The European Commission and some EU member states are pushing for palm oil plantations to be classified as "forest" (Full story) Per the current definition of forest from the UN, palm oil plantations would qualify as if they covered "any area larger than 500 square metres with crown cover of 10 per cent and trees [were] capable of growing two metres high." The Indonesian Forestry Ministry is also pushing to classify palm oil plantations as forest. See the full article at the Jakarta Post. The question of what constitutes a forest is a topic for another post, but these headlines have some interesting implications for potential REDD+ (Reducing Emissions from Deforestation and Degradation) projects.
The demand for bio-fuels is the main driver for palm oil, which is seen as an inexpensive replacement for fossil fuels. But because palm oil plantations drive deforestation, their environmental benefit is largely negated. Classifying them as forests would open the door for inclusion in REDD+ schemes - palm oil trees do sequester carbon, after all. It is ultimately the question of leakage: Should palm oil plantations be included in REDD+ schemes if they spur the destruction of rainforest carbon sinks?
Who should benefit from REDD projects? Another criticism of palm oil plantations is the pressure they put on food prices. Taking arable land out of cultivation means locals suffer from higher prices. In Panama, this pushes squatters further into the jungle to settle new plots for subsistence crops and cattle ranching. REDD schemes won't be very effective until they can incentivize these "shifted cultivators" NOT to deforest.
To dig deeper on this, check out the REDD-Monitor blog.