Government Program Accidentally Reduces Deforestation by Helping People Out of Poverty

A government program to alleviate poverty in Indonesia through direct cash transfers to poor households managed to unintentionally reduce deforestation in participating villages by an average of 30 percent.

The program—which gives out payments conditional on certain health or education-related obligations—was not designed with environmental protection in mind. But according to a first-of-its-kind study published in the journal Science Advances, this fall in deforestation may be a welcome, if unintended consequence, of the conditional cash transfers.

"For decades, people have been debating whether alleviating poverty and protecting the environment are at odds with each other. Resolving this debate is important because lots of poor people are found in the same areas where we find the most endangered ecosystems, like the rainforest," Paul Ferraro, an author of the study from Johns Hopkins University, told Newsweek.

"Anti-poverty advocates assume that if, for example, you lock up rainforest in a national park, you immiserate the people who live around it. Environmentalists assume that if you give money to poor people around the rainforest, you give them greater needs or the means with which to further degrade the forest," he said.

Ferraro said that authorities should be looking for opportunities to reduce poverty and simultaneously improve the environment, or vice versa.

"We're not doing that, in large part, because we don't know how. The evidence we have to guide us is weak," he said. "So [we] decided to take closer look at an anti-poverty program that is becoming increasingly popular throughout the world—conditional cash transfers—and measure the environmental impacts of one such program in a country that is a high priority for environmental protection: Indonesia."

Indonesia is among the most biologically rich countries in the world, with the third largest area of tropical forest. However, around 25 million Indonesians out of a total population of roughy 267 million still live below the poverty line, according to The World Bank. Furthermore, it has one of the highest deforestation rates in the world, accounting for 20 percent of global tropical forest loss between 2000 and 2012.

Mainly as a result of this forest loss, the country is also one the largest emitters of greenhouse gases on the planet. According to the study, poor, rural villagers contribute to this deforestation through agriculture or the removal of timber.

In 2008, some rural villages in forested areas began participating in the national "Family Hopes Program," known in Indonesia as "Program Keluarga Harapan" (PKH.) The program provides conditional cash transfers (CCTs) to poor households, with payments made quarterly for between six and nine years. The transfers cover around 15 to 20 percent of the consumption of the recipients, bringing them above poverty line expenditure levels.

In the paper, the researchers looked at the impact of the CCTs in nearly 7,500 villages in forested areas between 2008 and 2012. Among these villages more than 260,000 households were receiving payments from the program by the end of the study period.

Even though the program was not designed to benefit the environment, the researchers found that it reduced the need for poor farmers to cut down forest. They say the extra money meant farmers had less need to compensate for rice farming losses when rains were delayed, while also giving them the opportunity to substitute consumer goods sourced from deforestation activities with alternatives.

"We found that modest, but persistent, transfers of cash to extremely poor households reduced deforestation by about 30 percent. That result is surprising given that the cash transfers were not contingent on reducing deforestation and there were many possible economic paths through which the cash might have had deleterious effects on the forests," Ferraro said.

"Our study is the first-of-its-kind to suggest that cash transfers to the impoverished can have a positive effect on forest conservation. In other words, reducing poverty does not have to create unavoidable environmental costs."

deforestation, Indonesia
Deforestation in Berau, Kalimantan, Indonesia. Mahastra Wibisono

The results could have important implications for the fight against both poverty and deforestation, two of the great challenges of the 21st century, although whether the results will generalize to other countries is unknown. Currently, 16 tropical countries have some form of anti-poverty cash payment program.

"Similar programs in other countries should be evaluated in the same way we evaluated Indonesia's program, but if what we found in Indonesia generalizes to other biodiverse nations, it would provide some hope that global efforts to eradicate extreme poverty and reverse the loss of biodiverse ecosystems can be complementary," Ferraro said.

"In their favor, the mechanisms we believe are driving the result in Indonesia—namely the poor using the cash, instead of the rainforest, to supply themselves with insurance against bad weather and with consumer goods—are common in many places in Asia and Africa," he said.

Nevertheless, the researchers say that there is one other well-designed study of the environmental effects of cash transfer programs on the forest, which found that transfers actually increased deforestation in Mexico, possibly by raising the demand for beef consumption that could only be satisfied by clearing forests and installing pastures.

"Which country—Mexico or Indonesia—better captures reality in tropical countries is an open question," Ferraro said.

Aside from cash transfers, other initiatives have been successful at reducing deforestation in Indonesia by directly supporting low-income communities using innovative methods. International non-profit Health In Harmony, founded by American medical doctor Kinari Webb, has been working in the country for more than a decade to protect rainforests while empowering local communities.

Webb founded the non-profit after a stint on the Indonesian island of Borneo studying orangutans where she learned that many people in forest communities exploited the natural resources around them—for example, by cutting down trees to sell—because it was the only way they could pay for health care, food and other necessities.

"We work at the intersection of rainforest conservation and human health. And the reason for that is that I listened to all of the folks that I met there and I had been horrified how the forest was disappearing around me," Webb told Newsweek.

"I was even more horrified when I discovered that the local community really cared about the forest and wanted it to be there for the future but they were often logging to pay for access to health care. One man I know cut down 60 trees to pay for a C-section. And we're not talking small trees, we're talking giant rainforest trees. Some of them can be 22 stories tall."

For almost 15 years, Webb has been working with communities in Borneo based on a process known as "radical listening."

"We asked the communities what they would need as a thank you from the world community so that they could actually protect their rainforest. What they said was they needed access to affordable health care so they wouldn't have to log to pay for it. They also needed an alternative livelihood—namely, sustainable agriculture training," Webb said.

Health in Harmony has helped to implement these solutions—providing health care and organic farming training—in these communities, and over the first 10 years, the non-profit witnessed a 90 percent fall in logging households. Furthermore, infant mortality declined 67 percent, forest loss was stabilized and more than 50,000 acres of logged forest grew back, according to the organization.

"We saw a huge increase in economic wellbeing, as well as the resiliency of the community. They were no longer importing food, they were growing the food that they needed and they were no longer dependent on very expensive chemical fertilizers," Webb said. "We have a medical center where we allow people to pay for their health care with non-cash payment options, such as seedlings and labor. So anyone can always access care because of that."

This integrated approach to human and environmental health creates a "regenerative economy," helping to prevent deforestation, while also providing people with livelihoods, according to Webb. Although Health in Harmony's efforts are focused on Indonesia, Webb said that the non-profit's approach could also be applied to other communities around the world.

The Health in Harmony approach, CCTs, and other similar interventions, may be even more significant in the midst of a global pandemic, which has led to a dramatic global economic slowdown. Many people in low-income communities around the world may have to resort to exploiting the forests to make ends meet, according to Webb.

She said the crisis highlights the need for governments to move away from prioritizing economic growth above all else when it comes to the rainforests, which would not only provide a more sustainable future but also help to minimize the risks of future pandemics.

"We have to start thinking about the world in terms of a planetary health blend. If nothing else, this pandemic should be teaching us that we are all interconnected and this idea that you can somehow separate protection of ecosystems and conservation from human wellbeing and the economy is just ridiculous," she said.

"We don't know exactly where this virus came from but we know that we have previously had viruses emerge from threatened ecosystems. It's a ticking time bomb and it will happen again if we continue to damage these ecosystems."

This article was updated to include additional comments from Kinari Webb.