The haze returned to Singapore again last month, with the Pollutant Standards Index (PSI) hitting the unhealthy level for the first time in three years.

While the episode was brief, the number of hotspots in Indonesia from forest fires remains high, as Minister for the Environment and Water Resources Masagos Zulkifli pointed out in a Facebook post on Oct 18.

The haze, which comes from the slash and burn activity in Indonesia, can be analysed as a market failure with negative externalities. Here, we want to examine in particular whether American economist Thomas C. Schelling’s idea on micro-motives and macro-behaviour can shed light on the forest burning by the farmers in Indonesia.

… Chew Soon Beng is a senior fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University (NTU). Previously a professor of economics and industrial relations at NTU, he has written many books on business, industrial relations and labour markets. Daniel Ong Qi Ming is a Master of Public Administration student at NTU.