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Return of the Haze

This article is part of Suite101's celebration of Earth Day. Please read Suite101's other articles on Earth Day as well.

Indonesia is burning again. Last fall, forest fires across huge tracts of land in Borneo forced businesses and schools to close, killed crops, scared tourists, and caused tens of thousands to become ill with respiratory diseases. The monsoon rains helped fight the fires, but they have once again flared, with between 80,000 and 100,000 hectares of land on fire in about 500 locations throughout Borneo. The costs of the fires have been put at over $5 billion US dollars, money that Indonesia can ill afford right now, thanks to the ongoing currency crisis.

The fires represent an environmental disaster caused completely by human greed, ignorance, and stupidity. The weather patterns of El Nino made last year's monsoons too light and too late to fight the fires effectively. But Indonesian officials blaming El Nino are only desperately trying to place blame somewhere other than where it belongs: squarely on the shoulders of the Indonesian government.

Indonesia has allowed hundreds of companies to clear forestland simply by burning it, an absolutely mind-boggling waste of natural resources. Even if the forests were chopped and sold as timber, at least some economic gains could be achieved for the high environmental costs of clearing timberland. Yet Indonesia allowed companies, even granted permits, to clear the land through a destructive and risky method that has ignited not just wide blazes, but tensions in Southeast Asia.

The thick, choking smog created by the fires, euphemistically known as "haze," has blown into Malaysia and Singapore, causing thousands to fall ill. After harsh criticism from these and other Southeast Asian nations, the Indonesian government belatedly took action, and revoked the permits of 144 companies engaged in timber clearing. ASEAN designed a plan to fight the haze through improvements to its fire-fighting capabilities, as well as developing better strategies for monitoring potential hotspots.

Then, as the monsoon rains finally fell in December, it seemed as if the problem was about to disappear. According to an article in the March 26 Japan Times, the Indonesian government even reinstated many of the permits to clear the land a few weeks later. Predictably, as soon as the weather became hot and dry again, the fires flared out of control. Over 2,000 people in one province alone, East Kalimantan, are seeking treatment for respiratory problems.

Indonesia is struggling to convince the world that its government is one of laws, not of men. It is attempting to convince the IMF that loans will not be squandered, and that it can behave responsibly. By choosing the short-term interests of profit-hungry farmers who need the cleared land over long-term environmental good, Indonesia is failing this test. How can we trust them to allow bankrupt financial institutions to fail, when the government cannot even face the prospect of a few failing farmers?

It is tempting to blame the farmers. After all, they are the ones burning down the trees in the first place. But it is understandable that a farmer would burn down pristine forest for his own selfish gain. Each farmer wants to maximize his own self-interest by burning down trees for fertile land. In fact, land clearing may even produce rich profits with minimal environmental damage, if only a limited number of farmers do it.

The Indonesian case is a classic example of the theory of the "tragedy of the commons." All the farmers work in their own self-interests, and each by himself probably profits, but they do not contribute to the common good, and actually undermine it in several ways. The thick cloud of smog has produced not just lung problems, but all the secondary effects: raised tensions with neighbors, a loss of credibility in the international community, and a serious blow to Indonesia's usually booming tourist industry.

These financial impacts should be enough for any nation to rethink its forest clearing policies. But Indonesia's blatant disregard for human life and safety should be all the more reason to revoke clearing licenses, and to punish severely those companies who have abused their permits. In the past, Indonesia has been focused on the short-term bottom line, and has thus been unwilling to take such extreme measures. In the long run, though, the harsher impacts are clear. The fact that the government cares more for the farmers who would burn down Indonesia's forests then the average Indonesian forced to breathe unsafe air is a strong indication that Indonesia's priorities are in desperate need of rethinking.

The current social instability in Indonesia does not mix well with the smog. Suharto recently issued a new ban on protestors, many of whom are protesting the government's lack of leadership on the haze issue (in addition to the usual protests, such as protesting the lack of democracy, barriers to freedom of speech, and restrictions on the freedom of assembly). After the collapse of the rupiah, in which people saw their life savings suddenly cut by up to 70% for reasons beyond the control of most Indonesians, many were understandably upset. Even more upsetting is the widespread perception, partially justified, that the IMF is bailing out banks and rich businessmen, and ignoring the plight of the common man. The combination of public sentiments is fomenting dissatisfaction at best, revolution at worst. Add to this explosive situation the smog that removes the most basic right of all -- the right to breathe. The result is the very frightening and very real possibility that social unrest and riots will increase in frequency and intensity through the summer.

Avoiding the tragedy of the commons is the responsibility of government. Individuals should ideally refrain from overuse of natural resources, but each individual perceives that he cannot do much significant damage himself, few voluntarily restrict their personal pollution output. Many companies think the same way. Corporate environmental disasters like Bhopal and Minamata notwithstanding, most argue that by themselves, they do not cause significant damage, and thus do not voluntarily restrict their pollution output. Government is the only agency that can force companies to restrict their pollution output in a democratic nation.

There are several policy options for governments to address environmental abuse. One option is to simply set ceilings on pollution levels for individual companies or industries. Another option involves the use of tax incentives for companies to limit their pollution, basically allowing companies to pollute as much as they want, but forcing them to pay for it. Both of these options should be applied where necessary, even if they incur some economic cost or force job loss.

A third option, gaining popularity in the wake of the Kyoto COPIII accord signed last December, is the concept of "pollution credits," where each country is assigned a certain "allowable pollution," and if it exceeds that pollution, it faces strict fines. Nations that do not need to pollute that much can sell their pollution credits to nations that do, so that the total amount of pollution remains constant. That amount can be reduced gradually over years and decades, which will put an economic premium on pollution, raising the prices of the pollution credits, and thus forcing companies to innovate in order to reduce pollution.

The pollution credits theory makes some sense, but it faces two difficulties. The first is in the initial allocation of the credits. No nation will receive as much credit as they think they need, and a compromise plan, one that actually does significantly reduce overall pollution, is a pipe dream. Many developing nations are heavy polluters, but their economies would be greatly harmed by pollution cutbacks. These nations were essentially omitted from COPIII, since they refused to sign an environmental treaty that would undermine their economies, and their pollution levels will not be cut because of the treaty. If they could not compromise to a relatively soft treaty like COPIII, it is unlikely that developing nations will want a system of pollution credits, which rewards rich nations by allowing them to buy pollution, and punishes poor nations that cannot afford their environmental damage.

The second difficulty of the pollution credits plan is the moral quandary. The system may make fiscal sense, but it would sell off parcels of the earth to despoil, and place a price on a clean environment. The co-existence of capitalism and environmentalism must be reconciled, but forcing environmentalism to exist solely within a capitalist framework risks an alienation of environmental principles. As Indonesia is discovering, no price can be placed on clean air. As soon as we have to place a price on clean air, we have failed in our bid to protect our living environment, and we have failed in our attempt to secure the most basic human rights. If we in the developed world fail in this, we are no better than those developing nations that restrict the rights to freedom of speech and assembly. In fact, we are worse: we may protect freedom of speech but ruin the environment, and one cannot breathe freedom of speech.

In light of all the above potential policies and prescriptions, Indonesia is responding to the latest crisis with its usual degree of responsible, forward thinking. Indonesian officials are asking journalists not to report on the haze.

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