Economic Transformation And Ecological Pressures: Determinants Of Deforestation On The Island Of Kalimantan
Keywords:
Tree Cover Loss, Deforestation, Oil Palm Plantation Expansion, Coal Mining, Economic Growth.
Abstract
Deforestation in tropical regions remains a critical environmental challenge, particularly in resource-rich areas where economic development is strongly associated with land-intensive activities. Although economic growth is often considered a driver of environmental degradation, empirical evidence suggests that the relationship between economic expansion and forest loss depends on the structure of economic activities. This study aims to investigate the determinants of tree cover loss in Kalimantan Island by examining the effects of coal mining contribution, oil palm plantation expansion, and regional economic growth. Using provincial panel data from Kalimantan during the period of 2015–2024, this study employs a panel data regression approach based on the Random Effect Model (REM). The dependent variable is annual tree cover loss, while the explanatory variables include the contribution of coal mining to regional GDP, oil palm plantation area, and Gross Regional Domestic Product (GRDP). The empirical results reveal that oil palm plantation expansion is the most influential determinant of forest loss, showing a positive and statistically significant relationship with tree cover loss. This finding indicates that land conversion associated with agricultural expansion remains the primary pressure on forest ecosystems in Kalimantan. Meanwhile, coal mining contribution exhibits a positive but marginal relationship with forest loss, suggesting that extractive activities may increase environmental pressure through direct land conversion and infrastructure development, although the effect is sensitive to governance conditions. In contrast, GRDP does not show a statistically significant effect, indicating that economic growth alone does not necessarily translate into higher deforestation when growth originates from less land-intensive sectors. This study contributes to the environmental economics literature by demonstrating that forest loss in resource-rich regions is shaped more strongly by the composition of economic activities than by aggregate economic growth. The findings highlight the importance of sustainable land-use governance, responsible palm oil development, improved post-mining rehabilitation, and economic diversification strategies to achieve a balance between regional development and forest conservation.
References
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Widiono, S., Supriyono, B., Hakim, L., & Muluk, M. R. K. (2024). Oil Palm Plantation Expansion and Population Problems: An Explanatory Factor for Deforestation in Indonesia. Dynamics of Rural Society Journal, 2(2), 76–88. https://doi.org/10.37905/drsj.v2i2.50
Widiono. (2024). Analysis of the Impact of Plantation Expansion on Deforestation in Indonesia. Forest Research Journal, 7(1), 10–19. https://doi.org/10.26760/jrh.v7i1.10-19
York, R., Rosa, E. A., & Dietz, T. (2003). STIRPAT, IPAT and ImPACT: Analytic tools for unpacking the driving forces of environmental impacts. Ecological Economics, 46(3), 351–365. https://doi.org/10.1016/S0921-8009(03)00188-5
Akhmadi, K., dkk. (2024). Land use and land cover dynamics in Belitung Island, Indonesia. Heliyon, 10, e33291. https://doi.org/10.1016/j.heliyon.2024.e33291
Anwar, M. A., Zhang, Q., Asmi, F., Hussain, N., Plantinga, A., Zafar, M. W., & Sinha, A. (2022). Global perspectives on Environmental Kuznets Curve: A bibliometric review. Gondwana Research, 103, 135–145. https://doi.org/10.1016/j.gr.2021.11.010
Austin, K. G., Schwantes, A., Gu, Y., & Kasibhatla, P. S. (2019). What causes deforestation in Indonesia? Environmental Research Letters, 14(2), Article 024007. https://doi.org/10.1088/1748-9326/aaf6db
Badan Pusat Statistik. (2025). Gross Regional Domestic Product of Provinces in Indonesia by Economic Sector 2020–2024. Badan Pusat Statistik. https://www.bps.go.id
Barbier, E. B. (1987). The concept of sustainable economic development. Environmental Conservation, 14(2), 101–110. https://doi.org/10.1017/S0376892900011449
Bashir, M. F., Ma, B., Bashir, M. A., Bilal, & Shahzad, L. (2021). Scientific data-driven evaluation of academic publications on Environmental Kuznets Curve. Environmental Science and Pollution Research, 28(14), 16982–16999. https://doi.org/10.1007/s11356-021-13110-6
Carlson, K. M., Heilmayr, R., Gibbs, H. K., Noojipady, P., Burns, D. N., Morton, D. C., Walker, N. F., Paoli, G. D., & Kremen, C. (2018). Effect of oil palm sustainability certification on deforestation and fire in Indonesia. Proceedings of the National Academy of Sciences of the United States of America, 115(1), 121–126. https://doi.org/10.1073/pnas.1704728114
Cisneros, E., Kis-Katos, K., & Nuryartono, N. (2021). Palm oil and the politics of deforestation in Indonesia. Journal of Environmental Economics and Management, 108, 102453. https://doi.org/10.1016/j.jeem.2021.102453
Curtis, P. G., Slay, C. M., Harris, N. L., Tyukavina, A., & Hansen, M. C. (2018). Classifying drivers of global forest loss. Science, 361(6407), 1108–1111. https://doi.org/10.1126/science.aau3445
Dietz, T., & Rosa, E. A. (1997). Effects of population and affluence on CO₂ emissions. Proceedings of the National Academy of Sciences, 94(1), 175–179. https://doi.org/10.1073/pnas.94.1.175
Dong, H., Tao, M., Wen, L., & Poletti, S. (2024). Does natural resource dependence restrict green development? An investigation from the “Belt and Road” countries. Environmental Research, 255, Article 119108. https://doi.org/10.1016/j.envres.2024.119108
Food and Agriculture Organization of the United Nations. (2022). The state of the world's forests 2022: Forest pathways for green recovery and building inclusive, resilient and sustainable economies. FAO. https://doi.org/10.4060/cb9360en
Food and Agriculture Organization of the United Nations. (2024). The State of the World’s Forests 2024: Forest-sector innovations towards a more sustainable future. FAO. https://doi.org/10.4060/cd1211en
Gaveau, D. L. A., Locatelli, B., Salim, M. A., Husnayaen, Manurung, T., Descals, A., et al. (2022). Slowing deforestation in Indonesia follows declining oil palm expansion and lower oil prices. PLOS ONE, 17(3), e0266178. https://doi.org/10.1371/journal.pone.0266178
Gaveau, D. L. A., Santos, L., Locatelli, B., Salim, M. A., Husnayaen, Meijaard, E., Heatubun, C., & Sheil, D. (2021). Forest loss in Indonesian New Guinea (2001–2019): Trends, drivers and outlook. Biological Conservation, 261, Article 109225. https://doi.org/10.1016/j.biocon.2021.109225
Global Forest Watch. (2024). Global Forest Watch: Forest monitoring data platform. World Resources Institute. https://www.globalforestwatch.org/
Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. The Quarterly Journal of Economics, 110(2), 353–377. https://doi.org/10.2307/2118443
Hansen, M. C., Potapov, P. V., Moore, R., Hancher, M., Turubanova, S. A., Tyukavina, A., Thau, D., Stehman, S. V., Goetz, S. J., Loveland, T. R., Kommareddy, A., Egorov, A., Chini, L., Justice, C. O., & Townshend, J. R. G. (2013). High-resolution global maps of 21st-century forest cover change. Science, 342(6160), 850–853. https://doi.org/10.1126/science.1244693
Hariyanti, F., Syahza, A., Zulkarnain, & Nofrizal. (2024). Economic transformation based on leading commodities through sustainable development of the oil palm industry. Heliyon, 10(4), e25674. https://doi.org/10.1016/j.heliyon.2024.e25674
Intergovernmental Panel on Climate Change. (2022). Climate change 2022: Mitigation of climate change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (P. R. Shukla et al., Eds.). Cambridge University Press. https://doi.org/10.1017/9781009157926
Jayachandran, S. (2021). Money (not much) grows on trees: The environmental economics of forest conservation. Journal of Economic Perspectives, 35(3), 113–132. https://doi.org/10.1257/jep.35.3.113
Lambin, E. F., & Meyfroidt, P. (2011). Global land use change, economic globalization, and the looming land scarcity. Proceedings of the National Academy of Sciences of the United States of America, 108(9), 3465–3472. https://doi.org/10.1073/pnas.1100480108
Lawrence, D., Coe, M. T., Walker, W., Verchot, L., & Vandecar, K. (2022). The unseen effects of deforestation: Biophysical effects on climate. Frontiers in Forests and Global Change, 5, 756115. https://doi.org/10.3389/ffgc.2022.756115
Ministry of Environment and Forestry. (2024). Status of Indonesia’s Forests and Forestry 2024. Ministry of Environment and Forestry of the Republic of Indonesia. https://www.menlhk.go.id
Pendrill, F., Persson, U. M., Godar, J., Kastner, T., Moran, D., Schmidt, S., & Wood, R. (2022). Commodity-driven deforestation, associated carbon emissions and trade (Version 2.2) [Data set]. Zenodo. https://doi.org/10.5281/zenodo.5886600
Putri, M. A., Adella, P., Kumalasari, R., Salsabila, C. Z., & Septriani. (2026). Analysis of the Impact of Foreign Direct Investment (FDI) and Regional Gross Domestic Product (RGDP) on Ecological Deforestation in Oil Palm Plantations in Sumatra: A Case Study, 2019–2023. SALAM: Islamic Economics Journal, 6(1), 29–40. https://doi.org/10.24042/y5kq0r35[cite: 3]
Qaim, M., Sibhatu, K. T., Siregar, H., & Grass, I. (2020). Environmental, economic, and social consequences of the oil palm boom. Annual Review of Resource Economics, 12(1), 321–344. https://doi.org/10.1146/annurev-resource-110119-024922
Qaim, M., Sibhatu, K. T., Siregar, H., & Grass, I. (2020). Reconciling oil palm economic development and environmental conservation in Indonesia: A value chain dynamic approach. Forest Policy and Economics, 111, 102089. https://doi.org/10.1016/j.forpol.2020.102089
Ramadhany, N. (2023). The Rate of Deforestation Caused by Mining Activities in East Kalimantan Province. Green Engineering: Journal of Environmentally Friendly Technology, 7(1), 10–19. https://doi.org/10.26760/jrh.V7i1.10-19
Rudke, A. P., de Souza, V. A., dos Santos, A. M., Xavier, A. C., & Martins, J. A. (2020). Impact of mining activities on areas of environmental protection in the southwest of the Amazon: A GIS- and remote sensing-based assessment. Journal of Environmental Management, 263, 110392. https://doi.org/10.1016/j.jenvman.2020.110392
Setiawan, A., Wibowo, A. P., & Rosyid, F. A. (2020). Analysis of the Impact of Coal Exports and Consumption on Indonesia’s Economic Growth. Journal of Mineral and Coal Technology, 16(2), 109–124. https://doi.org/10.30556/jtmb.Vol16.No2.2020.1081
Sonter, L. J., Herrera, D., Barrett, D. J., Galford, G. L., Moran, C. J., & Soares-Filho, B. S. (2017). Mining drives extensive deforestation in the Brazilian Amazon. Nature Communications, 8, Article 1013. https://doi.org/10.1038/s41467-017-00557-w
Stern, D. I. (2004). The rise and fall of the Environmental Kuznets Curve. World Development, 32(8), 1419–1439. https://doi.org/10.1016/j.worlddev.2004.03.004
Supriatna, J., Djumarno, D., Saluy, A. B., & Kurniawan, D. (2024). Sustainability analysis of smallholder oil palm plantations in several provinces in Indonesia. Sustainability, 16(11), 4383. https://doi.org/10.3390/su16114383
Ulucak, R., & Bilgili, F. (2018). A reinvestigation of EKC model by ecological footprint measurement for high, middle and low income countries. Journal of Cleaner Production, 188, 144–157. https://doi.org/10.1016/j.jclepro.2018.03.191
United Nations. (2015). Transforming our world: The 2030 Agenda for Sustainable Development (A/RES/70/1). United Nations. https://sdgs.un.org/2030agenda
Vijay, V., Pimm, S. L., Jenkins, C. N., & Smith, S. J. (2016). The impacts of oil palm on recent deforestation and biodiversity loss. PLOS ONE, 11(7), Article e0159668. https://doi.org/10.1371/journal.pone.0159668
Widiono, S., Supriyono, B., Hakim, L., & Muluk, M. R. K. (2024). Oil Palm Plantation Expansion and Population Problems: An Explanatory Factor for Deforestation in Indonesia. Dynamics of Rural Society Journal, 2(2), 76–88. https://doi.org/10.37905/drsj.v2i2.50
Widiono. (2024). Analysis of the Impact of Plantation Expansion on Deforestation in Indonesia. Forest Research Journal, 7(1), 10–19. https://doi.org/10.26760/jrh.v7i1.10-19
York, R., Rosa, E. A., & Dietz, T. (2003). STIRPAT, IPAT and ImPACT: Analytic tools for unpacking the driving forces of environmental impacts. Ecological Economics, 46(3), 351–365. https://doi.org/10.1016/S0921-8009(03)00188-5
Published
2026-07-23
How to Cite
Zairin Ayu Diah, Syfa Salsabila, Nadila Putri, Beckam Evans Natongam Naibaho, Maria Aurelia N.Langgam, Muhamad Habib Rizki, Fitriani Fitriani, Darma Hadi Prayitno, & Septriani Septriani. (2026). Economic Transformation And Ecological Pressures: Determinants Of Deforestation On The Island Of Kalimantan. International Journal of Economics, Business and Innovation Research, 5(04), 5048-5070. https://doi.org/10.63922/ijebir.v5i04.5462
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