Endangered Tigers Could be Saved by Higher Palm Oil Prices

It seems backwards, but tigers and other endangered species could be saved by higher palm oil prices, according to new research.

Palm oil is used in roughly 50 percent of supermarket products today, including many processed foods and cosmetics. This demand has resulted in tropical forests getting cut down to make way for profitable palm oil plantations, which in turn has devastated a large number of plant and animal species - including tigers, elephants, rhinos and orangutans.

Curiously though, a new study by North American and UK researchers has found that consumers will pay higher prices - between 15 and 56 percent more - for palm oil made by companies that help to protect endangered species, an incentive that may lead these animals on the road to recovery.

"One way to save species and biodiversity threatened by agricultural expansion is to show companies the business case for conservation," study co-author Professor Brendan Fisher, of the University of Vermont's Gund Institute for Ecological Economics, said in a statement. "This study shows how important it is for industry and scientists to work together to find potential win-win solutions."

Fisher and his colleagues assessed the finances of a major palm oil company to determine the impacts of conserving land on biodiversity and profits. The results, published in the journal Proceedings of the National Academy of Sciences, found that the profits made from consumers willing to pay more for sustainable palm oil more than covered the costs of preserving land for endangered wildlife.

"International governments have failed to stem the environmental damage caused by oil palm plantations," said lead author Ian Bateman of the University of East Anglia (UEA). "We wanted to find a new way of halting biodiversity loss that actually becomes profitable for private companies."

For the study, researchers surveyed palm plantations, nurseries, forests and cleared land in Sumatra, the Indonesian island where tropical forests have been replaced by palm oil plantations, resulting in significant species declines.

Researchers determined that areas near existing forests were best for conservation, while areas away from existing roads reduced the impacts on company profits. They used these rules to identify which areas promoted biodiversity at the least cost to oil palm companies.

Remarkably, the study found that even in low-productivity regions, a 15 percent price premium could persuade a 32,000-hectare plantation to conserve up to 6,000 hectares.

"This research is critical because one fifth of the world's vertebrates are at imminent risk of extinction," added Robin Naidoo of the World Wildlife Fund (WWF). "The overwhelming cause of this biodiversity loss is land-use change, driven by the expansion of agriculture and plantations for crops such as oil palm. Conversion to agriculture is resulting in the loss of tropical forests at an estimated rate of 13 million hectares each year, therefore it is imperative we find solutions that minimize the negative impact of agriculture on biodiversity."

"Consumers' willingness to pay for sustainably grown palm oil has the potential to incentivise private producers enough to engage in conservation activities. This would support vulnerable 'Red List' species," noted UEA's Bateman. "Combining all of these findings together allows us to harness the power of the market and identify locations where cost-effective and even profitable conservation can take place."

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