Targeted Scenario Analysis in Papua New Guinea: Informing Policy through Land-Use Futures for Cocoa and Palm Oil

Who benefits, what may be lost, and what future costs and opportunities could there be?

July 23, 2026

Papua New Guinea is home to landscapes of exceptional ecological and cultural value. Its forests, rivers, and agricultural lands support food security, livelihoods, and community identity. At the same time, these landscapes face increasing pressure. Natural and cultural landscapes are increasingly being converted–whether for logging, agriculture, or infrastructure development. While these choices generate immediate economic returns, their long-term impacts on communities, ecosystems, and resource resilience are often uncertain.

To better understand these trade-offs, Papua New Guinea (PNG) has applied UNDP’s Targeted Scenario Analysis (TSA) to design sustainable futures for the oil palm and cocoa sectors. TSA is a structured, evidence-based method developed by UNDP in partnership with the PNG Conservation and Environment Protection Authority (CEPA) that compares the economic, social, and environmental outcomes of different land-use futures. It helps governments, businesses, and communities understand not only what might happen under different scenarios—but who benefits, what may be lost, and what the future costs and opportunities could be. The study implementation was commissioned to Grant Thornton, NL.

By incorporating national and local policy targets, TSA makes trade-offs visible. For example, how land-use choices may influence household income, cultural values, ecosystem conservation, and long-term economic stability. The process is being used to support dialogue among government agencies, private-sector actors, and civil society, helping to create a shared evidence base that can inform ongoing planning and decision-making. The TSA does not prescribe a single development pathway but provides evidence to support informed decision-making by government, private sector, landowners and communities.

TSA oil palm, field visit with smallholders in West New Britain

Cocoa fermentery-drier at a smallholder farm

How TSA has been applied

In collaboration with the sectors’ policy decision-makers, the TSA policy-centred analysis examines the results of adopting contrasting land use policy scenarios for oil palm and cocoa production, by comparing:

Business-as-usual scenarios (BAU), where a continuation of the current production trends are projected into the future to assess ecosystem degradation and consequent potential decrease in productivity, farmers’ well-being and economic benefits.
Alternative sustainable scenarios, where changes in farm-level practices (e.g., intensification of yields, plant renovation, and compliance with certification schemes) are considered, can lead to long-term profitable and sustainable agricultural systems.

Each scenario was assessed for economic, social, and environmental outcomes over time, allowing government agencies, the private sector, civil society, and other stakeholders to compare short-term benefits with long-term consequences. Workshops and scenario-mapping sessions were held to ensure that the analyses capture the policy objectives of sector decision-makers and the perspectives of key stakeholders.

Key Findings

The analysis highlighted key insights that make the economic and environmental case for increasing investment to accelerate the implementation of PNG’s National Sustainable Land Use Policy (NSLUP), including the establishment of an information management system. For instance:

In the case of cocoa, maintaining a steady, high quality and compliant production is key to harness market opportunities. As a small global producer, PNG cannot influence prices but can benefit from global supply shortages if production is stable, high quality, and compliant with emerging international traceability and deforestation-free market requirements, such as the EU Deforestation Regulation (EUDR). Achieving this requires rapid Best Management Practices (BMP) adoption, improved conversion efficiency, and compliance with deforestation-free standards. The TSA suggests that the improved efficiency (and, where appropriate, expansion consistent with national land-use planning and sustainability standards) scenarios can deliver by 2040 between 500 and 860 million USD per year in foreign exchange revenues, 1.2 to 2.1 times the current amount.
In the case of oil palm, without expansion, BMP adoption raises national crude palm oil (CPO) production by 9 to 22% relative to current practices. With RSPO‑aligned expansion of 100,000 hectares, production increases by 70 to 84%, reaching up to approximately 1,070,000 tonnes oil by 2040. The analysis shows that doubling extraction rates or adopting BMP achieves similar production gains as large‑scale expansion. Conversely, maintaining current practices, even under expansive growth, fails to achieve comparable improvements in national production, highlighting the centrality of enhancing yields on existing land.
The analysis suggests that for both crops, the adoption of BMP increases the number of households achieving a living income. In the case of cocoa, from circa 24,000 today up to 77,000 by 2040 under a scenario of increased efficiency and responsible expansion. In the case of oil palm, from approximately 73,500 today to up to 123,000 by 2040 under RSPO‑aligned expansion. In comparison, in the scenario with the current practices and no expansion, the number of households able to generate a decent income would decrease to 63,500 households. The potential for gains at the household level are particularly important in areas experiencing youth unemployment, overcrowding and rising social tensions, indicating that improvements in agricultural productivity can support broader societal goals when combined with complementary interventions.

The analysis acknowledges existing industry efforts while highlighting opportunities for continuous improvement. More efficient agricultural management systems for palm oil and cocoa can improve productivity, profits and livelihoods. However, farmers need upfront financial support to address potential losses associated with the transition from BAU to sustainable systems. To this end, greater cross-sector dialogue is needed to align sector priorities and strengthen policy coherence across sectors.

Working in Partnership through FOLUR

This TSA work has been supported through the Food Systems, Land Use and Restoration (FOLUR) Impact Programme, led globally by the World Bank and financed by the Global Environment Facility (GEF). FOLUR is helping countries align development, agricultural productivity, and environmental sustainability. By examining multiple pathways and their trade-offs, TSA is helping stakeholders identify where policy interventions or investments could deliver long-term benefits, and where conventional approaches could create unintended social or environmental costs.

Lessons for Other Countries

As TSA continues to unfold, several lessons are emerging that may be relevant for other countries managing complex land-use decisions:

Evidence-based data can drive better choices, and in this, quantifying trade-offs is critical. Making long-term economic, social, and environmental outcomes visible can influence policy decisions and highlight the costs of short-term actions.
Shared analysis supports dialogue. Structured policy scenario assessments, backed by economic impact data, provide a neutral framework for stakeholders across sectors to engage with similar evidence.
Adaptation is necessary. Tools such as TSA must be adjusted to national and local governance structures, cultural priorities, and economic contexts.
Policy action follow-up. The TSA’s final products, the policy recommendations and action plan, require a close follow-up by stakeholders to ensure decision-makers’ engagement and successful implementation.

These lessons emphasize that understanding the potential consequences of land-use decisions is critical for long-term planning, independent of any external support.

Looking Ahead

PNG’s TSA results can inform discussions at national and subnational levels. As the analysis progressed, stakeholders could develop a clearer picture of how different land-use pathways affect communities, ecosystems, and development objectives

The PNG experience demonstrates that when potential outcomes are systematically assessed and made visible, decision-makers are better equipped to identify options that balance economic development, environmental sustainability, and community resilience.