REDUCING EMISSION FROM DEFORESTATION AND FOREST

DEGRADATION (REDD) IN DEVELOPING COUNTRIES:

A CASE STUDY OF INDONESIA(Part of Proposed Background Research)

By: Kadim Martana

Supervisor : Assoc. Prof. Bruce ManleyCo- Supervisor : Dr. David Evison

School of Forestry, University of CanterburyNew Zealand

Outline

1. International Context2. Indonesian Process on REDD 3. REDD Demonstration Activity 4. Proposed Research

1. International Context Emission from Forestry Sector ~ 17.4% of total world emissions (A

4th AR IPCC, 2007; Stern Review, 2007).

1. Int’l context.. Cont.

About 75% of the forestry sector’s emission come from developing countries [ e.g. Brazil, Indonesia, Malaysia, PNG, Gabon, Costa Rica, Cameroon, Rep. of Congo, Democratic Rep. of Congo] - (A 4th AR, IPCC 2007).

Source of emissions : deforestation (conversion from land to non-forested land) forest degradation (i.e. reduction of forest’s capability).

PNG & Costa Rica’s proposal (COP 11th UNFCCC, 2005 (www.unfccc.int; MoF, 2008) to provide incentive to compensate with developing countries’

efforts to Avoiding Deforestation (later known as Reducing Deforestation and Degradation in Developing Countries/REDD) Mechanism,

1. Int’l context.. Cont. COP-13th UNFCCC adopted Decision 2/CP.13 on Policy

Approaches and Positives Incentives on REDD (including An Indicative Guidance for Further Implementation of Demonstration Activities on REDD) (www.unfccc.int; MoF, 2008).

REDD

Carbon Emissions

past future

Compensation for emission reduction

Reference level (Baseline)

BAU

V

Source: Ministry o Forestry, Indonesia (2008)

t

• Forest in Indonesia, based on functions

Total forest area : 123.45 mi l l i on ha (~ 60 % of the country l and area)

Conservation

Protection

Production

Convertible

31.78 M ha (26 %)

20.08 M ha (16 %)

14.06M ha(11 %)

Source: Directorate General of Forest Planning, MoF Indonesia (2006)

2. Indonesian Process on REDD

57. 53 M ha (47 %)

Forest Category:

2. Indonesian Process… Cont.

0

0.5

1

1.5

2

2.5

3

1985-1997 1997-2000 2000-2005

Time period

Mil

lio

n h

a/y

ear

Deforestation rate in Indonesia

Forest industry dev.,Pulp & paper plantation, Estate crops plantation(oil palm, rubber, cocoa)

Economic crisis,Decentralization

Moratorium on forest conversion,Reduced AAC,Law enforcement,Improved forest management.

Source: Directorate General of Forest Planning, MoF Indonesia (2006)

Expansion of palm oil

plantation

• Further Look at Source of Deforestation and Forest Degradation in Indonesia

Forest areas (production forest, conversion forest, protection forest,

conservation forest) including peat land forest

Deforested

Degraded

Increase demand to agriculture

land (subsistence

farmers)

Exposed to Repeated

fires

Illegal logging due to high dependency of wood supply from

mixed tropical hardwood forests

and limited alternative source of

incomes

Unsustainable forest

management practices by

forest concessionaires

Note: Carbon credit from REDD in tropical countries is expected to be $15 - 50 billion / year (assumed REDD at 50% or 2.4 Gt CO2 per year)

2. Indonesian Process… Cont.

2. Indonesian Process… Cont.

Indonesia formed Indonesia Forest Climate Alliance (IFCA), consisted of Governments, Private Entities, and Communities – a stakeholder’s consultation forum working on forest and climate in Indonesia, to analyse how a REDD Scheme could operate as a practical carbon emission reduction (June 2007)

Coordinated by the MoF, supported by partners (UK, Germany, Australia, WB).

The IFCA provided preparation of papers which address elements of the supply chain necessary to produce carbon credits from REDD in Indonesia.

2. Indonesian Process… Cont. Deforestation and Forest Degradation Reduction Strategies of

Indonesia (based on IFCA Study results, 2007):

Forest Function Recommended strategy initiative

1 Protected Areas 1. The development of a revised national conservation strategy,2. The development of a professional and sufficient management

structures,3. The confirmation of boundaries and the completion of the legal

gazettal process.

2 Production Forests

1. Review the production forest function,

2. Reduce flow of illegal logs into market (law enforcement, create new supply, restructuring wood products sector),

3. Review management practices in production forest units,

3 Oil Palm 1. Consolidate policy and approval for releasing Convertible Areas for palm developments,

2. Review spatial plans to optimise degraded lands,3. Intensify production per unit land4. Require zero burning

4 Peatland 1. Regulate and restore water table,

2. Prevent fire,3. Regulate further conversion of peatland, revise & enforce rules for

management of existing peatland,4. Implement land swaps to retain high carbon value forest and peats

while allocating alternative land for new plantations

Indonesia REDD framework/infrastructure on REDD includes:

a. Setting Reference Emission Level (Baseline)

b. Strategies

c. Monitoring

d. Market

e. Benefit distribution. Indonesia moves to implement Demonstration Activities

on REDD

2. Indonesia Process… Cont.

3. Demonstration Activity on REDD

As a follow up from COP-13th UNFCCC’s Decision 2/CP.13, Indonesia has some cooperations with partners to implement REDD Demonstration Activities / DA. (http://unfccc.int/resource/docs/2007/cop13/eng/06a01.pdf#page=3)

Objectives of the DA are to: Demonstrate REDD provide shared learning and experience on REDD

to international communities.

What activities in the region? Activities are basically derived from recommended

strategies, which are carried out at the regional level.

These include (summarized from KFCP Projects in Central Kalimantan /ex. Mega Rice Project and proposed activities at Berau District, East Kalimantan) : Addressing drivers of deforestation (rehabilitation of 1

million Ha degraded peatland –ex mega rice project, restoration of peatland hydrology, law enforcement to illegal logging);

Fire prevention (community based forest fire management), monitoring

Community based forest management for REDD, Agro-forestry and other forest based lively initiatives, Information sharing and outreach. Improved management of Forest Production

Management (for TNC proposals, since it includes production forests).

3. Demonstration… Cont.

3. Demonstration… Cont.

Proposed Location of DAs and Partners: Kalimantan Forest Carbon Partnership (KFCP), as part

of Indonesia-Australia Forest Carbon Partnership (IAFCP); located in Central Kalimantan.

Indonesia – Germany (in East Kalimantan) (Joint Study Report, 2008)

Indonesia – UNREDD Programme (initial stage, in North Sulawesi)

Indonesia – The Nature Conservation (TNC); proposed location in Berau District, East Kalimantan

Indonesia-Germany

Indonesia-TNC

Indonesia-Australia

Indonesia - UNREDD

• Proposed locations of REDD DAs in Indonesia

3. Demonstration… Cont.

4. Proposed Research.

Socio Economic Factors Affecting Behavioural Changes of Forest-Stakeholders in the participation of REDD DA: A study Case of Indonesia

Main Objective:to investigate socio economic factors that induce changes of forest- stakeholders’ participation on REDD DA.

• Some references:(2007). Climate Change 2007: Synthesis Report. An Assessment of the Intergovernmental Panel on Climate Change.Ministry of Forestry, Indonesia (2008). Consolidation Report: Reducing Emissions from Deforestation and Degradation in Indonesia. Jakarta 10270, Forestry Research and Development Agency (FORDA) Ministry of Forestry of the Republic of Indonesia.(2008). Support to Formulation of a Forest Programme embedded into the REDD Process: Joint FC-TC Feasibility Study for the Indonesian-German Forest and Climate Change Programme. German Financial Cooperation with the Republic of Indonesia.

Other sources: www.unfccc.inthttp://www.climatechange.gov.au/international/publications/pubs/kalimantan.pdfhttp://www.un-redd.net/

Foto sources:http://www.borneotourgigant.com/http://www.geocities.com/degigant/West_Borneo.htmlPresentation by Indonesia Forest Concession Holders Association

Thank You… Terima kasih…

3. Demonstration… Cont.

Decision 2/CP.13 provides some Indicative Guidance: Demonstration activities should be undertaken with the approval of

the host Party. Emission reductions from national demonstration activities should

be assessed on the basis of national emissions from deforestation and forest degradation.

Sub-national demonstration activities should be assessed within the boundary used for the demonstration, and assessed for associated displacement of emissions.

Reductions in emissions or increases resulting from the demonstration activity should be based on historical emissions, taking into account national circumstances.

Sub-national approaches (activities within national boundary), where applied, should constitute a step towards the development of national approaches, reference levels and estimates.

Demonstration activities should be consistent with sustainable forest management, noting, inter alia, the relevant provisions of the United Nations Forum on Forests, the United Nations Convention to Combat Desertification and the Convention on Biological Diversity.

Independent expert review is encouraged

National Policy: road map on REDDJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

20072008 2009 2010 2011 2012 Post

2012

COP 13

Preparation Phase

- Design Fine Tuning- System

Establishment- Pilot Design

* Analysis (Architecture and Strategies)* Communication/ Coordination/Consultations

Carbon-Finance (Pilots)

- Pilot Implementation- Testing- Knowledge Management

Full Implementation

of REDD

Workshop, SBSTA, UNFCCC, G8, Etc.

COP14COP13 COP15

2. Indonesian Readiness.. Cont’

7 Technical Working Groups on COP 13

IFCA process in the National Climate Change context prior COP-13 GOI

Donors :World Bank, UK,

Germany, Australia,, Etc

MoF COP 13Steering Committee

(Eselon I Dephut)

National Coordination

MoFr

Ministry of Environment

MoF Chair ofSub Team COP 13 on Substantive Issues

MoF Chair ofTeam COP13

MoFr Chair ofSub Team COP 13 on

Side Events

Stakeholders

Study On Methodology forMeasuring and Monitoring Carbon Stocks

Study OnQuantification of past and future carbon

emissions

Study OnConsolidation of Payment Mechanism

Energy Adaptation Forestry Tech. Transfer

Post 2012 Financing CDM

Consultations

Coordination

Communication

StrategyMethodology/architecture

Study OnPulp & Paper

Study OnPeat Land

Study OnProtected Area

Consolidation

Study OnProduction Forest

Alliance / IFCA(Indonesia Forest Climate Alliance) :

MoFr, Other Mins, Local Govs, CSOs, Academia, Donors, Private

Sector, Int. Org

Study OnOil Palm

3 Activities

9 Studies

Study On Market

Resource Persons for WG

President of COP-13 Team

Source, MOF 2007

REDD Mechanism

To achieve such established (agreed) level of (emission/deforestation) reduction, strategies must be implemented in the field, following the recommended strategies.

Strategies comprise a set of activities, and act as inputs (money injection)

REDD

Carbon Stock

past future

Compensation for emission reduction

Reference level

BAU

? ?

Carbon emission

REDDProtection

Forest

REDD Area (e.g. District)

Involvement of community

in CDM Project

Protection forest is preserved (deforestation rate reduced to 500 ha/year, therefore

reduction of emission ~ 500*300 ton C + Others (RIL, A/R CDM, Communty..)

Avoid degradation

Community is given concession right to

manage forest sustainably

Sustainable forest management of Production Forest

From A/R CDM

From

RIL

Illegal logging (Rate of 1000

ha/year)

Source : Boer, 2007

4. Emerging Questions

Common question: What impacts would likely be of the REDD DA in term of social and economic, (+environment)

? At regional, national level? Specific questions:1. How to assess current impacts of the REDD DA? 2. From the current state, how to further predict impacts from such intervention? – i.e. modelling impacts?3. Can we go further to assess impact of the intervention toward local communities and other people dependent

on forests? E.g. Households income? 4. Can we go further to following questions Other questions:5. How can we link between the set of emission/deforestation target with those recommended/implemented

activities? 6. Given limited resources to implement strategies, to what extent that level of (emission/deforestation) reduction

could be achieved. In another way, Given an established (emission/deforestation) target, how much resources for the strategies (a set of activities) should be provided? i.e. LP problem?

7. Considering many type of activities in the DA, how is the relative performance of each activity in the reduction of emissions? How to measure? i.e Efficiency analysis?

5. My Proposed research Proposed aim:

This study aims at to investigate forestry sector’s potential impacts to a regional economic development due to an inclusion of reducing emission from deforestation and degradation (REDD) mechanism.

Research questions: What would be economic and social impact s to a region ? e.g.

economic value, job creation from the strategies/activities implemented? How can we link between strategies/activities with targeted reduction of

deforestation? Can we measure, its impact to low income groups / forest dependent

people? How is it compared to other medium and high income groups? i.e. measuring income distribution.

Can we link between three factors: level of deforestation reduction, expansion of implemented strategies/activities, and regional economic conditions?

5. My Proposed … cont

Proposed location Berau District of East Kalimantan Province is proposed

to be location of case study due to the following reasons: The Nature Conservation is now proposing this district as a

laboratory of REDD Demonstration Activity at a large scale. It is expected that the project could start at 2010 (now in the preparation & stakeholders consultation stage);

Berau District used to be a place for Berau Forest Management Project (BFMP). Reliable data and information are available;

Rahardja (2005) has worked on forestry based land use planning in the District. His work can be an important source or base for the inclusion of REDD DA for regional economic development.

5. My Proposed … cont

Other locations: Central Kalimantan (Ex. Mega Rice Project)

The area include ex. Mega rice (1 million ha of deforested peatland);

Carry out by Kalimantan Forest Carbon Partnership (Indonesia – Australia);

Project has been lasting for a year.

Thank you

Volume Perdagangan Karbon Dunia

Sumber: Capoor and Ambrosi, 2008

Kyoto Market (non

CDM), $24,000

Voluntary Market,

$92

Kyoto Market CDM,

$8,000

Berapa Besar Pasar Karbon

10 - 18 Voluntary - Avoided deforestation

0.5 - 45Voluntary market - A/refforestation

3.3Chicago Climate Exchange (CCX)

11.3NSW GGAS (Aus)

8CDM

($US/ton CO2)

Harga KarbonMekanisme Pasar

Volume Transaksi Karbon sampai Maret 2006(US$ Juta)

Sumber: Team IFCA (2007)

Berapa Harga CER

Sumber: World Bank, 2006

A/R CDM REDD

Stok Karbon

Stok Karbon

Waktu Waktu

BaselineBaseline

Ada kompensasi

Ada kompensasi

Pembayaran dilakukan setelah pohon tumbuh (perlu menunggu)

Pembayaran bisa segera selama kita bisa menunjukkan penurunan stok karbon berkurang dibanding baseline

Sumberdaya Hutan dan Potensi Pasar Jasa Lingkungan KarbonIndonesia

y = -1.3753x + 2845.7

R2 = 0.988580

100

120

140

160

180

1945 1955 1965 1975 1985 1995 2005

Fores

t Cov

er (M

ha)

0

5000

10000

15000

20000

25000

Luas

(000

ha)

Semak belukar, tanahterbuka, lahan pertanianbercampur semak

Hutan lahan kering danmangrove terdegradasi

Laju deforestasi tinggi 1.3 juta ha per tahun dan hutan yang tersisa juga banyak yang terlantar. Melalui Mekanisme REDD, dengan menurunkan laju deforestasi 50% dari yang terjadi selama ini dapat menghasilkan pendapatan negara sebesar 3 sampai 10 milyar USD/tahun (asumsi harga karbon 5 dan

15 USD/tCO2 dan stok karbon hutan sekitar 150 tC).

40 juta

Dari berbagai sumber

Ilustrasi besar emisi pada kondisi tanpa dan dengan adanya skema REDD

Potential kredit karbon ($)

100

150

200

250

300

350

2012 2017 2022 2027

Em

isi (

juta

to

n C

O2)

Baseline 1

Baseline 2

REDD intervention

2007

Ilustrasi besar emisi pada kondisi tanpa dan dengan adanya skema REDD

Potential kredit karbon ($)

Baseline 1

Baseline 2

REDD intervention

2012 2017 2022 20272007100

150

200

250

300

350

Sto

k K

arb

on

(ju

ta t

C)

JADI BASELINE SEBAGAI PROYEKSI BESAR EMISI ATAU PERUBAHAN STOK KARBON AKIBAT DD DI MASA DATANG

KALAU TIDAK ADA SKEMA REDD

Bagaimana menentukan Baseline?

OPSI 1: Dari data historisRata-rata selama periode

tertentu di masa laluMengikuti pola emisi masa lalu

OPSI 2: Pendekatan modellingModel spatial atau non spatial

OPSI 3: Pendekatan lainnyaKondisi stok karbon menjelang

pelaksanaan REDD dan lain-lain

IDENTIK DENGAN A/R CDM

OPSI-1: SEMAKIN BESAR EMISI HISTORIS, SEMAKIN

BESAR PELUANG PENURUNAN EMISI YANG BISA

DILAKUKAN

Reference level: deforestation rate

Baseperiod Crediting period - for how long?

Reduced emissions

With REDD

Without REDD