Indonesia is getting into the alternative energy business in a big way – clearing forests and peatlands to make way for oil-palm plantations.

Palm oil is a by-product of the oil palm tree and is used for cooking and as food additives.

More recently, it has been found to be a relatively clean-burning alternative source of energy – biodiesel – a discovery which has pushed palm oil prices up to never-before-seen levels.

Indonesian residents who own oil palm plantations have become better-off, selling more than just fruits.

This discovery of palm oil as biodiesel could also be seen as beneficial to the rest of the world, given how we can become a tad bit less reliant on fossil fuels.

But would you still be jumping for joy if you found out forests are being burnt down to create space for oil palm plantations, or that Indonesia's deforestation is among the highest in the world?

A recent issue of Time Magazine wrote that “burning and clear-cutting not only eliminates one of the planet's crucial air-filtration systems, the process also releases even more carbon dioxide into the air, in smoke or as gases released during the decomposition of forest waste.”

You can imagine the irony then, when Bali hosted world leaders in a climate-change discussion over the last week.

There are a few reasons climate-change is really a long and winding road.

First, it is tough for businesses to be both economically responsible and philanthropic at the same time.

Being economically responsible means being economically efficient, and generating the most returns for shareholders. Most companies get the most out of their operations in developing countries, using cheaper labor and less energy-efficient technology. Even if some businesses want to make the shift to environmentally-friendly technologies, anticipating how much more profitable competitors will be using cheaper technologies would probably keep them from going ahead with their plans.

Second, the world's three largest emittors of greenhouse gases are playing the blame game and pushing the onus onto one another.

According the Wall Street Journal, “China wants developed nations like the US to share cutting-edge renewable-energy technology with the developing world at reduced costs,” but American companies do not want to sell these technologies at “cut-rate prices”. US officials may also be worried that “innovative technologies” deployed to China could be copied.

The latest climate change pact adopted in Bali (after rounds of negotiations) was a vague “we'll-do-our-best” agreement.

So what can be done to have all countries jump onto the climate change bandwagon?

For starters, the five permanent members of the United Nations should ratify any climate change protocols.

The United Nations should then mandate that all member nations do so as well.

Because only a global change in mindset and way of doing things can ensure that everyone plays their part in climate change, without anyone losing out because of it.

For investors, perhaps we should be a little more philanthropic in our investments and invest in businesses that make efforts to reduce carbon emissions in their operations.

We should also find out if alternative energy companies are conducting their businesses ethically before we consider investing in them.

Returns from such evironmentally- and ethically-responsible companies may not be as lucrative as those that employ cheaper means, but treat the extra amount you could have gotten as an investment in your future.

After all, the earth is your home too.

And you sure wouldn't want to be worrying about excessive exposure to UV rays every time you step out of the house because of the huge hole in the ozone layer.

Serene Lim

Labels: climate change, deforestation