Creative destruction - biofuels and palm oil

Many people's attention is on the environment, cutting emissions and purchasing "greener" fuels. One of which is palm oil.


Palm oil can be burnt to produce energy. It can be sustainable, in so far as you can grow palm trees in a plantation and harvest them. As the crop is the fruit you can continue to use palm oil and continue to grow fruit.


Difficulties occur when areas of rainforest are cleared to make way for the plantations. The crop does grow best in areas of high rainfall and a rainforest climate. This then reduces the rainforest and oxygen being released into the atmosphere. It also affects animals such as the orang-utan who live in the rainforest.


For instance in The Times recently they reported that Astra Agro Lestari (AAL) is an example of a large Palm oil producer in an area where the amount of orang-utan nests have dwindled significantly. 1500 orang-utans were counted in the 1990's, and 150 have been counted more recently. AAL is a subsidiary of Jardine, based in the UK.


Chairman and directors of Jardine come from the Keswick family, based in Wiltshire. They support the local Conservative party through donations and Tessa Keswick being president of the local branch. Donations from the Keswick family total over £300,000. 


This may be at odds with the Conservative party policy of supporting endangered species, and promoting ways of reducing the effects of global warming. Do they investigate every donation? To this level of detail? It is possibly unfair to expect them to do so.


Are Jardine aware of what a subsidiary is doing in another country? Possibly they should be, but are they? Surely they just expect profit.   


Equally it is confusing to the average consumer. Palm oil sounds nice. A natural ingredient used in many household products from Mars Bars to Hovis to Flora Margarine. Indeed it can be if grown responsibly, but not always. 


Part of the problem for the consumer is understanding the product they are buying and how it is made. Possibly this is too complex an issue if you "pop to the shops". Hence regulation and ethical behaviour standards. Businesses want to make as much money as possible. The Keswick family are worth £1.3bn. Clearly successful. If you buy their products, vote conservative are you unwittingly buying into their behaviour? 


Zooming out, the concern has to be about the raft of new products that will be floating our way in the future. The heating and power industries may go through a creative destruction process, with new ways replacing the old. In this process some of the ways presented may be profitable, but come with issues of their own e.g. rainforest deforestation which is counter productive. Is the creative destruction process ethical? No! - it is simply a renewal process. Knowledge is the important ingredient - and it is difficult to see how information can be managed effectively.