Impacts of land clearing for oil palm on coastal ecosystems: A case study of forest and land fires in Riau Province, Indonesia

Abstract

Background: Forest and land fires (KARHUTLA) on tropical peatlands in Riau Province, Indonesia, are a recurring environmental crisis linked to the expansion of oil palm plantations. Despite regulatory frameworks, the use of fire for land clearing persists, driven by economic incentives and weak enforcement. This study investigates the environmental, economic, and social impacts of land burning in Riau, focusing on plantation expansion, illegal operations, and regulatory loopholes. Methods: A qualitative-descriptive approach was employed, supported by secondary data analysis from governmental and institutional reports. The study utilizes an environmental-economic framework to assess the interdependence between natural resource exploitation and macroeconomic indicators, including the Environmental Kuznets Curve (EKC) and IPAT model. Findings: Oil palm plantations in Riau increased by 120,000 hectares, with approximately 1.8 million hectares operated illegally by 190 companies. This expansion significantly contributes to karhutla, resulting in health issues, haze, and transboundary pollution. Although palm oil exports support Riau’s economic growth—accounting for half of its total exports in 2021—this comes at the cost of severe environmental degradation and tax losses of up to IDR 150 trillion. Regulatory exceptions permitting traditional burning practices are frequently exploited, undermining enforcement efforts. Conclusion: This paper concludes that sustainable solutions require tighter regulation, stronger institutional enforcement, mandatory ISPO/RSPO certification, and a shift toward technological innovations in land clearing. Furthermore, fiscal policies such as commodity taxation can fund environmental restoration efforts. Novelty/Originality of this Article: This study lies in its integrated analysis of ecological degradation and economic output through a macroeconomic lens, offering actionable recommendations for balancing palm oil-driven economic growth with environmental sustainability in developing regions.