This proposal would mean that Indonesia could cut down all its rainforest and replace them with Palm Oil, and would have engaged in zero deforestation.
This has to be condemned globally, There are myriad problems with this. The destruction of the rainforest would release billions of tonnes of carbon into the air. Palm oil, will be incapable of reabsorbing all this carbon. Furthermore, palm oil plantations support just a handful of species of wildlife, so this would mean the end of the orangutan Sumatran elephant, tiger leopard and rhino.
Thankfully, there are many voices within Indonesia which are already condemning this move.
At the moment, this idea is the thought of various extreme academics (and much of the government). If it were to find acceptance, we could see the wholesale destruction of the forests of Indonesia, an area of deforestation that would have a huge effect on the worlds attempts to mitigate global warming. Arguments that palm oil trees absorb carbon as well, are absurd, as they absorb a tiny proportion of the carbon that would be emitted.
Hopefully, this will remain a crackpot academic idea, and a governmental daydream and never be put into place. We must be vigilant that it isnt.