System Dynamics Model Development for Evaluation of theMoratorium Policy on New Forest and Peatland Concessions under Bilateral Cooperation in Indonesia: Palm Oil Industry Sector Case Study

In this study, we aim to develop a system dynamics model to provide analysis on the impact of the moratorium policy on the new forest and peatland concessions under the reducing emissions from deforestation and forest degradation cooperation in Indonesia’s economy and environment. A scenario-based approach was conducted using system dynamics modeling to extrapolate two basic scenarios of with and without the moratorium policy. The results demonstrated that the policy noticeably reduces carbon dioxide emissions from deforestation. However, the reduction is only temporary, and the emission trend under the moratorium policy scenarios would eventually return to the business as usual level. By contrast, Indonesia would face a trade-off between emission reductions and economic growth. Because of the policy implementation, Indonesia should be prepared to weather the economic slowdown. Furthermore, the slowdown effect would last sufficiently long when compared to the policy period.