3 ways to make money talk louder in fighting the haze

Burton Ong, Straits Times AsiaOne 25 Oct 15;

Money lies at the root of the haze problem, which has afflicted the region over the past month. Open burning is the most cost-effective means of forest clearance, a necessary operational stage in the oil palm plantation business.

Concession holders and their licensees pay their contractors to engage in these activities because the externalities of such practices - particularly the health and economic consequences of the haze - are not borne by them directly. Neither do those who purchase palm oil for manufacturing purposes pay for the environmental harm caused by palm oil producers. In addition, corruption prevents the effective enforcement of laws which prohibit open burning activities. But perhaps money might also be part of the solution?

Here are three financial responses Singapore should consider.

First, crunch the numbers.

Calculate, or at least give a credible estimate of, the cost of the haze to Singapore. To what extent has patronage at alfresco establishments declined? How much has been wasted because outdoor events have had to be cancelled or rescheduled? How much more has been spent on respiratory illnesses this past month, compared to non-haze-season months? Only with estimates of these figures can we appreciate the full economic magnitude of the haze, as well as how far we should be prepared to go to combat this problem.

Just as Singapore is able to give numerical estimates of the economic benefits of its various policies - whether to build casinos, to expand Changi Airport or redevelop a piece of land - putting a figure to the various financial consequences of the haze should not be too much of a challenge.

Second, invest in research and development. Substitutes for palm oil should be developed and improved so that there will be less reliance on, and demand for, this commodity. As a centre for biotechnology research and investment, Singapore is well placed to promote agro-technological advancements that encourage producers of household goods and food manufacturers to switch to crop oils that are produced without large-scale open burning. Consumers would then be empowered to make purchasing decisions that demonstrate their dissatisfaction with the palm oil industry.

Similarly, Singapore has had great success in relying on science and technology to address its major security concerns: Water (for example, reservoirs, recycling and desalination) and energy (for example, energy-efficient buildings, liquefied natural gas and renewable energy sources). Surely science can provide us with a way to diminish our dependence on the palm oil industry and its pollutive business practices.

Third, reward whistle-blowers. One of the biggest problems with prosecuting errant land users who engage in open burning is gathering enough evidence against them. Sufficiently reliable and detailed information is necessary to secure successful, and timely, prosecutions against these wrongdoers. Individual informants may be incentivised to squeal on those who engage in burning practices if they are rewarded for providing enough information to prosecutors. Better still, pyro-contractors hired by errant plantation businesses might choose to report their employers, in exchange for a financial reward, instead of setting these fires.

The income that individual fire-starters lose from not carrying out their orders can be more than compensated for with a carefully designed monetary incentive scheme.

Once again, Singapore has already had some experience with such strategies. The Competition Commission of Singapore has a whistle-blowing scheme which rewards those who expose the anti-competitive shenanigans of others. Furthermore, if the National Environment Agency is willing to consider giving rewards to those who provide the authorities with evidence of littering that leads to successful prosecutions, why not extend the same incentives to those who supply evidence against the culprits of a much more serious environmental crime?

Singapore has certainly not been passively tolerant of the situation, commencing investigations against Singapore-linked businesses connected to the burning and offering fire-fighting assistance.

Given the complex nature of the haze problem - a conflagration of commercial, geo-political and climatic factors - it would be naive to think it will go away any time soon. However, rather than just complaining about or, worse, adapting to the poor air quality, why not pursue a few more pro-active steps that might help us - pardon the pun - fight fire with fire?

The writer is associate professor, Faculty of Law at NUS, and deputy director at the Asia-Pacific Centre for Environmental Law