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Inseparable in Indonesia: Forests, finance and development planning

Journey towards meeting NDCs
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Dedi Aprianto (32), collecting resin from a damar tree (Shorea Javanica) in Pahmongan village, Pesisir Barat regency, Lampung province, Indonesia. Photo by Ulet Ifansasti/CIFOR

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In a statement at COP26 climate talks in Glasgow, Indonesia’s President Joko Widodo made a commitment that the country’s forest and land use (FOLU) sector will reach carbon net sink by 2030, absorbing more carbon than it emits.

In light of Widodo’s remarks, the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF) – through the Global Comparative Study on Reducing Emissions from Deforestation and Forest Degradation (GCS-REDD+) hosted a science and policy dialogue, which highlighted Indonesia’s national priorities and strategies, including recent updates to the country’s Nationally Determined Contributions (NDCs).

NDCs are part of the strategy defined by the U.N. Paris Agreement to prevent post-industrial average temperatures from rising to 1.5 degrees Celsius or higher. Each country is required to provide data on greenhouse gas emissions and reductions targets it aims to meet. Indonesia is no different: the country has been preparing and implementing various corrective actions to slash emissions from land use change and peat and forest fires.

In its submitted updated 2021 NDCs, Indonesia reaffirmed its 2015 unconditional reduction target of 29 percent and conditional reduction target up to 41 percent of the business-as-usual scenario by 2030. With regard to the FOLU sector — which covers emissions and removals of greenhouse gases from anthropogenic land use, land-use change and forestry activities — commitments to help reach the NDC targets include restoring 2 million hectares of peatlands and rehabilitating 12 million hectares of degraded land by 2030.

REDD+ (Reducing Emissions caused by Deforestation and forest Degradation) initiative is an important component of achieving targets from within the land use sector. An international policy initiative, which was initially discussed at COP11 in 2005 and fully recognized 10 years later in the Paris Agreement, REDD+ was specifically designed to provide incentives to curb the release of emissions through conservation of tropical forests.

Under the initiative, Forest Reference Emissions Levels (FREL) are monitored and measured against a benchmark for evaluating REDD+ performance set based on the period between 1990 and 2012. Indonesia’s first FREL for REDD+ was submitted to the U.N. Framework Convention on Climate Change (UNFCCC) secretariat in 2015, and covered deforestation, forest degradation and peat decomposition. First FREL and plan to submit the 2nd FREL by the end of 2020.

More than 40 participants from government and non-governmental organizations participated in the CIFOR-ICRAF event in December, discussing Indonesia’s economy, national priorities and strategies for achieving NDCs and transforming the FOLU sector.

“Indonesia’s economy is expected to improve,” said Nur Hygiawati Rahayu, director of Forestry and Water Resource Conservation in the Ministry of National Development Planning of Indonesia (BAPPENAS). “We estimate that Indonesia will emerge from the middle-income trap in 2036 and become one of the top five income countries in 2045.”

This economic potential could influence Indonesia’s capacity to reach its targets, she added,  The NDC target is also a potential challenge in technical terms and in terms of politics for to this end, we need to study what the impacts will be in the future.

BAPPENAS anticipates the need for land use change for social development such as housing, agriculture and other uses.

Overall, balancing development and keeping emissions low will be a big challenge for Indonesia.

“For several years we have been one of the top 10 greenhouse gas producing countries,” she said. “We have to convey to the world that Indonesia still needs to develop, but we are committed to reduce emissions.”

REDD+ FRAMEWORK

CIFOR-ICRAF, together with partners, implemented the GCS-REDD+ program in 18 countries since 2009. The fourth phase, which started last year and runs until 2023, focuses on Democratic Republic of Congo, Indonesia, Peru, and select activities in Brazil.

“We have gathered a lot of scientific data,” said Bimo Dwisatrio, senior research officer at CIFOR-ICRAF. “In Phase 4, the GCS-REDD+ project is divided into five work packages.”

“First, we will look at archetypes of tropical deforestation and degradation in general,” he said. “ Then, we will explore archetypes for Indonesia in general, closing data gaps and methods more quickly, more accurately and also with a higher level of reporting on greenhouse gas emissions and the FOLU sector with a special emphasis on large carbon reservoirs.”

During the second work program, scientists will map out effective policy interventions. The third program will work toward understanding resistance to change and power relations that enable change. In the fourth program, the focus will be on integrating the understanding of drivers and context of deforestation and forest degradation from the first program, the impacts of policies and actions in different contexts in the second program and understanding of the political space in the third program. It will propose targeted interventions and increase engagement from key stakeholders in the four priority countries.

The Government of Indonesia has highlighted four issues related to the work of the GCS-REDD+ project: careful consideration the rights of women, Indigenous Peoples and local communities as they relate to livelihoods; the principle of common but differentiated responsibilities and respective capabilities stated in the Paris Agreement; Indonesia’s ongoing major effort in providing wider access to social forestry program; and lastly, REDD+ benefit sharing through prior agreement and commitment.

COMMUNITY CONSCIOUS

Indonesia included plans in its Long-Term Strategy for Low Carbon and Climate Resilience   document to reach net sink emissions in the FOLU sector as an important component of achieving its NDC targets.

“The land sector should include social forestry, since it is about forest management by the community,” said Daniel Murdiyarso, a CIFOR-ICRAF principal scientist. “REDD+ mitigation at the national level statistically recognizes land cover change and does not specify other land use under social forestry management.”

Including social forestry in FOLU calculations can create a more comprehensive approach to determining how it will contribute to carbon net sink in 2030, he added.

In Indonesia, 12.7 million hectares of state forest are designated for Indigenous or local community management, with 4.8 million hectares under management by local communities.

The social forestry program is governed by the Ministry of Environment and Forestry (MoEF) sustainable forest management (SFM) program. It formalizes community-based sustainable forest management.

“Social forestry is one of the sectors where SFM can be achieved,” said Dyah Winarsih KLHK. At the same time it can also be a threat when done without proper management. It is necessary to study the extent of the current situation, the opportunities for achieving SFM, or whether it needs to be improved,” said Dyah Winarsih, a representative from MoEF.

CARBON MARKET KICKS OFF

In November, Indonesia also introduced a presidential regulation on the Economic Value of Carbon (NEK), which paved the way for a market mechanism for carbon trading to contribute to meeting greenhouse gas reduction targets by 2030.

“We are preparing a carbon economic value (NEK) scheme, especially levies on carbon,” said Joko Tri Haryanto from the Fiscal Policy Agency of the Ministry of Finance (Kemenkeu). The carbon tax will be carried out on two levels – carbon trading and carbon tax. Both the schemes are voluntary in principle.”

The NEK instrument will be regulated into trading entities that will initiate the offsetting mechanism and through non-trading levies applied to carbon, with the potential imposition of carbon tax and results-based payments, primarily through REDD+. To date, there are three ongoing REDD+ projects: the Forest Carbon Partnership Facility  in the province of East Kalimantan, the Jambi Sustainable Landscape Management Project in the province of Jambi and the 2014-2016 REDD+ payments via the Green Climate Fund.

“Carbon tax will be imposed by the first of April, 2022 to the coal sector until 2024,” Joko said. “By 2025, other sectors contributing to the NDC, including land-based sectors, must be prepared to begin the era of carbon taxes.

Carbon tax essentially puts a monetary value on the real value of greenhouse gases emissions, or taxes emitters.

This research is part of CIFOR’s Global Comparative Study on REDD+. The funding partners that have supported this research include the Norwegian Agency for Development Cooperation (Norad, Grant No. QZA-21/0124), International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU, Grant No. 20_III_108), and the CGIAR Research Program on Forests, Trees and Agroforestry (CRPFTA) with financial support from the CGIAR Fund Donors.

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