Tropical Deforestation in Indonesia

Katrina Severin [email protected]

Energy Law Professor Fred Bosselman December 8, 2010

Presentation Overview

1. Impacts of Deforestation Climate Change 2. Indonesia New democracy - Demand for timber, palm oil, biofuels 3. International Policy REDD , Reduced Emissions from Deforestation and Degradation 4. Future Prospects 2

1. The Role of Tropical Forests

• • • • • • Filter air Store and sequester carbon – – Afforestation pluses Store 50% more carbon Keep the earth cool – – Regulate temperature Adaptation to climate change Regulate rainfall Nurture its biodiversity Provide valuable resources 3

Deforestation Trends

    In 2010, Indonesia fastest deforestation rate in the world 40% lost since 1950 In 1900, 170 million hectares, today 98 mh Losing 2% each year, 1.8 million hectares=7,000 sq miles 4

2. Indonesia

• Sumatra • Kalimantan • Sulawesi 5

Top Greenhouse Gas Emitters MtCO

2 e

China Indonesia Brazil Russia India Emission Sources U.S.

Energy Agriculture Forestry Waste Total 5752 442 -403 213 6005 3720 1171 -47 174 5017 275 141 2563 35 3014 303 508 1372 43 2316 1527 118 54 46 1745 1051 442 -40 124 1577  peat decomposition  peat fires/slash and burn  forestry/land use changes 6 2007 World Bank

Causes of Forest Loss in Indonesia

• • Corrupt rule • Weak protection of communities rights Unenforced laws • Short term economic growth Government Communities Legal system Timber, Pulp, Biofuels, Palm Oil 7

•

Suharto’s Kleptocracy

1967 ousted communists • “New Order” regime – Development agenda – natural resource exploitation • State claimed 90% of country’s forest – Military as overseer of forests • Timber concessions as political favors – 62 million hectares to cronies • Subsidies to timber industry 8

President Yudhoyono: any better?

• • • • • Former army general, elected in 2004 “Collusive Democracy” Pledged 26% GHG emissions cut by 2020 Transparency International – Corruption Perception Index 110/178 countries – In Suharto’s day, top 5 Tenure disputes and violent conflicts over ownership rights 9

Government Promises...yawn

• 1980 Ban on log exports • Suharto cornered market • Government Reforestation Fund • $5 billion embezzled • Industrial tree plantation policy • Permits are pretext to liquidate natural forest • 2007 Announced plan to cut forest fires in half • Up 60% • 2011 2 year moratorium on new concessions • New sizeable concessions just granted 10

Demand for Timber, Palm Oil, and Biofuels

• Pulp and paper exports -Demand 4.9 million m3/yr in 1990 to 36.7 million m3/yr in 2008 -APP and April largest exporters -Forestry revenues $20 billion • Largest producer of palm oil – Home to young tree population, increased yields and acreage • Biofuels – – Rising global demand for alternatives to carbon-based fuels Cheap availability of feedstock 11

3. International Help?

• REDD -Reduced Emissions from Deforestation and Degradation  Outcome of governments, NGOs, scientists, and investors  Rich countries pay poor ones • 2005 : COP11 Montreal, Papua New Guinea and Costa Rica propose including tropical deforestation into UNFCCC CDM mechanism • 2007 : COP13 Bali , REDD approved • 2009 : COP15 Copenhagen  Developed countries pledged $4.5 billion for REDD  INVEST –PES 12

How Do You Count It?

• Recognizing seriousness of trend complicated by difficulties in: 1. Creating baseline inventory 2. Determining area 3. Accounting for different rates of deforestation 4. Ineffective, inefficient and immature carbon markets 5. Old growth primary v secondary forest 13

REDD in Indonesia

• Indonesia has 17.5% of all REDD projects globally • Norway promises $1 billion • APP will not move ahead with a 15,000 hectares project in Riau province • Indonesia’s National Council on Climate Change puts opportunity cost of forgoing oil-palm plantation at $30/ton. 14

COP16: Cancun, Focus REDD

• 2010 : REDD Partnership, Oslo • 58 countries • Norway and UK pledged cash by 2012 • • Forest-carbon credits or carbon tax? EU- ETS needs to be updated • • • Need to secure financing Mechanism for Measuring, Reporting and Verification (MRV) But.... high level of mistrust 15

Prospects for success?

PNG

• • • • • • Ownership is customary Private sector developed Heavy NGO presence Political will – Office of Climate Change senior officials suspended Forest Authority instituted timber-legality tracking system FSC active

Indonesia

• • • • • • • Ownership by state in flux Private sector ill-developed Heavy NGO presence Poor political will Government subsidies for timber plantation development only increasng Uniliver, Kraft, P & G FSC dropped major timber players 16

4.

Prospects for Slowing Deforestation

• Clearer definition of land ownership, title tracts, and contracts • Accountability of local government officials • Withdrawal of development assistance if sustainability goals not met • US needs to show leadership

4. The Future?

• Begin a slow phase out ineffective subsidies of fossil fuels and timber products • Provide free legal assistance clinics in indigenous areas • Develop • partnerships between big multinationals Reign in China who is planting trees by the millions!

• Invest in a monitoring, verification, and auditing mechanisms • ... Reformists are gaining ground !