Indonesia has formally applied to the World Bank’s Forest Carbon Partnership Facility, a sort-of precursor of the REDD scheme. Launched at the Bali negotiations in December 2007 its objectives are:

• To build capacity for REDD in developing countries; and
• To create and test a series of incentive schemes.

Although Indonesia did not participate in the initial round of funding (totalling $82 million), the Government of Indonesia has decided now is the time to get involved. And there are plenty of good reasons too: $350 million on the table; only two other countries – Guyana and Panama – applying so far; the presence of 20 pilot REDD projects in the country; and the development of the eagerly awaited REDD rules. However two aspects of the submission raise some questions.

Blaming the poor

In the submission it suggests that “the main drivers are extensive forest harvesting by pulp, paper and palm oil firms, expansion into rainforests and peat land by agriculture and forest plantations as well as encroachment by low-income communities into forest lands.” It therefore equates the behaviour of local level cultivators with the huge commercial interests of the timber and palm oil interests. This is problematic because the Indonesian Government has a history of blaming local cultivators for actions that at best, they contributed only partially to. For example, with the fires of 1997-98, local villagers were deemed culpable despite the fact that there was little evidence to prove such an assertion. Indeed current research suggests that these fires come from a variety of sources and that due consideration must be given to local cultivators.

There must be concern that any new funds flowing into Indonesia will be first used against the indigenous users rather than the commercial interests. What safeguards will be put in place to prevent such abuses remain to be seen.

OK: Why did they open up the peat lands?

The submission also provides an analysis into how much the scheme would have to pay to prevent such deforestation. While failing to mention the cost for clearing virgin tropical rainforest, it does provide figures for degraded forest and peat land. To deter palm oil plantations on degraded land would take a pricing of $21.54 (27 Euros) a tonne while for peat lands it would only need to be priced at $4.19 (5.25 Euros) a tonne. Therefore any deforestation scheme based on the current depressed price of carbon (10.83 Euros as of 6^th March) would not deter plantations on degraded land, but would on peat lands. It has also been suggested that Indonesia losses a potential $1 billion a year in opening up the peat lands for agriculture through carbon loss.

It has been suggested that the reasons for the decree are twofold: the upcoming Indonesian elections and the need for money in the light of the global financial crisis. Given the timing of this submission, barely two weeks after the decree I would suggest a third possibility: to ‘encourage’ a pay-out from the Carbon Partnership Facility. By announcing the decree before the submission and then attaching a ‘price tag’ in the submission, the Government of Indonesia is effectively setting a price for this decree to be set aside. And given that it is below the current price of carbon, it can be viewed as a ‘bargain’.

Is this far-fetched? Only time will tell…

As President Yudhoyono was first greeting and then demanding leadership from visiting US secretary of State Hillary Rodham Clinton on climate change, the old saying ‘those in glass houses shouldn’t throw stones’ comes to mind. In particular two recent events do not bode well for the future, namely the re-emergence of the forest fire problem and the decree to use peat lands as palm oil plantations.

Forest Fires

Forest fires are one of the main reasons that Indonesia is the third largest carbon dioxide emitter in the world. Beyond that, it also creates tensions with Indonesia’s neighbours: for example in 1997-8, the forest fires blanketed the whole of SE Asia causing health problems and economic damage. Faced with these issues the Indonesian government has made routine pledges to prevent the situation ever arising again. For example the National Action Plan for Climate Change promises to reduce forest fire hot spots by 50% in 2009. Unfortunately this year, severe fires have already been detected in Riau, Sumatra, resulting in haze over Pekanbaru, the provincial capital. Two factors suggest that this problem will only get worse, not better:

1. El Nino/ La Nina effect: This is a southern hemisphere oscillation that has a large effect on the weather across the globe. As a general rule La Nina brings heavy rain to Indonesia while El Nino conditions are associated with drought. So far this year has been La Nina: nonetheless there have still been hundreds of fires. However these conditions are likely to end in April, with El Nino starting either later this year or next year, resulting in a significantly drier climate, which of course encourages fires.
2. Lack of government supervision: despite government promises to stop the building of commercial sites of forested lands, the recent fires have been directly linked to forest clearance for palm oil plantations. While independent programmes exist to help control burning on the local, subsistence level, there appears to be no such effort in the commercial field.

Peat Land conversion

Peat lands are crucial carbon sinks, trapping CO2 that would otherwise be released into the atmosphere. Greenpeace estimating that Indonesia’s peat lands contain 37.8 billion tonnes. In order to grow palm oil on peat lands, it must be first cleared then drained thereby releasing the trapped CO2 into the atmosphere. Furthermore this practice increases significantly the chances of fires: a report by Wetlands International in 2006 concluded that in this entire process, Indonesia emits 6.5 times the CO2 it does by burning fossil fuels.

Despite this, the government announced new plans to open up peat lands for conversion to commercial palm oil plantations. The agriculture and environmental ministries tried to assure environmentalists that the process will be strictly regulated, will recapture all the carbon lost in the conversion process and that the plantations will not be opened on peat land more than 3 meters deep.

Such claims have led to anger among activists: for example Yuyun Indradi of Greenpeace states “the government needs to protect the remaining peatlands and forests if we are to slow down climate change and protect the livelihoods of forest-dependent communities and biodiversity.” This is also a slap in the face of campaigners who have been pushing for the utilization of degraded land for palm oil plantations (last week’s blog dealt with this issue) rather than forests. It seems that the government has ignored these pleas.

So why? The first reason involves economics and the global recession. Gatot Irianto, from the Agriculture Ministry, admits as much when he said “we still need land for oil palm plantations. We must be honest: the sector has been the main driver for the people’s economy”. The second deals with domestic politics and the upcoming general elections. As Bustar Maitar of Greenpeace accuses “with the general elections coming up, the Agriculture Ministry’s plan is fishy, because it seems like an attempt to satisfy the country’s powerful paper and palm oil industries at the expense of the environment.”

Overall this has been a bad week for Indonesia who once again seems to put short-term economic interests above those of the health of its people and the global climate. By pursuing such dubious policies, it puts at risk Indonesia’s participation in future REDD projects. While it is important to demand action from leading Developed countries like the US, it must also show commitment at home to take action. So far it is failing.