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Decision and Policy Analysis Research Area – DAPA

The bitter-sweet taste of Indonesia’s chocolate

Cocoa, the raw ingredient in chocolate.

Cocoa, the raw ingredient in chocolate.

An environmental disaster is unfolding in Asia. The “haze” plumes of smoke from Indonesia, where El Nino has stirred up more peatland fires, have since September topped daily emissions in the US, with the smog stretching to nearby countries.

During 1997, one of the worst years on record, the annual fires cost the government an estimated US$20 billion – not to mention billions lost in healthcare and disrupted travel costs. Around 70 percent of the country’s greenhouse gas emissions are from agriculture, livestock; fishery and forestry activities – the majority from forest and peat clearance – mostly to plant palm oil – releasing carbon dioxide.

In the run-up to the United Nations conference in Paris, where it’s hoped nations will agree a global deal to act on climate change, Indonesia has pledged emission cuts of 29 percent by 2030 from current rates, and more if it receives financial support. But the haze is a complex problem and there are no single solutions.

A sticky fix: chocolate demand is up

Protecting the forests is one thing; helping farmers earn a living so they don’t destroy the forest is another. In comparison to energy, transport and construction sectors, Indonesia’s land and forestry sector lags behind in tackling emissions. The biggest culprit is undoubtedly palm oil.

But unfortunately for chocolate-lovers, cocoa is up there too. Demand for chocolate is on the rise in Asia, and Indonesia is the world’s third largest cocoa producer. That demand is not likely to disappear, and more cocoa could lead to more deforestation if it’s not managed well.

Although agroforests from cocoa maintain high levels of biodiversity, they cannot replace primary forest. And with high levels of fertilizer and pesticide used in cocoa production, making chocolate sustainable is a major concern. Who wants to make a guilty treat for sustainable-savvy consumers more guilt-ridden?

Smallholder farmers, who produce more than 80 percent of Indonesia’s cocoa, need to gain from any initiative to reduce emissions. Planting trees for carbon offsets doesn’t wash anymore – that’s often seen as nothing more than sustainability lip-service.

Enter insetting. Basically, this is a process of embedding sustainable activities directly into the cocoa supply chain of large companies, rather than paying for offsetting. Reducing costs – and GHG emissions – within direct supply chains of chocolate companies: that’s a more robust approach.

But will it work?

Chocolate demand is up in Asia.

Chocolate demand is up in Asia. Pic credit: Neil Palmer/CIAT

It’s a striking fact that multinational exporters, processors and manufacturers sourcing cocoa beans in Indonesia don’t know what their carbon footprint is – at a value chain, sector or product level. That will have to change: recent deals show that sustainability is affecting bottom-lines and billion-dollar business.

Paving the way for product branding as low carbon or carbon neutral, carbon insetting can help the private sector claim premium prices – which should get back to farmers in the form of improved services and benefits. That involves analyzing agricultural practices that best tackle emissions.

It’s complicated because some agricultural systems have a higher carbon storage capacity than others, and that depends on everything from temperature and rainfall in specific locations to soil type. And then those best practices have to be communicated to farmers.

Cool tools and Big Data

In the words of big data revolutionaries: “You can’t manage what you don’t measure.” Insight into what agricultural practices enhance or deplete carbon stocks is the first step to manage and make carbon credit schemes.

CIAT is using a method to assess GHG emissions on thirty plots in thirty production systems using cool tools – literally The Cool Farm Tool – to measure GHG emissions for the whole cocoa sector. That’s big. The tool already exists, but it does not include data for trees used in cocoa production.

“What we do is incorporate and analyze the COCOATRACE database to assess carbon stock and footprints for the entire cocoa sector in Indonesia,” said Peter Läderach, leader of the Climate Change Program at CIAT. “With a database of 60,000 farmers, this is the most amazing sample that will ever come across.”

It will take a vast set of data into account: fertilizer and pesticides use; waste management; transportation; forest data to see which species can increase carbon stocks above and below-ground; current practices.

Indonesia’s government has pledged US$95 million to revitalize the cocoa sector and double national output in two years. Yet the country is already far behind other cocoa-producing countries in realizing its export potential. Even cocoa farmers are switching to more lucrative crops like palm oil.

Industry players know they have to adapt to change. With extreme weather likely to affect production in future, insight is key to environmental sustainability.

CIAT is also exploring climate exposure maps for cocoa-growing areas in Indonesia to determine future climate vulnerability – as has already been done in West Africa.

These efforts should make for a sweeter chocolate treat – if not one that’s entirely guilt-free.

Download CIAT’s cocoa briefs on cocoa in Indonesia:

Nationally Appropriate Mitigation Actions and carbon insetting

Exposure maps: cocoa suitability 

Understanding carbon footprint and GHG emissions

Data to understand adoption of improved cocoa production practices

Up-scaling Climate Smart Agriculture 

Links to related blog posts:

The bitter taste of chocolate: Esri mapping 

Building climate-resilient cocoa chains in Ghana

Soil stewardship to climate-proof Ghana’s cocoa sector

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