November 30, 2015 Print

Photo credit: CIFOR

Every year, widespread forest fires and resultant air pollution in Indonesia demonstrate how a lack of clear property rights often leads to the exploitation of public land. A recent analysis published by the Property and Environment Resarch Center (PERC), an Atlas Network partner based in Bozeman, Mont., explains how full government ownership of forest lands in Indonesia has fostered an environment in which farmers slash and burn public land to plant crops and spread “devastating air pollution” across Southeast Asia. The solution to successful conservation, argues author Rainer Heufers, executive director of Atlas Network partner the Center for Indonesian Policy Studies (CIPS), depends on strong property rights that provide an incentive for careful long-term stewardship.

“The involvement of the private sector in conservation efforts is crucial, not just for conservation itself, but for providing alternative income opportunities to the local communities,” Heufers writes. “In neighboring Malaysia, the 1998 privatization of tourism facilities in Kinabalu Park aimed to improve the livelihoods of local communities. According to UNESCO, the park remains in an excellent state of conservation, which cannot be said for Indonesian national parks. The head of the Mount Rinjani National Park in Indonesia reported in September that locals have cleared up to 50 hectares of conservation forests. The involvement of private tourism services appears to be a better solution than treating forests like museums.”

The Indonesian government’s focus on eliminating the country’s current forest fires may alleviate some of the short-term pollution, but leaves intact the dysfunctional system and its perverse incentive structure that give rise to the country’s widespread fires every year.

“President Widodo may have cut his US trip short to oversee efforts to extinguish forest fires, but extinguishing these fires only treats the symptoms,” Heufers concludes. “Much bigger challenges lie ahead when the government tries to overcome the root causes of these fires. This would highlight the urgent need for the enforcement of property rights, the reform and development of government agencies, the reduction of barriers to trade and technological progress, local economic development, and the inclusion of the private sector in conservation efforts. Only when these issues are tackled can Indonesia hope to effectively protect its natural environment.”

PERC also recently highlighted the role that entrepreneurship plays in providing clean solar energy to the rural households and local industries of Indonesia, where millions rely on gas, diesel, and kerosene to provide their power needs.

“Earlier this month, PERC awarded the first-ever Enviropreneur of the Year prize to [engineer Bryce] Gaboury for his focus on clean energy solutions,” wrote Wendy Purnell, PERC director of outreach, in October. “Gaboury co-founded Electric Vine Industries, a micro-utility delivering affordable, reliable, and sustainable energy to thousands of Indonesian households and communities. Gaboury and his colleague, Matt Basinger, have developed a unique solar vine technology which provides rural households and local industries with solar panels, generation units, and storage cells. Smart-grid technology provides real-time monitoring for producers and consumers, as well as pay-as-you-go services via mobile phone.”

Ultimately, the path to improving the lives of millions of people who live without basic necessities lies in clear property rights, technology, and a regulatory climate that allows entrepreneurial trade to flourish.