The “Real” Price of Palm Oil

Abstract

The expansion of palm oil production in South East Asia resulting from an increased concern for future energy supply has raised much controversy. Much current research focuses on the impact of palm oil production on levels of carbon emissions, but little is known about the impact of palm oil production on food scarcity. This research conducts a cost-benefit analysis in order to price the “real” cost of palm oil that has been derived from a plantation that replaces food production. This paper concludes that palm oil production threatens global food security instead of solving the problem of future world energy supply.

Key words: Cost-benefit analysis, biofuels, global food security, future energy supply, environmental economics, palm oil industry