Source : International Centre for Trade and Sustainable Development (ICTSD) – July 19, 2011
By Hans Brattskar
Through his unilateral pledges for ground-breaking climate change action, President Susilo Bambang Yudhoyono has positioned Indonesia as one of the global
leaders on climate change. If Indonesia succeeds in reducing emissions by 26 percent from expected levels by 2020, 750 million tonnes of carbon emissions could be saved annually, potentially equalling as much as 5 percent of what is needed on a global basis to meet the target of capping climate change at maximum increase of 2 degrees Celsius. To support these remarkable efforts, Norway has pledged US$1 billion in support to Indonesia, to be paid based on independently verified results in reaching the goals.
With its 240 million people, Indonesia is the world’s fourth most populous country, and the country with the largest Muslim population in the world. It has the world’s third largest tropical rainforest, and has the highest number of plant and animal species of any country on the planet. Indonesia’s rainforest covers an area of 1 million square kilometers. It is Southeast Asia’s largest, and the world’s seventeenth largest, economy, with an economic growth rate of around 6 percent.
Indonesia also has the world’s third largest greenhouse gas emissions, after the US and China. Approximately 78 percent of these emissions stem from deforestation and forest degradation, as well as the conversion and burning of carbon-rich peatlands to plantations. Jakarta estimates that, in a business-as-usual scenario, the total emissions are expected to increase to three billion tonnes of CO2 by 2020; emissions from forests make up as much as 50-60 percent of this total. Globally, emissions from deforestation and forest degradation in developing countries account for approximately one-sixth of the total emissions.
At a G-20 meeting in Pittsburgh in 2009, Indonesia’s President Yudhoyono delighted the world by making a significant commitment. He promised that Indonesia would reduce emissions by 26 percent from expected emissions levels in a business-as-usual scenario by 2020 without international assistance and by as much as 41 percent with international assistance. President Yudhoyono’s pledge to reduce emissions was – together with a similar pledge from President Lula da Silva of Brazil – the most significant made by any developing country in the context of climate change.
Climate change and economic growth
Almost half of Indonesia’s population still lives below the UN poverty line of US$2 a day. Food prices have increased. Indonesia’s planned reduction in
deforestation should not hamper development. While economic growth is key for achieving social and environmental goals, long-term economic growth and lasting competitiveness can only be secured through environmentally sustainable and climate-friendly development policies. Efforts to battle climate change, poverty, and food, water and energy insecurity, are mutually reinforcing.
As made clear by President Yudhoyono, the only way to truly succeed with any of these goals is by striving to reach them all. In Indonesia, two aspirations are
intertwined through the President’s 26/7 goal, which refers to the goal of 26 percent reduction in emissions and the President’s stated goal of reaching 7 percent annual economic growth by 2014. Climate change, economic growth and poverty reduction is at the forefront of politics in Indonesia, demonstrated by the President’s four main goals for his presidency: pro jobs, pro poor, pro growth and pro green.
Indonesia is the world’s twenty-seventh largest exporter overall, and the largest exporter of palm oil. The increasing global demand for minerals, logs, paper and palm oil is among the main drivers of deforestation and peat-land destruction. Logging does not in itself lead to deforestation, but may, if not carried out sustainably, destroy the forest to such an extent that the area is eventually reclassified and made accessible for plantations. Moreover, unsustainable logging contributes significantly to CO2 emissions, as well as the loss of biodiversity and livelihoods that depend on the ecosystem services of intact natural forests.
As the Indonesian governments REDD+ strategy makes clear, with sufficient political control and satisfactory land-use planning, forest-based industries such as palm oil and pulp-and-paper may continue to contribute to economic growth, without destruction of natural forests and peat lands. According to some estimates, Indonesia may have as much as 35 million hectares of degraded land, and has offered to allocate the expansion of plantations and other economic activities to already-degraded or low-carbon areas. This proposition raises new challenges in the form of the need to sort out land use rights in these areas – so there are no simple solutions – but they can be handled as part of a more comprehensive, less carbon-intensive approach to land use, tenure and spatial planning.
If Indonesia succeeds in reducing emissions by 26 percent from expected levels by 2020, as much as 750 million tonnes of carbon emissions could be saved annually, potentially equalling as much as 5 percent of what is needed on a global basis to reach the 2 degrees target.
The pledge and the partnership
On 26 May 2010, Indonesia and Norway signed a letter of intent, during the Oslo Climate and Forest Conference. Norway will pay for results delivered in three phases, first in the form of institutional development, capacity building, forest governance reform and enabling policies, and eventually, from 2014, for independently verified emission reductions.
It is essential to emphasise, from a Norwegian viewpoint, that we are supporting an already established Indonesian effort. REDD+, or any aspect of low carbon growth for that matter, cannot and should not be imposed from abroad; it must be domestically owned and run. That is why Norway is proud to support President Yudhoyono’s and his Cabinet’s efforts.
Based on Indonesia’s priorities, the mutually agreed deliverables for the first phase include a comprehensive, national REDD+ strategy addressing all significant drivers of deforestation and forest degradation; an independent REDD+ Agency, reporting directly to the president; an independent institution for monitoring, reporting and verifying forest emissions; development of a financial mechanism and benefit sharing system according to international fiduciary, social and environmental standards, and the identification of a pilot province for experimenting with results based support for measures and policies to reduce emissions from deforestation and degradation of peatlands.
In Oslo in May 2010, President Yudhoyono also declared that he would introduce a two-year moratorium on conversion of natural forests and peatlands. One year later, the president launched a two-year suspension on the issuance of new licenses for conversion of primary forest and peatlands. The moratorium may help facilitate the president’s 2020 goals, and constitutes an important part of a broader forest and land use reform agenda in Indonesia, though it will not in itself ensure success. Transparency and multi-stakeholder involvement in all stages of implementation will be crucial to achieve precise coverage and reconciliation with other land uses, including existing concessions that cover large areas of the country. The moratorium, however, only signals the beginning of more comprehensive forest governance reform, which over the next couple of years may encompass increased efforts against illegal logging and clearing of forests, prosecution of organised forest crime, review of existing concessions, land tenure and conflict resolution mechanisms for dealing with overlapping land claims.
What Indonesia is embarking on is a very serious development choice. The ultimate goal of the Indonesian-Norwegian partnership is to pay for results in the form of emission reductions from deforestation and forest degradation within 2014 (phase III), and earlier in the pilot province. The magnitude of the financial contributions from Norway in this phase will depend on the extent to which Indonesia succeeds in reducing emissions.
Before reaching this phase, however, an annual evaluation will be carried out by a third-party identified by international tender, which will verify results in phase I and phase II. Their work will be based upon deliverables identified in a mutually agreed joint concept note, which again is derived from Indonesia’s REDD+ priorities and ambitions. The verification reports will form part of the basis of payments from Norway before phase III. The third party will verify the progress in delivery of mutually agreed enabling policies and forest governance reform measures. The first report, undertaken by the Finnish consulting firm Gaia Ltd in association with Creatura Ltd, noted good progress in a number of areas, as well as the challenges involved in completing the remaining, and most difficult deliveries related to institutional responsibilities and monitoring of emissions.
The challenge of climate change remains a global one, and we continue to need a plan in the form of a global regime if we are to reach the 2 degree target. Only the United Nations can offer this framework.
However, greenhouse gas emissions continue to rise towards a dangerous tipping point, without waiting for diplomatic solutions. In addition to the negotiation track, therefore, an action track is needed. Norway’s partnership with Indonesia is one of many elements of this action track. In the years to come Indonesia’s efforts may contribute significantly to reducing the global emissions from deforestation and forest degradation.
As mentioned, REDD+ cannot be imposed from abroad, but must be domestically owned and run. Over the past few years, a broad constituency of forest countries has emerged, eager to get REDD+ off the ground.
Now, adequate, predictable and sustainable medium and long-term funding is needed to deliver and reward large-scale verified results in reducing tropical
deforestation. There is every reason to be optimistic. This is an area where we can achieve significant results – even before a final international climate agreement is settled.
Ambassador Hans Brattskar is the director of Norway´s International Climate and Forest Initiative.