System dynamics control simulation for sustainability of Indonesia’s cocoa supply chain

Abstract

Indonesia’s cocoa sector faces challenges in greenhouse gas emissions and smallholder income volatility. This study develops a system dynamics model to simulate the interrelationship between carbon emissions and economic performance across the cocoa value chain, identify leverage points, and evaluate alternative policy scenarios. The model integrates environmental and economic variables into dynamic feedback structures, enabling scenario-based assessment of intervention strategies. Five scenarios were simulated: composting cocoa waste increased farmer income by 2% and reduced farm-level emissions from 0.43 to 0.303 kg CO₂-eq/kg (29.79% total reduction); biogas conversion raised income by 13.56% and reduced emissions by 11%; converting cocoa waste into animal feed slightly increased income by 0.23% while cutting emissions by 58.6%; combining composting with improved transport efficiency reduced emissions by 14%; and integrating composting, logistics optimization, and government-supported input subsidies yielded the highest performance, with a 13.50% income increase and a 70% emission reduction. These results demonstrate that integrated, system-based interventions can enhance both economic resilience and environmental sustainability. The system dynamics model provides policymakers and supply chain actors with actionable insights for designing effective, climate-aligned strategies in Indonesia’s cocoa industry.