YOUR LETTERS: COMPENSATION FOR THE HAZE? The Jakarta Post | Readers Forum | Wed, July 03 2013, 9:21 AM A- A A+ Paper Edition | Page: 8 For 20 years transboundary haze has hit Singapore, but this time the situation is much worse. Along with the haze, the blame game is in high gear again. Some slammed the Singapore government and ruling party for a lack of effective action, while Foreign Minister K. Shanmugam refuted such irrational “political attacks” which ignored Singapore’s vulnerability as a result of its natural “size and geography”. The blame game never works. A Japanese environmentalist said, “Blaming China can’t solve the air pollution problem.” All stakeholders must cooperate to solve the crisis together. Let’s stop blaming and think about solutions for both the short and long term. The most pressing matter is to put out the fires. It is good news that Indonesia has agreed to try its best to control the fires and will begin cloud-seeding “based on needs on the ground”, but Singapore should also be ready to provide possible assistance or even dispatch water-dropping aircraft if necessary later. In the long run, the solution may be derived from the cause. Externalities are one of the typical reasons which may cause market failures and environment pollution is a typical negative externality. Once such a market failure occurs, possible government interventions should be considered to force polluters to internalize the cost of pollution so as to make the remedy. It is clear that Indonesia should bear the all the responsibility to solve the problem. No matter whether the polluters are local farmers or foreign companies, foreign governments have limited influence to stop them. Indonesia has laws which ban illegal forest burning, however, illegal land clearing by oil palm developers is common due to weak enforcement. The “slash-and-burn” technique has been used till today, simply because it is still the cheapest method. The basic problem is about cost, so only a “stick” may not be enough and those farmers likely prefer a “carrot”. Furthermore, Indonesia should welcome neighbors’ aid to tackle environmental challenges together. And to become a responsible emerging power and to gain a good international reputation, Indonesia should consider ratifying the ASEAN Agreement on Transboundary Haze Pollution adopted in 2002 in the future. Second, there is no doubt that Singapore is a victim and theoretically should be compensated. However, to be realistic, Singapore may have to choose to either suffer the cost from haze pollution or bear certain cost of the pollution abatement. The cost from haze is huge. The visible cost of haze at least includes increased healthcare and living expenditure, working productivity losses, commercial losses from certain industries especially tourism. Then the invisible cost of losing fresh air, disrupted normal life and reputational losses as a ‘garden city’ is also considerable. The great Southeast Asian haze of 1997 was estimated to result in US$9 billion losses in total. As long as Singpaore’s overall willingness-to-pay for a haze-free nation is higher than the cost from haze pollution, it is cost-benefit worthy to bear certain cost of the haze pollution abatement. Third, global customers should ultimately share the cost of a haze-free Singapore and Southeast Asia. Those consumers of palm oil products sourced from Southeast Asia should pay the extra cost caused by non-“slash-and-burn” techniques, and those foreign visitors should pay a higher premium for traveling. Sun Xi Singapore
Posted on: Wed, 03 Jul 2013 09:52:45 +0000