Rising global demands for food and biofuels are driving forest clearance in the tropics. Oil-palm expansion contributes to biodiversity declines and carbon emissions in Southeast Asia. However, the magnitudes of these impacts remain largely unquantified until now. We produce a 250-m spatial resolution map of closed canopy oil-palm plantations in the lowlands of Peninsular Malaysia (2 million ha), Borneo (2.4 million ha), and Sumatra (3.9 million ha). We demonstrate that 6% (or ≈880,000 ha) of tropical peatlands in the region had been converted to oil-palm plantations by the early 2000s. Conversion of peatswamp forests to oil palm led to biodiversity declines of 1% in Borneo (equivalent to four species of forest-dwelling birds), 3.4% in Sumatra (16 species), and 12.1% in Peninsular Malaysia (46 species). This land-use change also contributed to the loss of ≈140 million Mg of aboveground biomass carbon, and annual emissions of ≈4.6 million Mg of belowground carbon from peat oxidation. Additionally, the loss of peatswamp forests implies the loss of carbon sequestration service through peat accumulation, which amounts to ≈660,000 Mg of carbon annually. By 2010, 2.3 million ha of peatswamp forests were clear-felled, and currently occur as degraded lands. Reforestation of these clearings could enhance biodiversity by up to ≈20%, whereas oil-palm establishment would exacerbate species losses by up to ≈12%. To safeguard the region's biodiversity and carbon stocks, conservation and reforestation efforts should target Central Kalimantan, Riau, and West Kalimantan, which retain three-quarters (3.9 million ha) of the remaining peatswamp forests in Southeast Asia.
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