Applying Systems Analysis to Evaluate Options for Sustainable Use of Peatlands in Central Kalimantan in Indonesia

Peat fire and the consequent degradation of peatland have had significant negative environmental and economic consequences at national and global levels. A green economy transition path is seen as a socioeconomic solution to address peat degradation. Swamp agriculture, better known as paludiculture, is a green economy action holding promise. However, little knowledge exists on the socioeconomic outcomes of this option, vis à vis conventional development. This research is the first attempt to quantify the implications of a green economy strategy to the management of peatland, in a province where 30% of the land is peat. The research uses the system dynamics methodology to create a customized green economy assessment model, named the Central Kalimantan Green Economy model (KT-GEM). The model is used to assess how three different development scenarios perform against social, economic, and environmental indicators. The analysis shows that the business as usual (BAU) scenario leads to the highest profitability. On the other hand, positive economic performance is countered by unsustainable social and environmental outcomes. The paludiculture scenario instead curbs peat fires and externalities (e.g., cost of health) and results in the most sustainable societal outcome.