Transboundary Haze Pollution (THP) presents a serious ongoing environmental and economic problem of international consequence. In 2006 the United Nations Framework Convention on Climate Change (UNFCCC) reported that haze episodes between 1997 and 2002 contributed approximately 40 per cent of the world’s total CO2 emissions at over 400 million tonnes.[1] The Asian Development Bank estimated that the 1997-1998 episode cost Indonesia up to US$9.4 billion, while Singapore incurred damages of approximately US$263 million, predominantly in lost tourism receipts.[2] The noxious chemicals found in THP are also hazardous to human health, resulting in dramatic spikes in hospitalisations during these episodes.

THP is caused by slow-burning fires on exposed peat lands lit by landholders clearing forest growth for cultivation. The Center for International Forestry Research (CIFOR) reports that exposed peat lands require only a few days of dry weather to risk extreme fire danger.[3] The highly flammable decomposed material compounds that constitute peat are extremely difficult to extinguish once lit.

Unfortunately, since the 1997-1998 haze catastrophe the problem of THP only seems to be getting worse. In June 2013 the Pollutant Standards Index (PSI) hit an all-time high in Singapore at 371, making it the worst haze episode recorded in history.[4] The Government of Indonesia demonstrated its desire to combat THP with the ratification of the ASEAN Agreement on Transboundary Haze Pollution (ASEAN Haze Treaty) in September 2014.[5] Yet Indonesia alone does not have the capacity to fix this problem. While no action can occur without the consent and cooperation of Indonesia, evidently the Government of Singapore must also change its policy responses to reduce the damage caused by THP for its own safety and security, as well as the wider wellbeing of the region and global climate.

Fair-weather neighbours? The problem with Singapore’s initial policy responses to THP

In response to dangerously toxic levels of THP in June 2013, and acting on public outcry, the Singaporean parliament passed the Transboundary Haze Pollution Act (2014) (Haze Act) to criminalise persons thought to be guilty of causing THP episodes that reach Singapore. Chong and Chen suggest Singapore’s legislation targets commercial entities negligent in their ‘social and environmental responsibilities’ by making them susceptible to both civil and criminal liability.[6]

The problem with this approach is that it almost exclusively targets Multi-national Corporations (MNCs) operating on large-scale plantations. Data collected by CIFOR using a NASA LANDSAT 8 satellite shows that only 21 per cent of THP originated from fires on large-scale plantations operated by MNCs. The much greater 79 per cent of instances stemmed from fires on land owned or leased by small holders.[7] This important observation highlights that Singapore’s Haze Act will be difficult to enforce.

The World Resources Institute suggests that there are significant discrepancies between Indonesian Government drawn maps and those held by landholders. The confusion caused by a lack of clearly defined boundaries makes it considerably more difficult for Singaporean regulators to mount conclusive evidence on which entities may be liable for causing THP.[8]

Another of Singapore’s major policy responses has been furthering regional cooperation through the ASEAN Haze Treaty. Indonesia’s ratification of the Treaty gives its relevance a boost but it still remains a blunt device. A key element of the Treaty was provision for a regional ‘Haze Fund’. ASEAN members have so far voluntarily contributed approximately half a million dollars toward the Fund; a measly sum compared to the economic damages caused by THP. Furthermore, the Treaty lacks serious obligation and implementation, typical of the ‘ASEAN Way’.[9] The ASEAN Haze Treaty will likely remain a forum for regional-level dialogue and little more.

A new policy approach to reduce the haze

Singapore’s initial policy responses to THP possess significant shortcomings. THP is essentially a local problem. If small holders are presented with incentives to change their practices, along with more efficient alternatives, it is likely that THP will be reduced. Progress therefore requires the implementation of targeted policy made up of pricing and non-pricing mechanisms. In line with the recommendations of CIFOR, a pool of financial and human resources must back these mechanisms, which can be derived from international donors.[10]

Indonesia does not have the capacity alone to dedicate the required amount of financial resources to tackle the problem. While affected countries in the region are best placed to negotiate policy proposals and steer implementation, the most practicable source for extensive funding is at the global level.[11] Taking into account the scale of CO2 emissions contributed to the global total of greenhouse gas emissions, the international community has a vested interest in mitigating peat-fires. As the most directly affected countries within the region, it makes sense that Singapore and Indonesia adopt the joint role of principle sponsors of a renewed ‘THP Fund’.

Sandler suggests that challenges with significant localised influences are the easiest to confront because actors are generally able to make a measurable difference and receive a net benefit for cooperating.[12] For instance, by investing in the measurable reduction of Indonesian peat-fires, rich country donors will be taking action to meet their agreed global carbon reduction targets. At home they may also be able to ‘sell’ the policy as a strategy to offset their own contribution to global emissions.

One of the major uses of the Fund would be to finance non-pricing mechanisms that incentivise small landholders to adopt more sustainable land clearing and cultivation practices. Firstly, money would be apportioned to reputable organisations conducting research and development into new technologies that enable such practices. As CIFOR suggests, there currently exists little incentive for landholders to change their practices because ‘burning methods cost approximately US$180 per hectare whereas non-burning methods cost as much as US$800 per hectare’.[13] Consequently, research would leverage knowledge on the causes of peat fires and equip landholders with more efficient and environmentally friendly alternatives.

Secondly, to reduce costs the Fund would make available a certification scheme to which land holders can apply, making them eligible to receive grants for ‘verifiable activities with measurable benefits’.[14] These public-private partnerships would make capital accessible to small-landholders investing in sustainable technologies without unnecessarily impeding profitable agribusiness. Making available funding for local stakeholders pursuant to certification will also support the transparency of the industry by helping the Indonesian Government to have greater visibility over the landholders (including property boundaries) that apply for grants, acting as a type of self-disclosure mechanism.

Lastly, the Fund would apportion financial resources to assist the Indonesian central and provincial governments to institute and enforce pricing mechanisms. A pricing mechanism is needed to ensure that the private economic benefits of land clearing do not exceed the negative externalities in the form of social and environmental costs.[15] Singapore should persuade Indonesia to reinvest revenue gained from pricing mechanisms into non-government regulatory bodies that monitor and administer certification standards and enable further research and development.

Constraints

The obvious constraint to realising the policy recommendations above is the necessity for Indonesian cooperation. Considering the strong influence of logging lobby groups in Indonesia this could potentially be difficult. Illegal activity, including corrupt practices, has been the main reason why certain environmental regulations have been ignored. Furthermore, the reformasi induced process of decentralisation has paradoxically increased the difficulty of securing buy-in on policy solutions by multiplying the number of stakeholders and increasing the level of bureaucracy. To successfully implement the above policy recommendations persuasive diplomacy will be required by Singapore as well as increasing regional and global scrutiny as a consequence of inaction.[16]

Conclusion

THP continues to be a serious environmental challenge of global significance. Indonesian peat-fires resulting from unsustainable burning practices are known to be the cause of the majority of THP. As one of the most seriously affected countries in the region, Singapore must step up and take the lead in empowering Indonesia to control the problem. Contrary to Singapore’s initial policy responses it should, in cooperation with Indonesia, lead an international financing initiative to fund both pricing and non-pricing mechanisms that incentivise, and build the capacity of, local actors in Indonesian THP ‘hotspots’. Despite constraints, Singapore and Indonesia must act to reduce the damage caused by THP for its own safety and security, as well as the wider wellbeing of the region and global climate.

Jack Greig, 25, is an educator in Victoria and a graduate of the Crawford School of Public Policy at the ANU.

References:

[1] International Forest Fire News (2000), ‘The 1997-98 Air Pollution Episode in Southeast Asia Generated by Vegetation Fires in Indonesia’, International Forest Fire News (IFFN), accessed at <http://www.fire.uni-freiburg.de/iffn/country/id/id_32.htm>.

[2] Asian Development Bank (2001), Fire, Smoke, and Haze: The ASEAN Response Strategy, Manila: Association of Southeast Asian Nations/Asian Development Bank, accessed at: <https://openaccess.adb.org/bitstream/handle/11540/307/fsh.pdf?sequence=1>.

[3] Van der Welde, B (2014), ‘Haze returns to Singapore – and we can expect more of it, new study warns’, Forests News, Bogor: Center for International Forestry Research, accessed at <http://blog.cifor.org/24238/haze-returns-to-singapore-and-we-can-expect-more-of-it-new-study-warns#>

[4] Lee, P. O (2013), ‘No end in sight to haze dilemma’, ISEAS Perspective, Vol. 39, 23 June, accessed at <http://www.iseas.edu.sg/documents/publication/iseas_perspective_2013_39_no_end_in_sight_to_haze_dilemma.pdf>

[5] Chong, Z. Y and J Chen (2014), ‘Corporate responsibility moving up Asian governments agenda – Singapore’s Transboundary Haze Pollution Bill’, CSR ASIA Weekly, accessed at <http://csr-asia.com/csr-asia-weekly-news-detail.php?id=12364>

[6] Chong, Z. Y and J Chen, above n 5.

[7] Gaveau, D and M. A. Salim (2013), ‘Research: Nearly a quarter of June fires in Indonesia occurred in industrial plantations’, Forests News, Bogor: Center for International Forestry Research, accessed at <http://blog.cifor.org/18218/research-nearly-a-quarter-of-june-fires-in-indonesia-occurredin-%20industrial-%20plantations?utm_source=Fire+research+landing+page&utm_medium=bellow+story&utm_campaign=F%20ire+research+Package#>

[8] World Resources Institute (2014), Indonesia Forest Fires Resource, accessed at <http://www.wri.org/topic/indonesia-forest-fires>.

[9] Tan, A (2005), ‘The ASEAN Agreement on Transboundary Haze Pollution: Prospects for Compliance and Effectiveness in Post-Suharto Indonesia’, Environmental Law Journal, Vol. 13, 647-722.

[10] Tacconi, L, Jotzo, F and Q Grafton (2008), ‘Local causes, regional co-operation and global financing for environmental problems: the case of Southeast Asian Haze pollution’, International Environmental Agreements: Politics, Law and Economics, Vol. 8, No. 1.

[11] Tacconi, L (2003), ‘Fires in Indonesia: Causes, Costs and Policy Implications’, Working paper no. 38, Bogor: Center for International Forestry Research, accessed at <http://www.cifor.cgiar.org/fire/pdf/>.

[12] Sandler, T (1997), Global Challenges: An Approach to Environmental, Political, and Economic Problems, Cambridge University Press: Cambridge.

[13] Tacconi, L, Jotzo, F and Q Grafton, above n 10.

[14] Quah, E (2002), ‘Transboundary pollution in Southeast Asia: The Indonesian Fires’, World Development, Issue no. 30, pp 429-441.

[15] Tacconi, L, above n 11.

[16] Lee Kuan Yew School of Public Policy (2014), ‘Transboundary Haze: How Might The Singapore Government Minimise Its Occurrence’, Working paper 1, accessed at <http://lkyspp.nus.edu.sg/wp-content/uploads/2014/01/Transboundary-Haze.pdf>.