Incentivizing compliance: Evaluating the effectiveness of targeted village incentives for reducing burning in Indonesia

Abstract

Periodic peat and forest fires in Sumatra and Kalimantan result in haze that blankets Indonesia and neighboring countries, with effects on human health, the environment and the economy. Although the prevailing approach for preventing and reducing the incidence of fire in Indonesia is regulatory, village-level incentive schemes have been trialed by agribusinesses and pulp and paper companies to prevent burning. In this article, we review one integrated incentive program for villages launched by a pulp and paper company in Riau, Sumatra, in 2015. As part of the study, we surveyed six of the villages that participated in the first year of the program as well as six non-program villages, complemented by spatial analyses of hotspots and burn scars. Our analyses show a declining pattern of burning in the years prior and including 2015, followed by the almost total cessation of burning in the years after. During 2015, a severe El Niño event, the program villages experienced 40% fewer fires, while in non-program villages, there were 23% more fires. The main reason cited by the villages was the increased awareness of the regulations in force prior to the program. The information about these laws and regulations had been disseminated to program villages, as well as some of the adjacent non-program villages, prior to the commencement of the incentive program. The transition to non-burning livelihoods was enabled by ongoing changes in the landscape to permanent agricultural crops such as oil palm and rubber, as well as non-farming livelihoods. Although the benefits of the program were valued at the community level, the incentives appeared to function as a pathway for incentivizing compliance with prevailing regulations rather than inducing voluntary behaviors. We argue that the current trend for strict environmental regulations undermines the potential for using voluntary incentives. Consequently, we suggest that future incentive schemes should focus on providing agricultural support to smallholders to enable them to adapt to the strict requirements of the environmental regulations in force.