1. Tropical Deforestation in Indonesia Katrina Severinkatseverin@gmail.comEnergy LawProfessor Fred Bosselman December 8, 2010

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

3. 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

4. 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

5. 2. Indonesia • Sumatra • Kalimantan • Sulawesi

6. Top Greenhouse Gas Emitters MtCO2e • peat decomposition • peat fires/slash and burn • forestry/land use changes 2007 World Bank

7. Causes of Forest Loss in Indonesia • Corrupt rule • Weak protection of • communities rights • Unenforced laws • Short term economic growth

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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.

15. 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

16. Prospects for success? PNG 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 • 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

17. 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

18. 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 !