Unveiling economic dimensions of peatland restoration in Indonesia: A systematic literature review

Abstract

Indonesian peatlands play a critical role in global carbon storage and biodiversity conservation, but they face significant ongoing threat of degradation and loss due to human-induced pressures, including the development of industrial plantations, agricultural expansion, extractive forestry practices, and recurrent fires. The imperative to restore these peatlands is significant, but the restoration effort has, so far, been underwhelming. This paper systematically reviews studies that have assessed the economic costs and benefits of peatland restoration in Indonesia. It summarizes the substantial economic stakes involved in peatland restoration efforts, ranging from millions to billions of dollars. The collective findings emphasize the significant costs required for restoration, alongside the potential economic benefits derived from environmental conservation, climate change mitigation, and sustainable land management. These economic valuations are complemented by a holistic consideration of ecological, social, and cultural factors, providing valuable insights for policymakers and decision-makers. However, while these studies have offered valuable insights into various aspects such as local preferences, willingness to pay, financial costs, and potential economic benefits, none have comprehensively explored the potential trade-offs or forgone opportunities resulting from the proposed restoration programs. This is a critical gap in current research and practice. We illustrate the need for more systemic learning about how peatlands are valued to advance a transition towards healthier peatlands in Indonesia.