Will REDD+ help save Indonesia’s forest, or create ‘carbon cowboys’ instead?

The development of REDD+ in Indonesia as an experiment in bringing together carbon abatement, equity development and biodiversity protection is continuing to attract global attention. Simon Pollock reports.

During the past few years, the concept of REDD+ has emerged to protect forests and safeguard the livelihoods of those who live within and near them by providing a financial value for carbon left stored in forests.

Through REDD – which stands for Reducing Emissions from Deforestation and forest Degradation – outside sources provide financial incentives to developing countries to help them safeguard their forests. REDD’s genesis goes back to the 11th international climate change meeting in 2005 in Montreal, when Costa Rica and Papua New Guinea raised it as an equitable payment system for storing carbon.

The “+” was added to REDD at the 13th international climate change meeting, or Conference of the Parties (COP), in Bali in 2007. This followed concerns by some developing countries and NGOs that a reliance on payment for carbon abatement alone could actually prove damaging to the environment and local people.

For instance, there was a fear that an economic incentive to store carbon in forests could lead to the spread of monoculture plantations that undermined the biodiversity of forested areas and displaced local people who rely on originally standing forests for their livelihoods. In 2007, forest conservation elements were added as REDD+, amid wider moves to ensure REDD funds do not lead to social or environmental damage.

The international deal that provides detailed guidelines on how REDD+ should work was facilitated in part by experimentation with its early introduction in Indonesia. Indonesia is a major frontline country in attempts to introduce REDD+ because of its large forested areas and its strong past stance on tackling climate change.

In 2009, Indonesia became the first developing country to voluntarily pledge to reduce greenhouse gas emissions—committing to cutting emissions by 26 to 41 per cent from predicted business-as-usual 2020 levels by tackling forest fires and deforestation. This decision led the United Nations Environment Programme (UNEP) to nominate former Indonesian President Susilo Bambang Yudhoyono as a Champion of the Earth.

In another first, President Yudhoyono signed a letter of intent with the Norwegian government in 2010 to reduce forest-based gas emissions in return for financial REDD+ support of up to $1 billion. The agreement included establishing a moratorium on licensing further forest clearing. The Indonesian government also decided to set up an independent body to implement REDD+. At the end of 2013, Yudhoyono established the National REDD+ Agency, known in Indonesia as BP REDD+.

Is Jokowi serious about saving forests?

Ironically, the inauguration mid-last year of Yudhoyono’s successor Joko “Jokowi” Widodo – hailed at the time as a progressive political figure – has been followed by a questioning of how serious Indonesia is in reducing deforestation and tackling climate change. As anticipated, in May this year, President Jokowi extended the moratorium on forest clearing. However an earlier decision in January to abolish BP REDD+ a little over a year after it had been formed raised eyebrows.

It is expected that REDD+ will account for about 20 per cent of the mitigation funding for the Green Climate Fund.

Peter Graham, WWF’s Forest and Climate Programme team leader

The stated rationale behind this decision was that it was part of Jokowi’s wider move to reduce bureaucracy in the Indonesian Government. The functions of BP REDD+ have been subsumed into a new government department, based on the merging of the formerly separate ministries of environment and forestry.

BP REDD+’s former head Heru Prasetyo, however, told Mongabay that the abolition of his organization means “REDD+ now has a bleak future as a brand here in Indonesia.” But Heru added that while REDD+ will lose its appeal as a rallying point in Indonesia, the ideas behind REDD+ are likely to persevere there – as long as they are accompanied by continuing governance reform in the country’s land management sector.

The jury is still out on whether the restructuring of Indonesia’s government agencies dealing with forest management will prove to be advantageous to REDD+ or not.

“The changes to the REDD+ bureaucracy in Indonesia, following Jokowi’s election, did create some disruption of Indonesia’s steady progress towards a REDD+ policy framework at the national level,” said Arjuna Dibley from the global law firm Baker & McKenzie, which has worked on REDD+ issues for a number of years in Indonesia. “However, it appears that the government’s new institutional settings for REDD+ are starting to become settled, with officials from the Ministry of Environment and Forestry again talking about REDD+ publicly,” Dibley said.

Some Indonesian REDD+ watchers hope the new Ministry of Environment and Forestry will lead to more sustainable forest practices, said Associate Professor Andrew McGregor, a geographer at Australia’s Macquarie University who has done extensive research into REDD+ in Indonesia. “Others though are concerned that little will change – powerful interests in the forest sector may continue to overshadow environmental concerns.” he added.

While it may be too early to appraise Jokowi’s track record in protecting Indonesian rainforests, the concept of REDD+ itself is not free of controversy.

“REDD+ and the idea of money incentive has split some communities in Indonesia,” said Adriana Sri Adhiati, a member of Watch Indonesia!, a German-based NGO focusing on environmental protection and human rights in Indonesia. Sri Adhiati told Mongabay her consultation with communities in Indonesian areas where REDD+ has been trialled – including the provinces of Aceh, Kalimantan and Sulawesi – showed poor communication meant many local people did not understand what REDD+ is.

“Once there is an idea of payments but not enough information, this creates rivalries between communities,” she said. Such social discord is greatly exacerbated when local government officials engage in “irregularities” over the allocation of land for REDD+ and other uses, said the environmental campaigner, who has been following Indonesian REDD+ issues for the past eight years.

Various studies show corruption continues to mar the effective management of Indonesia’s rainforests. According to a recent Mongabay investigation of Jokowi’s environmental challenges, more than half of the country’s district heads have been linked to graft during the democratic transition following the fall of former President Suharto.

In many cases, the district heads were seen to have traded forest licences for bribes to fund election campaigns. London-based NGO the Environmental Investigation Agency (EIA) claims palm oil firms are able to routinely ignore requirements to gain permits before harvesting felled trees within their concessions.

Effective governance key to REDD+ success

It is clear is that governance reform will remain a crucial issue in curtailing the destruction of rainforests in Indonesia. AUniversity of Maryland study of satellite data last year found that 40 per cent of forest clearing in Indonesia was illegal. The study – by an Indonesia forestry employee seconded to the US university – indicated that, despite the country’s logging moratorium, tropical rainforests are being destroyed at a faster rate than in Brazil, making Indonesia likely the world’s biggest deforesting nation in terms annual forest loss.

But gaining a true appraisal of the extent of illegal logging is always going to be problematic as these activities are clandestine. What is less contested is that a central part of the solution must involve finding profitable ways of keeping trees in the ground. The relatively high return of palm oil plantations certainly adds to this challenge. Along with Malaysia, Indonesian accounts for  of the world’s palm oil production.

In Indonesia, the world’s largest producer and exporter of palm oil, this fast-growing cash crop generates almost $20 billion a year and employs millions. A major part of palm oil’s profitability stems from its versatility as it is used in food products, soaps, cosmetics, livestock feed, and even as a biofuel.

How to counter palm oil profits?

McGregor, the Macquarie University academic, says money from REDD+ will never equal profits from the development of palm oil plantations. “Palm oil wins every time as these plantations provide quick and easy ways to make money,” said McGregor.

McGregor added, however, that REDD+ does have the potential to provide developmental gains, beyond profit considerations alone.

“REDD+ has brought positive developments in terms of improving forest governance and in recognising the rights of indigenous people,” he said. “It has helped to open up the black box of the former Ministry of Forestry in managing these areas, while recognising the need to establish who actually owns the land in which the forests are growing.”

McGregor stressed that to be successful, REDD+ will need to continue to provide environmental and social benefits, and move away from past “mistaken thinking that it would provide a quick and easy solution based on market forces alone.”

Funding REDD+

REDD+ was founded on the belief that a global emissions trading scheme was soon to emerge. According to this elegant but rather optimistic economic thinking, corporations or public bodies responsible for major greenhouse gas emissions would be able to purchase the right to continue and offset these activities by buying credits that funded emission abatement elsewhere.

Under REDD+, individuals and communities in developing countries could then be paid to keep trees in the ground through REDD+ credits issued to emitters in developed countries.

Analysts say hopes remain in some quarters that a global emissions trading scheme will emerge eventually. in the near term. The oversupply of emission reduction credits in the largest existing carbon market, the EU Emissions Trading System, means that abatement prices for reducing emissions there continue to be low. Also, the EU has decided not to consider linking REDD+ to the EU Emissions Trading System before 2020.

Some critics, such as the energetic blogger Chris Lang and his website REDD Monitor, believe it is better not to put too much market into REDD+ anyway. This is based on a belief that allowing developed countries to provide payments to developing countries in REDD+ offsets allows the developed countries to continue polluting. Lang and others have also expressed a concern that using the market to promote forest-stored carbon will fuel another commodity bubble and generate “carbon cowboys” – traders with little experience in forest conservation who put profit above local people’s welfare.

Regardless of the pros and cons of tapping the market to pay for REDD+, a dearth of current opportunities means ODA funding from developed countries is likely to remain the major component of REDD+ finance in the near term. Peter Graham, WWF’s Forest and Climate Programme team leader, said REDD+ has outgrown its original conception as a fund-raising mechanism based on a single global market of emissions trading.

“However, there are a number of sources beyond the market which can provide REDD+ funding,” Graham said. “For instance, it is expected that REDD+ will account for about 20 per cent of the mitigation funding for the Green Climate Fund,” he added, referring to abatement funding from the UN’s main body disbursing climate change-focused development aid. Graham pointed out that while there have been few recent REDD+ financing pledges by developed countries, he anticipated a tranche of new announcements around the seminal climate change negotiations in Paris.

Voluntary corporate funding also represents possible sources of increased future REDD+ financing. A number of businesses have already made decisions to boost their status as responsible global entities by translating some of their profits into voluntary REDD+ payments. Indeed, in 2014, REDD+ payments overtook the historical place of offsets based on wind power to become the word’s top-selling type of voluntary carbon market.

Indonesia’s rising REDD+ relevance

The development of REDD+ in Indonesia as an experiment in bringing together carbon abatement, equity development and biodiversity protection is continuing to attract global attention.

Finding imaginative ways to fund REDD+ or other rainforest protection models will be necessary if deforestation is to be halted in a meaningful way in Indonesia, as well as in other countries that are home to extensive tropical forests. A recent WWF study found that current pledges by major forest countries to halt deforestation will account for only a 30 per cent cut to the total expected loss of trees across the world’s deforesting tropical countries.

Ultimately, in a broader sense, all attempts will be needed to tackle climate change. The International Energy Agency released a report in June this year showing that current national commitments to cut greenhouse gases are still insufficient to keep the world from warming two degrees Celsius or more above preindustrial levels.

Whether or not regional haze from Indonesian forest fires sets a pall over Indonesia’s ties with its neighbors this year, the imperative of preventing a warming world looks set to keep international attention focused on helping Indonesia preserve its remaining forests.

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