**Author details**

*Land Use Change and Sustainability*

and BAU + Palm Oil scenarios.

because the profit margins remain low.

**4. Conclusions**

degraded peatlands.

oil production.

development.

ronmental costs.

under the Jelutung scenario as compared to the high peatland emissions under BAU

For policy makers, this means that an increase in carbon prices will result in more favorable conditions—higher profit—for GE/Jelutung scenarios and an increase in the costs of BAU/BAU and oil Palm ones. As carbon prices increase, these results become more distinct and would encourage a change in policies. Yet, if national policy makers remain reluctant in adopting sustainable policy options with carbon pricing incentives, local government, the private sector, and local communities will not be incentivized to transition to the GE and/or the Jelutung scenario,

The assessment carried out with KT-GEM has pointed out that the BAU scenario and the continuation of palm oil expansion are not only best performers concerning economic profitability, but also lead to the highest variability in revenues, leading unsustainable social as well as environmental outcomes. When these outcomes are valued economically, taking a societal perspective, the BAU, and oil palm expansion are not economically viable. In fact, with increased emissions, fire and land subsidence, the BAU, and palm oil expansion scenarios will continue to cause significant economic damage to the communities of Central Kalimantan and beyond, negatively affecting the health of both Indonesian population as well as those in adjacent countries. Further, when taking land subsidence into account, expanding plantations across the peatlands is unlikely to be feasible beyond 50 years, which calls for a different approach to the utilization of the

The Jelutung and GE scenarios are less profitable than palm oil development when relying on traditional economic indicators, such as GDP. On the other hand, if the transformation of current practices into paludiculture development on peatland are coupled with strengthening market access for these products, and if the lower profitability of jelutung cultivation—and many other paludiculture species compared to palm oil could be improved by implementing investments in jelutung across the value chain, the efficiency and profitability of jelutung production is expected to improve and it may be turned into a more viable alternative than palm

The KT-GEM Peatland model has shown that sustainable peatland management as included under the GE and Jelutung scenarios have a positive impact on Green GDP in Central Kalimantan and will be essential for achieving sustainable economic growth. Further, since the sustainable management of peatland also reduces fire risks and emissions, this scenario would contribute to the ambitions of a haze-free ASEAN by 2020 and Indonesia's emission reduction target. Indonesia has a lot to gain from restoration with paludiculture species in relation to reduced fires, health impacts, emissions, and potential for other forms of community-based

Despite its limitations, the KT-GEM Peatland Module and Green GDP calculations provide interesting insights for policy makers, especially in finding solutions to the fire problem and exploring policy options for peatland rehabilitation. It further demonstrates the impact of natural capital change on economic growth and supports a better understanding among policy makers that current GDP calculations are not adequate. It shows that building environmental resilience can not only maintain natural resource assets, but also lead to lower social and envi-

**88**

Andrea Marcello Bassi, Johan Kieft\*, Esther Boer, Teuku Mahfuzh Aufar Kari, Evi Wulanddri and Ludvig Forslund KnowlEdge Srl, Italy and Stellenbosch University, South Africa

\*Address all correspondence to: johan.kieft@un.org

© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
