Palm oil production in developing countries such as Indonesia has negative externalities, such as deforestation and underpayment. These need to be assessed, quantified and monetized when possible.
Using Trucost and Impact Institute methodologies and data provided by TEEB, environmental externalities under different land use types and using alternative farm management were calculated to be $28bn. Social externalities were assessed to be comparable to environmental ones. Finally, it was demonstrated that internalizing part of these externalities would lead to a profitable business model.