Indonesia — Late last year Indonesia made global headlines with a bold pledge to reduce deforestation, which claimed nearly 28 million hectares (108,000 square miles) of forest between 1990 and 2005 and is the source of about 80 percent of the country’s greenhouse gas emissions. President Susilo Bambang Yudhoyono said Indonesia would voluntarily cut emissions 26 percent and up to 41 percent with sufficient international support from a projected baseline by 2020.
Last month, Indonesia began to finally detail its plan, which includes a two-year moratorium on new forestry concession on rainforest lands and peat swamps and will be supported over the next five years by a one billion dollar contribution by Norway, under the Scandinavian nation’s International Climate and Forests Initiative. But while money is starting to come into place for the scheme, daunting challenges remain in the battle to reduce deforestation. Powerful interestsespecially in the forestry sectorhave little desire to alter the status quo by bringing transparency to the system that enriched them. Meanwhile corruption remains pervasive, enforcement of existing environmental law is rare and inconsistently applied, and the system for establish and managing land tenure is a political and legal minefield in some parts of the archipelago. While optimists say the influx of carbon finance could create political will to change the system, pessimists argue the money could end up being wasted, even being used to finance conversion of natural forests for industrial-scale oil palm and timber plantations.
Nevertheless there is a lot at stake. Indonesia is the world’s third largest greenhouse gas emitter, trailing only China and the United States, which unlike Indonesia are industrial superpowers. Indonesia’s emissions are almost entirely from its agricultural and forestry sector, which generate a small proportion of the country’s total economic activity (a 2007 estimated the benefit to Indonesia of the sector at $0.34 cents per ton of CO2, or a fraction of the value seen in Europe’s carbon market). Furthermore, forests provide food, water, and livelihoods for tens of millions of Indonesians. Destruction of forests puts these resources and opportunities at risk, but payments for forest conservation could help ensure sustainable use and provide economic incentives for shifting plantation development to the millions of hectares of abandoned and degraded non-forest land that lie across the Indonesia archipelago.
The Plan for Norway’s Money
Indonesia intends to use Norway’s billion dollar commitment over the next five years in three phases. The first, which runs from now through the end of the year, will support “readiness” activities including the development of a national REDD (Reducing emissions from deforestation and forest degradation [including peatlands]) strategy; the selection of sites for pilot projects (candidates include forests in Papua, Sumatra, and Kalimantan); the establishment of a independent monitoring, reporting, and verification (MRV) agency for tracking progress on reducing deforestation; the establishment of a national REDD office that reports directly to the president; and determination of a long-term funding instrument for the program.
Phase two, which would run from January 2011 through the end of 2013, would operationalize the long-term funding mechanism; launch the first pilot project; enforce the two year moratorium on new concessions; establish a degraded lands database; launch of a second pilot project (by early 2012); and set up a more advanced MRV system. Phase three, which would begin in January 2014 and continue beyond, would help Indonesia expand its emission reductions programs and possibly integrate these into a future climate framework that may supplant the Kyoto Protocol when it expires in 2012.
But while there is an initial plan in place, some confusion remains. For example, shortly after Norway deal was unveiled and the moratorium announced, officials from various government ministries and industry bodies seemed to make conflicting statements in the press. Hatta Rajasa, the Chief Economic Minister, told Reuters that the government would not take away any forestry licenses a day after Agus Purnomo, head of the secretariat of Indonesia’s National Climate Change Council, said that developers who lacked legal permits to clear forest land could lose their concessions. Purnomo said that some of Norway’s money would be used to compensate palm oil developers and timber companies that could lose forest concessions under the emissions mitigation program. Meanwhile in the week after the agreement was signed, Wandojo Siswanto, the head of working group on the climate unit at the forestry ministry, said Indonesia would renegotiate the deal after it became apparent that Norway only agreed to support a “REDD” program, rather than a “REDD+” program which would include reforestation and “sustainable forest management”, or reduced impact logging.
To clarify some of the details of Indonesia’s new forest program and Norway’s billion dollar commitment, Purnomo and his colleague Yani Salohboth of whom were appointed as Special Assistant to the President of the Republic of Indonesia for Climate Change in early 2010fielded some questions from mongabay.com. Purnomo and Saloh said that the partnership with Norway has changed the perception about forest conservation: “There will be revenues for various government agencies and local communities in keeping primary natural forests and peat lands.”
Purnomo and Saloh note that “serious” forestry and plantation companies are supportive of the moratorium on new concessions for the conversion of peat lands and primary natural forests, and that all companies will be subject to rules issued prior to the moratorium, including the ban on conversion of peat lands greater than three meters (10 feet) deep. They also say that Norway’s contribution̬at least in the later phase̬will be performance-based, meaning that if Indonesia fails to reduce deforestation it won’t get paid.
Purnomo and Saloh conclude by arguing that consumers in Europe and the United States need to do more to support efforts to reduce deforestation, specifically paying a small premium for responsibly-sourced timber and palm oil.
“A boycott of all Indonesian forest products will further increase pressures on remaining forests because the loggers and local communities in the forests will have to cut more trees, and thus increase deforestation, to supply the cheap East Asia market for their subsistence.”