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The Business Times: Uncertainties Remain About the Return of the Haze this Year

10 May The Business Times: Uncertainties Remain About the Return of the Haze this Year

In recent weeks Thailand, Myanmar, and Laos suffered dense and unhealthy air pollution caused by land and forest fires. Weather forecasts are uncertain, but there is a chance the problem will persist and spread, impacting even more countries in the region.

Malaysia is already experiencing bouts of haze. On Apr 18, air pollution indicators briefly spiked into the unhealthy range in parts of the country. While the situation remains under control, health authorities cautioned residents to limit their time outdoors and mask up if the haze gets worse. The Malaysian minister for natural resources, environment, and climate change, Nik Nazmi, has confirmed that the haze stems from open burning, citing anti-burning measures that Malaysia has taken in recent weeks.

Thus far, others in Asean – including Singapore and Indonesia – have not been affected. Currently, the weather in the southern parts of Asean is still relatively wet, with occasional heavy wind and rain. However, the weather pattern is shifting, with increasing heat and dry spells expected to worsen by May or June.

The prospects that fires and haze will return to the region is real, and bears attention by all parties. Already the Indonesian president Joko Widodo has called for action. He has told local law enforcement officials that they would be held accountable and dismissed if large fires occur in their provinces. The country’s minister for environment and forestry Siti Nurbaya Bakar issued a similar stern warning to companies, making it clear that legal action will be taken if they do not do enough to prevent or suppress fires on their land.

Hot and dry weather increases haze risk

It has been some time since southern Asean last suffered a major haze problem. Since 2019, the skies have largely been blue. Wetter-than-usual weather helped. So did Indonesia’s actions to address any fires early, and to develop institutions and policies that gave more emphasis to conservation. The Jokowi administration has, with good reason, cited this as one of its achievements.

Most meteorological projections agree that this year’s weather will be hotter and drier than the last three wet years. The question is how severe the shift will be. At the moment, experts are seeing a 60 per cent chance of El Nino this year, so there is some risk that the region’s recent good record on fire management may go up, literally, in smoke.

Demand for commodities and deforestation

This should not be a fatalistic forecast. Weather is only part of the haze equation. While some forest fires occur naturally, many stem from human causes. Some deliberately set fires as part of slash-and-burn practices to clear land to expand farms and plantations, or replant existing cultivated areas. Others neglect to take early and sufficient prevention measures, or fail to respond quickly enough when fires break out.

Many of the larger companies have changed and shifted from such practices to ensure that their plantations are fire-free, and even actively conserve forests within their concessions. Yet not all have reformed, and there is still potential for abuse from bad actors, especially small- and medium-sized operators. There are gains to be made from illegal and unsustainable practices. Many growers transact below the radar, selling their products to what is termed the leakage market in commodities.

More broadly, the expansion of South-east Asia’s plantation sector has been driven by the global demand for agricultural and forest commodities, such as cocoa, coffee, palm oil, rubber, and wood. Commodity prices surged during the Covid-19 pandemic and the reopening of economies since, combined with the economic fallout of the ongoing Russia-Ukraine war, has driven prices even higher.

The price of palm oil, a major product of Indonesia and Malaysia, hit record highs in 2022. Palm oil prices have since stabilised, but are still heightened, hovering around US$970 per tonne compared to pre-pandemic levels of US$600 per tonne.

At present, while the risk is rising, there is no evidence that heightened commodity prices have resulted in more fires and greater deforestation. In the past few years, deforestation in Asean has trended downward, even as commodity prices have skyrocketed. However, this may not remain the case. Much depends on political will from governments and sustainability commitments from the private sector.

Sustainability commitments are key

Asean countries are seeking to establish their credentials as leaders in sustainability. Nearly all Asean member states have adopted carbon neutrality or net-zero targets. These pledges will hinge on keeping forests and other ecosystems intact as a source of carbon sequestration rather than allowing them to be set ablaze. Indonesia and Malaysia have both increased their national commitments and efforts against deforestation and to prevent the fires and haze.

International attention is growing. Buyers of commodities are subjecting plantation products and the resource sector to greater scrutiny. Consumers, banks and investors now look at environmental considerations in tandem with profitability.

Other countries too are acting. In December, the European Union’s governing institutions agreed on a new regulation that will bar the import and export of goods linked to recent deforestation, defined as deforestation that has occurred after December 2020. This has been controversial with Indonesian and Malaysian officials. They cite concerns that many smaller producers and smallholder farmers will not be able to meet the strict auditing requirements set by Europeans.

Despite these and other differences, we hold out the prospect that cooperation can constructively move all the relevant stakeholders forward on pathways to sustainability. The haze, if nothing else, reminds us that it is Asians who suffer first and foremost from unsustainable practices in our region. The progress of these last years too shows that a committed administration can make a real and positive difference – as the Jokowi administration has in Indonesia.

Each year for the past decade, the Singapore Institute of International Affairs (SIIA) has convened the Sustainable World Resources dialogue in Singapore to bring together key stakeholders from governments, the private sector and non-government organisations to examine how to stop the haze and move the plantation and commodities sector towards sustainability. In the last four years, the SIIA’s annual Haze Outlook report has assessed the risk of severe haze returning. That assessment is based on weather forecasts as well as qualitative analysis of how governments and corporations in the sector are responding.

The last few years have seen improvements in the way the problem and risks are managed. But some underlying issues remain. Our Haze Outlook report for 2023 is still being finalised, but the recent reports from Malaysia of some fires and haze, even before the usual dry season, are casting a darkening prospect.

Simon Tay is chairman of the SIIA, where Aaron Choo is senior assistant director, special projects and sustainability, and Khor Yu-Leng is associate director. The SIIA convened the 10th Singapore Dialogue on Sustainable World Resources on 9 June 2023.

This article was first published in The Business Times on 10 May 2023.