Ecological Archives A025-006-A5

Elizabeth A. Law, Brett A. Bryan, Erik Meijaard, Thilak Mallawaarachchi, Matthew Struebig, and Kerrie A. Wilson. 2015. Ecosystem services from a degraded peatland of Central Kalimantan: implications for policy, planning, and management. Ecological Applications 25:7087. http://dx.doi.org/10.1890/13-2014.1

Appendix E. Methods to model potential value of oil palm.

Variables selected by the classification and regression tree model for oil palm suitability included physiography, hydrology, and log(peat depth), resulting in a model with eight terminal nodes and a 41% misclassification rate. We assumed that oil palm plantation owners would devote all of their land resources to oil palm. We did not consider the status of existing oil palm concessions (Fig. E1) in our calculations of net present value.

Table E1. Profit margins from literature review. We converted all profit values to 25 year NPV equivalents using discount rates stated within each study, and converted these values to 2008 USD using the United States consumer price index (http://www.bls.gov). We then calculated the profit quartiles based on these values, excluding study 1 as it did not account for all costs.

Study

USD/ ha

Description of oil palm value

Source

1

7900 (5500 – 12500)

2007 NPV over 25 years, assuming 25 year cycle and 15% discount rate, not including any costs other than startup, and assuming large companies

http://news.mongabay.com/2007/0717-indonesia.html, accessed 3rd February 2013.

 

2

3388

2006 NPV over 25 years for mineral soils in areas near major centers

http://www.dephut.go.id/INFORMASI/LITBANG/IFCA/Summary%204%20policy%20makers_final.pdf, accessed 3rd February 2013.

 

3

2650

2006 NPV over 25 years for mineral soils in isolated areas

http://www.dephut.go.id/INFORMASI/LITBANG/IFCA/Summary%204%20policy%20makers_final.pdf, accessed 3rd February 2013.

 

4

4265

2006 NPV over 25 years for peat soils

http://www.dephut.go.id/INFORMASI/LITBANG/IFCA/Summary%204%20policy%20makers_final.pdf, accessed 3rd February 2013.

 

5

258

Annuitized 2009 value for conversion of alang-alang grasslands.

http://tropcropconsult.com/downloads_files/Fairhurst2009.pdf, accessed 3rd February 2013.

6

762

2007 average annual profit from four major oil palm companies

(Venter et al. 2009)

 

FigE1

Fig. E1. Status of oil palm plantations as of 2008 and areas of deep peat (>3 meters).


Literature Cited

 Venter, O., W. Laurance, T. Iwamura, K. Wilson, R. Fuller, and H. Possingham. 2009. Harnessing carbon payments to protect biodiversity. Science 326:1368.


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