Cash incentives, consumer pressure and working with Indonesia can clear the haze
Simon Tay Today Online 29 Oct 10;
After rain has dampened fires and the haze has lifted, Singapore and the region are at something of a crossroads.
We can choose to treat the haze as a nuisance that recurs once in a while but is not serious enough to command attention. Singaporeans have coughed, wheezed and whined during the latest bout of the haze. But now: Out of sight, out of mind.
A second path is to point fingers at Indonesia and demand they take responsibility. This is tempting since the fires are man-made, and large companies can be blamed.
The third choice is a harder path that has costs and complexities. This is to engage the problem and work with Indonesians towards a solution that will benefit all. Such an engagement will depend not on allocating blame but on cooperation and new incentives. Trends are emerging that make the third path more possible now than in the past.
What are the elements of such an approach? There are three pillars that should be combined for progress: Emphasise ground-level projects, international treaties and changes in consumer behaviour.
Singapore can play a significant role in these even if the problem is firmly and deeply rooted in Indonesia.
Ground-level cooperation has already begun with Singapore and Malaysia working alongside district and provincial level authorities in Jambi and Riau, respectively. Initial reports have been positive and these efforts should be fully evaluated.
If the results are positive, then these projects should be replicated in other fire-prone districts. In these ground-level projects, Singapore must work in partnership with the local community and district officials. Companies with land holdings, especially those based in Singapore, should also be drawn in as part of their corporate social responsibility.
There are often conflicting reports whether it is large plantation companies or small landholders and landless farmers who cause the fires. A ground-level strategy to bring them together to align their interests is, therefore, key.
These ground level efforts must be linked to the second pillar of national government and international treaties. It is not credible for Indonesia to say it is making real effort unless it ratifies the Asean Haze Agreement. When pressed, Indonesian lawmakers often explain and complain there are many treaty burdens but few benefits for Indonesia.
While some use this argument merely to delay and obfuscate the issue, there is substance in saying that Indonesia does need assistance and incentives. There are costs in managing land and forests to avoid degradation and deforestation, and to forgo the cheap solution of rampant and unsustainable land clearing.
CARROT AND STICK
This case has been increasingly accepted in the climate change negotiations. Although there is much debate on the different aspects of a post-Kyoto agreement, there is considerable agreement on REDD, which links financial assistance to efforts in Reducing Emissions from Deforestation and forest Degradation.
Norway, an early leader, has recently pledged US$1 billion ($1.3 billion) to an REDD partnership with Indonesia that the latter can tap. This should be linked the fires and haze, which are a major source of climate change emissions for Indonesia.
Other countries, especially from the developed world, are looking to similar commitments to lock in carbon and offset their own emissions. Singapore could potentially play a role helping move this new financial incentive scheme forward.
Another effort Singapore can make arises from our role as the major regional hub trade and finance, and a significant centre for production and consumption. Consumer and investor pressure could influence the behaviour of companies involved in the land-clearing industries of palm oil, pulp and paper and other resources.
This type of pressure can be influential, especially as Singapore is following similar concerns in Europe and elsewhere. Moves have already been taken in Europe to name, blame and boycott companies shown to be acting unsustainably. Companies have responded positively with greater transparency about their practices, with some developing eco-labels to distinguish their products.
Closer to home, some have developed credible certification for their company practices through industry groups, such as the Roundtable on Sustainable Palm Oil.
Singaporeans should take up similar practices in dealing with the producers and products in suspect sectors. This is not only the best practice for environmental sustainability but also congruent with the emerging expectations of consumers and investors. A sign of this emerging trend is the new guideline for SGX-listed companies to issue sustainability statements.
After more than a decade of this recurrent problem, a sense of resignation and fatalism is easy. Resentment, too, is another common response. Cooperation is complex work and will require consistent and focused work to develop a mix of incentives and pressures.
It is the hardest path forward but perhaps the only one that can produce an enduring clear light at the end of the haze.
Simon Tay and Lim May-Ann are respectively the Chairman and Manager of Policy Research at the Singapore Institute of International Affairs. The SIIA recently held a dialogue on the haze, which was attended by environmental groups and NGOs, academics and think-tanks based in Singapore.
