Clearer skies and clear strategy, as SIIA’s latest transboundary haze report reveals most positive outlook yet

High optimism and low risk set the tone for the Singapore Institute of International Affair’s Haze Outlook 2021. The report, launched on the 24th June, revealed the current prospect of severe and prolonged transboundary haze affecting Singapore, Indonesia and Malaysia during this year’s dry season is “Green”, its most positive outlook since inception in 2019.

The findings were based on research, analysis, and engagement with major sustainability stakeholders, including government agencies, agri-businesses and academics.

Clearing the air on international relationships

Transboundary haze has been clouding the quality of the atmosphere – and Indonesia’s international relations –  since the 1980’s. Smog from carbon-rich, highly-flammable, degraded peatlands spreads quickly to neighbouring Singapore and Malaysia, causing up to 100% increase in hourly 24-hour pollutant standard index (PSI) readings, and a spike in an average water and electricity consumption of 5.1% and 2.34%, respectively during peak haze periods, such as the 2015 air pollution crisis. The impact on health can also be severe, with studies indicating links between haze exposure and psychological, respiratory, cardiovascular, and neurological damage.

The right weather to forecast low risk

SIIA’s three-tier traffic light assessment measures the risk of severe haze based on three major factors. The first is weather. The Indonesia weather agency has predicted a delay in Indonesia’s dry season this year, with extreme rainfall taking its place throughout the months of April and May. This lowers the risk of forest fires, especially across highly flammable peatland soil.

Carbon credit superpowers

But situation is not just down to circumstance. Normally water-logged peatlands are not fire prone. The spike in big businesses growing oil palm in industrial plantations and exporting to overseas markets, have driven both mass deforestation and peatland conversion to drier, more flammable hotspots.

The challenge, as Professor Simon Tay, Chairman SIIA explains, is to proactively “change risk to opportunity and twin recovery with greener business practices”.

These include improved land management policies by the Indonesian government, and the growing recognition amongst authorities there that the nation’s carbon-rich peatlands and forests in the country could be a source of carbon credits, the second major factor stated in the SIIA’s report.

At this critical juncture, Professor Tay agrees that “the possibility of creating, certifying and selling carbon credits can be a major turning point”.  It creates a platform where environmental governance is not just good practice, it is also good business, and can help boost the country’s standing on the global landscape. As early as last November, Indonesia’s Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan was pointing to Indonesia’s potential to become a “carbon-credit superpower”.

Grassroots green governance

Change doesn’t happen overnight, and relies not only on strong policy set from the top, but also “human behaviour”, the third critical factor cited in SIIA’s report. Supply chain disruption triggered by the pandemic has led to a hike in palm oil prices, yet drop in demand has cast uncertainty over the industry’s medium to long term survival. Exports to China, one of Indonesia’s main markets, plunged by up to 57% in January last year.

Higher export levies announced late 2020 may also make the Indonesian palm oil lose its market competitiveness against other markets such as India and – ironically – Malaysia.

Amidst this market uncertainty, scrutiny on sustainability can take a back seat. Palm oil smallholders – expected to account for over 60% percent of the total national acreage by 2030 – often go unmonitored, with no official government record of what land they own. It often falls on not for profit agencies such as the SIIA, or the Indonesia-based Center for International Forestry Research, to spread ESG awareness, and accountability. Technology can be their greatest tool. A CIFOR team implemented Google Earth and other high-resolution satellite services to scour images of Kalimantan for images of palm trees, and monitor small stakeholders’ environmental impact.

Collaboration not complacency

While Singapore is emerging as a carbon credits hub, efforts from Indonesia will also be critical, and it is still currently unclear what regulatory environment will exist in Indonesia to govern carbon credit generation and trading. As Tay cites the need for progress that is “synergistic instead of competitive”, the report stresses that “collaboration between national governments is also needed to work towards alignment on carbon pricing and pave the way towards a liquid market for carbon credits”.

Clear skies should not be a cause for complacency. But the recent risk rating should be a clear call to action.

The full SIIA Haze Outlook 2021 report can be downloaded here.

Image credit: The Jakarta Post

Amanda Oon

Amanda Oon is a freelance journalist, content producer and communications professional, based in Singapore. She has written numerous articles on Southeast Asian business and culture, with a specialist focus on technology, sustainability and ESG.

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