Deforestation in Berau, Kalimantan, Indonesia     Photo: Mahastra Wibisono, Newsweek

A new study published yesterday in the journal Science Advances found that in Indonesia, a country with bountiful but highly exploited natural resources, a national anti-poverty program also reduced deforestation as a side benefit. The program uses conditional cash transfers (CCTs) to elevate families over the poverty line, an increasingly popular way to provide assistance, conditional on taking specific actions related to education and health.  As a result, families did not need to resort to clearing forests to make ends meet or grow more food during difficult times.  The researchers compared satellite images of areas where the government made CCTs to those where they did not and found a distinct increase in forest cover in those with cash assistance.

Why This Matters: Indonesia is one of the poorest nations in the world, and has the third-largest amount of tropical rain forest.  It also, according to Global Forest Watch, is the country with the third-highest rate of rainforest loss in the world in 2019. Due to this loss, Indonesia is also the fifth-largest emitter of greenhouse gasses in the world, according to the World Resources Institute. A program that curbs deforestation and cuts greenhouse gas emissions in Indonesia while reducing poverty seems like a no-brainer. 

Big Benefits, Small Dollars

When compared to the costs of climate change, the Indonesia program’s benefit of keeping Indonesian rain forests intact more than justifies it.  One of the study authors argued in Science News that the economic benefits of saving the forests “justify the intervention.”  It also demonstrates that a healthy environment and strong economy are not at odds with one another — it is possible to have both.  One of the authors told Newsweek, “For decades, people have been debating whether alleviating poverty and protecting the environment are at odds with each other. Resolving this debate is important because lots of poor people are found in the same areas where we find the most endangered ecosystems, like the rainforest.”

Accidental Impact

Most interesting is the fact that the environmental benefits of reducing forest loss were not the objective of the program.  “We found that modest, but persistent, transfers of cash to extremely poor households reduced deforestation by about 30 percent. That result is surprising given that the cash transfers were not contingent on reducing deforestation and there were “many possible economic paths through which the cash might have had deleterious effects on the forests,” one author explained.  Instead, the goals were increasing education and health — that is what the CCTs were incentivizing.  The question is whether this type of cash transfer in other poor countries could have the same effect.  There are 16 tropical countries that currently have some form of anti-poverty cash payment program.  The authors believe that CCTs in other Asian countries may have the same impact.