An analysis of the impact of CIFOR’s research on Indonesia’s pulp and paper sector suggests that it has helped to save about 135 000 hectares of natural rainforest from destruction. It is impossible to put an exact figure on the economic benefits, but a plausible estimate suggests it could be US $133 million. That’s six times more than CIFOR’s annual research budget.

In the late 1990s, CIFOR researchers identified a major problem for Indonesia’s natural forests: pulp and paper companies were expanding their processing capacity at a much faster rate than they were bringing plantations online. To meet their fibre needs they were felling larger and larger areas of virgin forest. Research revealed that the industry was benefiting from a range of subsidies, including access to wood from state land at virtually no cost, as well as the use of the reforestation fund to finance pulp mill development. Massive loans from national and international investors were fuelling the expansion of the industry, with lenders accepting the companies’ exaggerated claims that they would soon be able to satisfy their needs with plantation wood.

‘The Raitzer study represents the most significant attempt to incorporate environmental values into an epIA [ex post impact assessment] yet seen in the CGIAR.’

CGIAR Science Council report

CIFOR’s research, led by policy scientist Chris Barr, provided civil society organisations with the data and analysis they needed to campaign for reforms of the pulp and paper industry. They put pressure on foreign pulp buyers, some of whom withdrew their orders. These developments encouraged the Ministry of Forestry to introduce a decree to increase the rate at which pulpwood plantations were established. As a result of these and other measures, companies such as Asia Pulp & Paper (APP) and Asia Pacific Resources International Ltd (APRIL) began to increase the areas they set aside for conservation and to accelerate their plantation programmes.

These are good outcomes. But to what extent can they be attributed to CIFOR’s research? And what were the economic benefits that flowed from changes in behaviour and policy?

For one thing, shifts in policy often take place as a result of a range of different activities and influences, making it difficult to identify the precise contribution of research. For another, shifts in stated policy can mean many different things on the ground.

‘It’s not like crop genetic improvement research, whose impact is relatively easy to measure, as adoption can be physically tracked, relatively unambiguously attributed and consistently linked to benefits,’ explains CIFOR impact assessment scientist David Raitzer. ‘For example, a study of research on the genetic improvement of wheat showed that it delivered economic benefits of US $3 billion a year, and could do so based on secondary data sources.’

1. The pulp mill factory of PT Riau Andalan Pulp and Paper in Riau.
   Photos by Ryan Woo
2. Harvested wood of the Acacia mangium tree at the PT Riau Andalan Pulp and Paper concession area in Kampar District, Riau, Indonesia.
   Photo by Ryan Woo

‘Even if you take the most conservative assumptions, the research has led to savings of US $19 million, and that alone would justify one year of the current expenditure on CIFOR.’

David Raitzer
CIFOR impact assessment scientist

Other impact assessments of crop research conducted by the Consultative Group on International Agricultural Research (CGIAR), for example on rice improvement and the control of cassava mealy bug, were also able to provide precise figures of their considerable economic benefits.

Contrast this with a CGIAR Science Council review of 24 impact assessments of policy-oriented research projects conducted prior to 2006. Only three of these provided estimates of their economic benefits, which amounted to just US $200 million, or 25 per cent of a conservative measure of the entire CGIAR investment in policy-oriented research up to 2004. This lack of clear quantitative evidence prompted the Science Council to commission seven further case studies, including one by Raitzer on CIFOR’s research on the pulp and paper industry.

Raitzer decided to investigate three main impact pathways: increases in the area of forest land set aside for conservation by companies; increases in the use of fibre from plantations; and the extent to which companies did not expand their processing capacity as a result of CIFOR’s research. He interviewed 31 informants in the industry, government and civil society, and they confirmed that Barr’s research has had a considerable influence.

For example, APP and APRIL have set aside large areas of forest land for conservation. They have also rapidly increased the amount of land under plantations, partially as a response to a ministerial decree, and partially as a response to the demands of buyers and creditors influenced by advocacy. APRIL officials credited CIFOR and advocacy by non-governmental organisations (NGOs) with virtually all improvements in sustainability made since 2001; and the NGOs confirmed that Barr’s research was essential to obtaining environmental commitments from APP and APRIL.

The campaigns and policy reforms that benefited from CIFOR’s research helped to save large areas of pristine forest from destruction, either directly through conservation commitments, or indirectly through the substitution of plantation wood for natural forest wood and the reduction in demand for wood from natural forests. This has protected biodiversity and valuable watershed services, such as the provision of clean water for agriculture and human consumption. It has also ensured that large quantities of carbon that would have been released into the atmosphere, had the forests been felled, remain safely locked up. Indeed, the main economic benefits of CIFOR’s pulp and paper research largely derive from the reduction in carbon emissions through averted forest loss.

Putting a figure on this, as Raitzer points out, is exceptionally tricky.

‘It all depends on the assumptions you make,’ he says. For this study he came up with three scenarios of assumptions for everything from the contribution of research, to the effects of commitments made and the values of non-market benefits. Using the most conservative, he estimates that the research has generated benefits of US $19 million a year, equivalent to CIFOR’s entire annual budget. At the other extreme, using the most liberal assumption, the benefits could be in the order of US $583 million a year. Using his main assumption, the benefits come to US $133 million a year. As the total cost of the research conducted by Barr and his colleagues comes to US $500 000 at most, this is an exceptional return on investment, even if we use the most conservative assumption.

Prior to Raitzer’s study, Chris Barr did not have a clear idea of the precise impact of his research, in terms of avoided natural forest clearance and the financial benefits associated with it.

‘It has been a real eye-opener for me to see the impact quantified,’ says Barr. ‘I think that this is a clear affirmation of the value of organisations like CIFOR working on trade and investment issues.’

See http://www.cifor.cgiar.org/publications/pdf_files/Books/BRaitzer0801.pdf.