective, rather than an economic
objective, Ferraro says. “But just on economics, this intervention would make

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