The trillion-dollar gamble on Borneo

The mythical island is slowly dying. It’s going to take more than a village to save it.

The trillion-dollar gamble on Borneo

Sustainability is among the more popular buzzwords in modernday politics. Many still use it in reference to sustainable development and its various cousins of green development, green growth, sustainable agriculture and ecological economics. But does anyone actually know what sustainability really means?

Somehow, the objectives of sustainable economic and social development need to be achieved while preventing major environmental losses. How you practically do that is a question few would know how to answer. We explore this tricky question on the island of Borneo, where the three of us have now studied sustainability for a combined 50 years.

An island of many virtues

Borneo is among the most important regions in the world for environmental conservation. It is one of the most species-rich places on earth, and thousands of species of plants and animals on Borneo occur nowhere else. In fact, it is right at the center of Southeast Asian species diversification. Nearly half of all species groups in the region first evolved there before spreading out across the region. Along the emerald chain of islands that make up the Malay Archipelago, Borneo stands out as the bubbling cauldron of evolutionary diversification. Obviously, its people have something to be truly proud of.

But there is more to Borneo. The island has a long history of human use, with its many arterial rivers providing access to a treasure chest of riches. It is endowed with significant oil, gas, coal and mineral resources. Its forests are more densely stocked with high-quality timber than the tropical forests of Africa and South America. They are also a rich source of a bewildering variety of plants, fungi, fruits and other non-timber products used by its people. But the warm and wet climate is not only an ideal place for biological diversity. It is also good for fast-growing crops such as oil palm and rubber that the world’s consumers are eager to buy. And here lies the main challenge for Borneo: to what extent can its natural and diverse productive forests be replaced with more intensively managed crops? We know the benefits of removing forests, but do we know the costs? In this essay, we explore the costs and benefits of deforestation to assess the risks of different future land-use scenarios. Politicians, pay attention; this story will tell you most of what we know about the opportunities and pitfalls of sustainable development. What mistakes should be avoided and what golden rules could be followed so that everyone benefits from Borneo’s future.

Environmental and human history

Let’s take a step back in time. Borneo is part of the old geological core of mainland Southeast Asia. Islands such as Java and Sumatra are relative newcomers in geological time – they still consisted of a chain of individual islands a few million years ago. The Borneo landmass, on the other hand, has been around for tens of millions of years. It was once connected with what is now the Malay and Thai peninsula, but broke away to become an island some five to 10 million years ago.

We don’t know much about the early humans who travelled through Borneo. Homo erectus was on Java one million years ago and may well have traversed the Bornean woodlands too, but we don’t have the fossils to prove that. Similarly, the ancestors of the diminutive hobbit Homo floresiensis, found on Flores island, could have had its tiny feet on Bornean soil at some stage.

Concrete evidence of people in Borneo, however, only dates back to around 45,000 years ago, when people lived in cave systems. They left incredibly beautiful artwork, such as the cave paintings in the Mangkalihat Karst area in Indonesian Borneo’s East Kalimantan Province. These people already had a taste for Bornean wildlife. It was around this time that they hunted the giant pangolin of Borneo to extinction. They also had a major impact on some large orangutan populations that were exterminated thousands of years ago because of overhunting. Initially, such hunting would have happened with spear and bow and arrow, but when the blowpipe and its poison darts came in, these hunters became even more effective as they were able to kill arboreal species from a distance.

The cultures that developed from this close association with Borneo’s evergreen environments depended strongly on reading and interpreting the signs and sounds of the forest. Many people were adept at recognizing bird species and their calls, and used these signs from the forest to inform their decisions: when to plant rice, where to find wildlife, when to organize a wedding or where and when to engage in the headhunting raids that took place until the late 19th century.

These cultures thrived on the commercial exploitation of Borneo’s natural resources. Rhino horn, edible swiftlet nests, damar, gaharu and other valuable resources had been harvested and traded as far as China for thousands of years. The Martadipura Hindu kingdom that dominated much of East Kalimantan around the 4th century likely gained its wealth and prominence from taxing this trade in forest products.

When the English and Dutch colonial rulers started to exploit the island, trade shifted to other products such as camphor, rattan, certain timber species, pepper and also wildlife specimens. By this time, large parts of Borneo had been settled, mostly along the main rivers, and there were in fact more villages in the interior of the island than there are now. Contrary to popular belief, the indigenous people did not live in balanced harmony with their natural environment, and their agricultural and related fire-stick activities resulted in significant deforestation. Land cover maps show that in the 1930s, up to 25 percent of Borneo was already deforested, especially in West Borneo.

Only in the 1960s, however, did economic development of Borneo’s natural resources take on its current industrial-scale character. Starting in Malaysian Sabah, the introduction of chain saws and motorized transportation allowed for the first time the effective exploitation of large areas of interior forest. Compared to similar forests in the African and South American tropics, Borneo’s lowland forest had far higher densities of commercially valuable timber species that could be easily floated in rafts down to coastal ports. Once people worked out how to exploit this green gold, deforestation advanced rapidly and large riches were accumulated by those in a position to benefit. At the height of the timber boom, the Sabah town of Sandakan, through which most Malaysian timber was exported, boasted that it had the highest concentration of millionaires anywhere on earth.

Obviously, it didn’t take long for the other parts of Borneo to join the timber boom. Industrial-scale exploitation in Indonesian Borneo, or Kalimantan, really took off in the 1970s, first by international companies, but after the government nationalized the industry, Indonesian timber barons started to accumulate their wealth.

There is a problem with unchecked exploitation of these tropical forests. Most commercially valuable trees are hundreds of years old. After cutting down such trees it takes at least 50 to 100 years for something resembling the original forest to grow back. As long as people viewed Borneo’s forests as a limitless resource, this didn’t seem to be a problem. However, we have now reached a stage where most forests have been exploited once, twice or even more, and will not recover easily from this overexploitation. In our current world, in which the movement of money, goods, people and ideas is still accelerating, no one wants to wait for decades for a resource to renew itself, and faster profits are demanded.

This need for speed in forest management resulted in the initial replacement of slowgrowing tropical trees by fast-growing nonnative ones. Pine, acacia and eucalyptus trees were planted for their potential to rapidly produce timber for the pulp and paper and other wood industries. Trees or their products could be harvested within less than 10 years after planting. This appeared to be a major improvement compared to the slow tree growth in natural forests.

One particular plant, however, was to have an even bigger impact on Borneo. In 1848, the Dutch brought four specimens of a funnylooking palm to the island of Java. These trees were sitting in a botanical garden for decades without anyone realizing how profoundly they would change the face of Borneo and other parts of Southeast Asia. It was the African oil palm tree, reviled by many, but loved by even more.

Oil palm was even better than other fastgrowing tree species. It only took three years after planting before the first seeds could be harvested and the valuable oil extracted. The oil palm produces oil more efficiently than any other oil crop in the world: soy, maize, peanut, rapeseed – you name it – and generates far higher revenues.

Again, Sabah was the first on the scene. The state licensed the clear-cutting of large areas of overlogged lowland forests and their rich wildlife, and replaced these with monocultures of oil palm. The other Malaysian state, Sarawak, followed swiftly, and in the has been allocated to oil palm development, an area roughly the size of Greece. Only 36 percent of these areas allocated to oil palm have, however, been planted, the remainder being forests and smallholder agricultural and contested nonforest lands.

The new age of intensive land-use

The introduction of monocultures fundamentally changed the map of Borneo in a way that, if you happened to be in a space station, you could spot with the naked eye. Whereas to the earliest astronauts of the 1960s, Borneo would have appeared a largely green landscape often obscured by thick clouds, the crews of the present International Space Station or the Tiangong-2 are more likely to see a brown and greenish island, frequently with long smoke and haze plumes wafting toward Singapore and Malaysia.

Currently, some 45 percent of this vast island remains forested, mostly in the island’s mountainous interior. These interior forests are still fairly inaccessible and either protected for wildlife conservation and critical watershed services, or they have been allocated to selective timber harvest. More and more of these timber concessions, however, are going out of business. Companies are finding it increasingly hard to make a profit because of decades of overexploitation of timber stocks. The demise of the timber industry leaves politicians with two stark choices: either they leave these degraded natural forests to regenerate until some future when commercial harvest is once again possible, or they cut them down and replace them with something that grows faster and generates profits more quickly.

The most hated and most loved palm

No discussion of Borneo’s environment can ignore the oil palm. This African palm species has generated more emotion than any other plant species. Just mentioning its name leaves many environmentalists foaming at the mouth. Politicians, oil palm growers and palm oil buyers, and many consumers, love the oil for its low costs, high yields and many-faceted uses, varying from fuel for cars to margarine, toothpaste and lipstick. Unfortunately, the resulting polarized debate – “you are either with us or against us” – has hampered constructive dialogue about how to reconcile the considerable economic potential of this tropical crop with its potentially large environmental and social costs.

Undoubtedly, if you want to generate income quickly from a piece of tropical land, oil palm is a good choice. The governments of Indonesia and Malaysia, the world’s largest palm oil producers, promote oil palm development as key to economic development and poverty alleviation. In Sabah, for example, oil palm is the greatest contributor to the state’s gross domestic product. In Indonesia, oil palm contributes about 2 percent to the national GDP. Despite its economic importance, however, it appears from recent Indonesian government data that the poverty alleviation benefits often attributed to oil palm are overstated. Only in one of the five provinces in Kalimantan has poverty decreased with increased area planted with oil palm, and overall in Kalimantan, the more oil palm planted per district, the higher the levels of poverty.

One reason why oil palm’s positive impact on poverty is limited is that the industry’s benefits are not equitably distributed. Those who profit most are the owners and financiers of oil palm companies. In theory, smallholders can also benefit. Starting an oil palm

plantation, however, even if small, requires access to investment capital, which is often out of reach for the poor and landless. As few of these marginalized people can start their own plantations, they will either sell their land (if they have informal or formal land claims) to bigger buyers, or enter partnerships with larger groups to exploit their lands. They could find employment in oil palm companies, but this doesn’t pay particularly well, and often the manual labor is done by outsiders. Most oil palm workers in Malaysian companies are from Indonesia, the Philippines and increasingly from Bangladesh. Many workers in Kalimantan’s companies are from even poorer parts of Indonesia.

Of course, oil palm development brings other benefits, with, for example, better roads improving access to markets, health facilities and schools. Problematically, however, it is the poorest people who benefit least from these developments. These people often use forests as fall-back resources. When times are bad, harvests from their lands have failed or commodity prices are low, these people still have access to free fish, deer, pigs, rattan, medicinal plants and a wide range of other products available as long as the forest stands. Once the forest has been replaced by oil palm, this option no longer exists and people realize what they have lost. Such perceptions of unfair treatment result in the many social conflicts with which the oil palm industry is often associated. When people think they lose more than they gain, they get angry.

The overlooked sector

The largest land user on Borneo is not oil palm, timber concessions or pulp and paper plantations, but is the so-called smallholder. Among conservation organizations, there is a common belief that small is good and large is bad, with small often associated with “traditional,” “indigenous” and low, localized impact, and large with capitalist outsiders destroying Borneo’s nature. Such distinctions, however, are not supported by data. Smallholders, for example, appear to be a bigger source of fires than holders of large amounts of land. Even though individual smallholders manage relatively small patches of land, their cumulative environmental impact is as large as that of large landowners. Some powerful large landowners are indigenous, and many smallholders originate from the islands of Java, Sumatra, Madura and Sulawesi. All are trying to make a living from the natural resources of Borneo, and all have to be part of the development of solutions. Images of noble savages living in harmony with nature are not helpful in the search for more sustainable ways to manage the land and natural resources. There has to be recognition that most people in Borneo are currently impacting the environment and wildlife, and that everyone has a role in addressing this challenge.

As we recently argued in this journal, the role of rural and indigenous communities in managing Borneo’s resources needs to be carefully explored. Following Indonesia’s recent Constitutional Court decision to grant forest-use and ownership rights to indigenous communities, there has been rapid development of policy initiatives to reallocate large parts of Indonesia’s forests from state to community ownership and management. In terms of rights, this is fully justified, but in terms of other objectives such as reduced poverty and reduced environmental impact, these initiatives require careful consideration.

One key challenge is that many communities in Borneo do not yet operate along democratic principles. Decision-making power is often in the hands of a small local “elite” that then decides what is right or wrong for the community (or for themselves). If communities are lucky, they will benefit from their newly acquired rights, but if village elites sell land to industries that end up converting forests, the poorest and least connected community members may lose rather than gain from these developments. All this requires careful consideration. Decreasing poverty rates in rural areas should be a cornerstone of any sustainable development plan, but it remains unclear to what extent rural communities would be helped by the current rapid transfer of land rights and deforestation risks. Raising rural incomes first requires a stable land base, clear land ownership rights and registration system, good village governance and no further uncontrolled industrial-scale plantation expansion.

When nature bites back

As Isaac Newton once said, every action has an equal reaction. So it is with deforestation. The reason why much of Borneo’s forests have been cut down is that most people think that once forests have lost their commercial timber value they are not worth much anymore. This is not true. The value of tropical forests has been estimated at about $5,000 per hectare per year. This includes freely available products such as bushmeat and clean water, regulating services such as climate regulation, flood buffering, erosion prevention and pollination, and cultural services such as spiritual experiences or recreation. This indicates that the remaining forests on Borneo generate a non-timber value of some $205 billion every year. That is more than the annual GDP of the entire island, which is about $135 billion. So something is missing from the equation. Forests produce value that does not end up in the economic accounts of Indonesia, Malaysia and Brunei, the third country on Borneo. And here lies a major problem for sustainable development. The problem with forest services is that they do not really pay directly into people’s pockets. Clean water is there or it is not, but it doesn’t make you any richer. But if it is no longer there and you need to buy it elsewhere, it can make you a lot poorer.

A few years ago, we asked some 7,500 people in 750 villages in Indonesian and Malaysian Borneo how deforestation affected people’s welfare. As it turns out, people very much value forests, especially for their role in keeping temperatures cool, preventing floods and landslides, and providing medicinal plants, fish and bushmeat. The people who valued the forests most were those in the interior of Borneo, where their livelihoods are still intricately linked with forests. But people in the coastal parts of Borneo, where most of the forests disappeared in the 1980s, also highly valued forest services, even though there wasn’t a forest in sight. These people now live among oil palm and other plantations, and regret what they have lost. The people who actually weren’t that concerned about forest values were those on the forest frontier. That is where the money is now being made, that is where you cut down trees and trade the timber, and sell your land to developers. These areas are seeing change: new roads coming in, schools and hospitals being built, new people arriving. And people are excited about that change as it feels like progress. But it is progress at a cost of the lost value of $5,000 per hectare, and the question is whether the benefits outweigh the costs.

For real sustainable development to happen, governments need to understand both the credit and debit balance of their national accounts. Double-entry accounting methods are not new. In fact, they date back to the 13th century when a Florentine merchant first employed this method to keep track of the money he lent to his most important customers. The trick in double accounting is to record each financial transaction in assets, liabilities, income, expense or capital, in both the debit and credit account of the general ledger. If the accounting entries are recorded without error, the balance of all accounts having positive balances will be equal to the aggregate balance of all accounts having negative balances. In the economic system of places like Borneo, however, the accounts are in major error, because one major item is missing : natural capital. The $205 billion of non-timber forest value is largely ignored in standard economic accounting, unless someone converts this value into money (for example, by catching a fish and selling it).

Changes in the local climate

When we asked the people of Borneo what really concerned them about disappearing forests, they had a surprising answer: it gets so much hotter! Thirty-three percent of the people we interviewed considered these temperature effects as the biggest welfare impact of deforestation. And anyone who has ever walked out of a tropical rainforest into an open area knows the stifling experience of moving from a pleasant 27 degrees Celsius in a daytime forest to 36 degrees or hotter just a few meters outside it. The impacts are largely unstudied, but people report that they cannot work as much because of the heat, that their agricultural productivity is much reduced and that diseases are much more common in hot areas.

Interestingly, new scientific studies reinforce these findings. A link is now clearly established between deforestation and the rise of emerging diseases, including mosquito-borne diseases, in Borneo and elsewhere in the tropics. The economic impacts of these diseases are large: about $600 million when the first Nipah palm virus outbreak occurred in Malaysia in the late 1990s; and between $30 billion and $50 billion because of the first SARS outbreak. The link between increased disturbance of the landscape through deforestation and the likelihood of zoonotic emergence is now clearly established, and therefore potential healthrelated costs need to be taken into account for any new development scheme.

There is more to this story, though. In discussions about climate, most people think in terms of global warming. This is happening in its own right on Borneo, too. But the local climate effects directly caused by deforestation are several times larger than those predicted by global climate change. Forests are very good at recycling moisture. With cleared areas being much hotter and drier, and forest areas reduced, significant declines can occur in the amount of rainfall. Recent analyses indicate that total precipitation in Borneo has declined by 10.43 millimeters per year between 1951 and 2007, while the daily temperature across Borneo increased by 0.083 degrees Celsius per year between 1961 and 2007. That means that Borneo is about 4 degrees warmer now than it was at the start of industrial-scale forest exploitation, and average rainfall has decreased by some 600 millimeters. To put this in perspective, this is equivalent to the yearly annual rainfall in Paris.

These large but relatively gradual climatic changes could in fact be drastically exacerbated. With forests generating their own wind, moisture and air pressure cycles, some climate models predict that if too much of a particular tropical land area is deforested, then rainfall could stop altogether. This would mean the complete collapse of the oil palm industry since this crop requires a lot of water. Such tipping points remain theoretical, but the theories are good and the risk of such drastic change happening is real.

These climate changes and the role of humans in causing them are rarely recognized, or even denied, by politicians, but they are nevertheless causing problems. Climatesensitive crops such as oil palm require large amounts of water. With ongoing climate change, these crops will experience increasingly frequent and severe droughts, and times of low yields or tree deaths. Developing oil palm in areas with poor access to water, such as steep slopes, in the driest parts of Borneo appears to be very risky. Already, the costs of oil palm development are such that yields of five tons per hectare are needed to be profitable, and with droughts, such yields are rarely reached. Oil palm developers recognize this. This is one of the reasons there are relatively few concessions in the southeast of the island, where dry season conditions tend to be most severe. It is also a reason why oil palm developers like peat. Despite the low fertility of peat areas, they tend to have plenty of water.


It may sound illogical, but while Borneo is slowly drying up, floods are actually getting more frequent and more severe. Between 2010 and 2013, floods in Indonesian Kalimantan affected 868 towns and villages, inundating at least 197,000 houses and displacing as many as 1.5 million people. Rightfully, flooding is the second-biggest deforestation worry among Borneo’s people. The costs to society remain unaccounted. But what does it mean, economically, to one family displaced from their house for a week, their rice and rubber crops inundated, schools closed and roads washed away? Societal costs of flooding could easily run into the billions of dollars yearly. And these costs are increasing because the severity and frequency of floods are tightly linked to deforestation processes.

Another often-discussed but largely ignored flooding issue is the disappearance of coastal peatlands. Whatever politicians and other proponents of peatland development tell you, the science is quite clear. Once you start draining a peatland and cut down its forests, this peat will decompose and ultimately

disappear. Peat is not a typical soil. It is composed of organic matter and water, and once exposed to air, bacteria break it down. This is no small matter. Indonesia has a lot of coastal peatland. If during the next decades these are not managed well, they will go up in smoke (often literarily), and these lowlying areas will be flooded permanently, from both the sea and from inland, leaving behind brackish water swamps that are good for almost nothing. Indonesia would lose 10 percent of its land area that way, displacing millions of people, which in turn could cause major social upheaval.

Because such environmental processes take place slowly, they are generally ignored. Standard macroeconomic accounting uses discount rates that make it pretty much irrelevant what happens over a few decades. You could plant an oil palm concession now, run it for 25 years, make a profit and leave an environmental and social disaster zone, and in economic terms it would still make sense.

Peatland, carbon and fires

Development of peatlands is a much bigger issue than just their subsidence and related flooding risks. Sustainable peatland management is very high on the agenda of the Indonesian government and also the government in Malaysia’s Sarawak state. This is not a surprise, because Indonesia’s 2015 forest and land fires, which were much related to peatlands, were coined the biggest environmental disaster of the 21st century. The smoke and haze resulting from the fires affected as many as 80 million people in Indonesia, Singapore, Malaysia and other parts of Southeast Asia. Initial estimates suggested that fire and haze-related costs to the Indonesian economy amounted to as much as $35 billion, and some two million hectares of land and forest were burned, causing major environmental and social damage. A recent study also showed that some elite people “benefited directly and indirectly from the business of fire, enjoying profits and economic rents at the expense of environmental quality.” This is a common theme on Borneo: a small group of people profit hugely, and a very large group gain little or suffer. Current developments are driving inequality.

Peat decomposition and fires are also major contributors to the release into the atmosphere of large volumes of greenhouse gases, helping to put Indonesia in the top eight of global emitters. The evidence is now strong that the increased concentrations of these greenhouse gases are driving global climate change. Lowlying and climatologically vulnerable parts of Borneo will bear the brunt of these changes. For example, the Asian Development Bank estimates that by 2100, the impacts of climate change will cost Indonesia between 2.5 percent and 7 percent of its gross domestic product. Impacts will be mostly felt, according to another study led by the United States Agency for International Development, in a reduction in agricultural yields – with Kalimantan experiencing major decreases in rice yields – and a major increase in the costs of diseases such as dengue and malaria.

The current Indonesian government has made it clear that it is willing to take the two issues of unsustainable peatland development and land fires very seriously. It has issued a number of laws prohibiting the use of fire for land clearing and the use of deep peatlands for nonforest purposes. It has set up institutions such as the Peatland Restoration Agency, which is specifically tasked with rewetting, revegetating and revitalizing peat areas. That this is an uphill struggle is not a surprise. There is actually little knowledge about peatland management. Traditionally, these areas were not much used by people because of the inhospitable wet conditions and poor soil fertility. Maps from the Dutch colonial era showed peatlands to be entirely devoid of people, with only some fishing villages on the banks of rivers that dissected the peats. But these peatlands are not without value, and, in fact, these ecosystems play major roles in flood regulation, drought prevention, carbon storage and as wildlife habitats and fish breeding areas. There is considerably urgency in knowing how tropical peatlands can best be managed so that these values are maintained.

Fisheries and bushmeat

When forests are cut down, people not only lose the environmental services that these forests provide, but also a major source of income. Some communities generate up to 70 percent of their income from products harvested in forests and forest streams. In interior districts in Kalimantan, where up to 10 percent of the people live below the poverty income line of about $25 per person per month, this forest income is crucial for survival, especially during lean times (for example, failed harvests), when forests provide a fall-back resource. In fact, dietary studies in Indonesia show that people living in areas with agroforestry and swidden cultivation have much healthier diets that are rich in micronutrients than people living in deforested areas.

Problematically, however, few forest products are harvested or managed sustainably. Valuable species such as pigs – the number one source of protein for most people in the interior – deer, monkeys, orangutans, pangolins, hornbills, songbirds, pheasants, snakes and many other animals have been hunted to the point of near-extinction, even in extensive and remote forests. Similarly, tree products such as gaharu are also becoming increasingly hard to find. It is an unsubstantiated myth that indigenous management of forest resources is sustainable under current market demands. The economics of this are quite staggering. One village in East Kalimantan of 130 people, where hunting takeoff rates were studied, consumed 21,125 kilograms of free fish and meat from forests in a year. Studies elsewhere suggest similar average use and consumption rates. Extrapolating these values to all forest-dependent people in Borneo indicates bushmeat and fish values of some $10 billion per year. Loss of these resources would mean that people need to obtain their protein from different sources, and that requires money.

The fisheries sector is a good example of overexploitation. In Sabah, this sector currently contributes about 2 percent to 3 percent of that state’s GDP. It is, however, facing major challenges, such as overfishing and mismanagement of fish populations, illegal fishing by destructive means (fish bombing and poisoning ), pollution from oil palm and destruction of mangrove areas. Many marine and freshwater species are disappearing fast and fish stocks are collapsing. For example, a number of riverine communities (such as the Orang Sungai in eastern Sabah) have lost their major source of income (fisheries), and with that are losing their cultural identity. Aquaculture is perceived as a possible answer to these changes, but the environmental degradation of freshwater ecosystems and of mangroves in Sabah hampers the successful development of these industries. Poor public awareness and the complexity of the legal system further slow progress toward better management.

In Indonesia’s Kalimantan, there are similar declines in fish production and shifts from wild-caught fish to aquaculture. Indonesian government statistics indicate that in 2006, fisheries were the main source of income for 5.8 percent of the people in Kalimantan, but this had declined to 4.9 percent only eight years later. Such low dependence on fisheries is quite a difference from the situation 150 years ago, when 50 percent of the export value from southern Borneo was obtained from marine and river resources, especially sea cucumbers, shrimp and salted fish.


In today’s Borneo, animal species are declining and go extinct at an alarming rate. Currently, the IUCN Red List of Threatened Species lists 574 species in Borneo that require conservation efforts to prevent their extinction. Three species, two of which are wild mangoes, are now considered extinct. Orangutans on Borneo experienced a 25 percent population decline in the past 10 years. Other species such as proboscis monkeys, leaf monkeys and Bornean wild cattle, all unique to this island, are approaching similar futures.

Most of these threatened species are disappearing because of us. Humans are the main factor driving forest exploitation and conversion to agriculture, and the hunting and killing of wildlife. We are also the dominating factor causing emerging diseases, habitat fragmentation and pollution. What is clear is that at this current rate, many more species, some not even known to science, are going to follow a path to extinction within the next few decades.

But why should we be concerned about the extinction of a species when evolution is littered with the extinction of countless numbers of other species? Why should we care about what is happening to the orangutans or other iconic species? Our view of the world is highly polarized and many see development and conservation as incompatible bedfellows. We convince ourselves that development requires sacrifices and that extinction is the collateral damage of modernization. However, losing iconic species such as the orangutan, which people from all over the world admire, would reflect rather poorly on the Malaysian and Indonesian governments. Also, it would make poor business sense. Ecotourism is Sabah’s third-largest source of income. Many visitors come to Sabah because of the ease of seeing its stunning nature and remarkable species diversity. Mismanaging biodiversity would be a major blow to this flourishing industry.

Borneo’s many possible futures

The island of Borneo is undergoing rapid social and environmental change. In some parts of the island these changes are just starting, while in others they are slowing down.

In Sabah, for example, land-use and cover no longer change much. The state has committed itself to certifying its entire timber industry under the criteria of the Forest Stewardship Council, and aims for certification of all its oil palm, to set aside at least 30 percent of its total land area for biodiversity conservation and to maintain at least half of the state as natural forests. Once this has been achieved, it likely provides a good basis for long-term sustainable management.

Of course, lots of details need to be addressed: pollution, erosion, flooding, depleting fisheries, lack of transparency, corruption and so forth. There needs to be better management. But there is a basis to work from toward true sustainable management of natural resources. Brunei, which has protected 75 percent of its forests – although it does face overhunting problems – similarly looks on track to find the right balance between the costs and benefits of deforestation. Sarawak also has indicated the political will to be more careful with its environment, although evidence of on-the-ground improvements remains elusive.

Finally, in Kalimantan, some provinces appear to be doing better than others. The new province of North Kalimantan is rapidly opening up its forests. On the other hand, Central Kalimantan has recently taken significant steps toward reducing forest fires. By and large, however, all of Kalimantan’s provinces remain on a path of rapid forest loss without a clear understanding of how the future costs of today’s mismanagement will weigh up to the benefits.

Not understanding long-term costs is a risky business. Many people, especially poor ones, do not have the luxury to concern themselves with what may happen two or three decades into the future. But it is the duty of governments that do have access to sophisticated economic planning and risk management tools to provide political guidance toward more sustainable pathways. Currently, this is not happening sufficiently because policy makers ignore the science and scenarios, or are provided with erroneous and unrealistic projections or they have vested interests in maintaining the status quo of rapidly generating revenues from depleting natural resources.

Ways forward

Currently, about one-third of Borneo is covered with agriculture and forestry, while half remains covered in forest. As we have argued, these forests have high economic values that are currently not adequately compensated by the nonforest land uses that replace them. Basically, it appears that Borneo is being developed at an overall economic loss. In time frames of one or two decades, these losses end up being a trillion-dollar gamble in which the credit account is quite clear, but the debit account is poorly known and mostly ignored.

Responsible politicians should not take this gamble without first getting better informed about the odds of their bet. Even just improved planning, especially across international borders, could be a major cost saver. A recent study revealed the potential for Borneo to simultaneously retain 50 percent of its land as forests, achieve its palm oil, pulp and paper, and carbon emissions targets, and protect adequate habitat for conservation icons such as orangutans and elephants, and still achieve an opportunity cost saving of $43 billion. The maps opposite show what Borneo could look like in a business-as-usual scenario and an optimal planning scenario that would make the above savings.

All this requires a shift in mind-sets, where all costs and benefits of different land uses are clearly identified and quantified, so that planning for more optimized land-use becomes possible. This is the only way that government goals of sustainability and social equity can be achieved. The fact that there will always be uncertainty in this should not stop decision makers from acting more responsibly.

We believe that despite the often alarmist calls from conservation groups that all is lost in Borneo, there is significant reason for hope. Borneo can and must be managed better for the future of its people. Better and more transparent land-use planning, land right reform, better communication between government, the private sector and communities, better law enforcement, combatting corruption and facilitating more democratic processes are all required to steer the island onto a different path. It is beyond the scope of this essay to spell out all the details of what needs to be done, but here are some simple environmental dos and don’ts to get Borneo onto a much more sustainable path:

• At least half of Borneo’s land mass should be retained under natural forest cover to capitalize on the unaccounted and “hidden” benefits that these ecosystems are providing and to retain their large socioeconomic value. This requires a major overhaul of existing land-use plans and vastly improved law enforcement. New developments should only be allowed in areas that are already deforested. Good performance by local governments should be rewarded with financial incentives through national budget allocations.

• Timber represents between only 2 percent and 5 percent of the economic value of forests. However, conventional management practices and the short logging cycles result in the rapid depletion of the overall natural capital of forests. Natural timber exploitation should be allowed only under long-term licenses and proven sustainable timber extraction practices. Companies that do not deliver should have their licenses revoked and be fined.

• In agriculture and nonforest production landscapes, a minimum of 20 percent of the land should be retained or restored under natural forests. In particular, all riparian forests must be retained as legally prescribed, and restored if damaged. These forests are crucial for flood and erosion control, to maintain water quality, to sustain healthy fish nurseries, wildlife and tourism, and to support the livelihoods of local communities. Then, prohibit all developments on steep slopes (erosion, water catchment) and retain forests there as legally prescribed.

• All peatlands need to be clearly identified and fully protected. Crops requiring drainage that are already planted in peat areas need to be phased out and allowed to regenerate to natural forest conditions.

• Fire as a management tool is no longer an option under the drying conditions of the island; people need to be made aware of the risks posed by fire and arson must be prosecuted. “Traditional” land clearing methods need to be phased out through technical and financial assistance and the allocation of permanent land rights to local farmers.

• Bornean wildlife and plant species are depleted because of the unsustainable levels of uncontrolled hunting and fishing, poaching and illegal trade. Legal practices must be better regulated, for example through development of sustainable harvest systems. Illegal practices (poaching, trade) must be stopped and laws must be enforced.

These recommendations are largely enshrined in the legal frameworks of Indonesia, Malaysia and Brunei, but the political will to implement them remains insufficient. Regulations are required to ensure that any proposed developments assess all potential benefits and costs, taking environmental values into consideration. Without such realistic assessments, no deforestation-related developments should be granted, because they provide losses to the countries and their peoples. It is time for politicians to heed their countries’ laws and act responsibly toward a viable future for the island of Borneo.

Kerrie Wilson is a professor and the director of the Center of Excellence for Environmental Decisions, at the University of Queensland.

Erik Meijaard is director of Borneo Futures in Brunei and an associate professor at the University of Queensland in Brisbane, Australia.
Marc Ancrenaz is director of Borneo Futures and of Hutan, a Malaysian Borneo-based conservation group.

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