Indonesia is welcoming a newly emerging forest carbon mechanism, Reducing Emissions from Deforestation and Degradation (REDD), as a means to mitigate climate change. Nearly 20% of global CO2 emissions are released into the atmosphere as a result of deforestation, and many see the prevention of these emissions as relatively inexpensive way to combat climate change. Under REDD, industrialized nations will be able to offset their carbon emissions by paying millions of dollars to tropical countries in return for not cutting down trees. Not only would REDD help combat climate change, but it would also theoretically protect some of the most important ecosystems on the planet.

Morning mist in Berau, East Kalimantan

With the third largest area of tropical rainforest in the world (after Brazil and The Congo), Indonesia is poised to reap substantial benefits from this scheme. REDD also could potentially improve the country’s forest management and enhance local livelihoods, and ultimately promote sustainable development.

In reality, however, things are not so simple. There are growing concerns about how to share revenues equitably among different stakeholders. To establish a transparent and accountable method for REDD’s benefit distribution, Indonesia’s Forestry Ministry announced revenue-sharing rules this past summer. Depending on how the forest is officially classified, revenues are shared differently between each stakeholder – the central government, project developers, and local communities. For example, in Indigenous Forests (Hutan Adat), local communities would receive 70% of the revenue, the project developer 20%, and the central government only 10%. While in Protected Forest (Hutan Lindung), this proportion is split 20%, 30%, 50%, respectively.

Despite these revenue-sharing rules, the REDD scheme has the potential to increase land-use conflict, unless legal land rights are clearly defined. In Indonesia, land-use practices by different groups often overlap. Areas in which timber companies hold government-issued logging concessions are, in general, inhabited by local communities as well. To make things even more complicated, local communities are generally not static monocultural groups of people. Among local communities, different identities often exist – indigenous people, local ethnic groups, religious communities, immigrants, and trans-migrant workers. These identities create the notion of “insider” and “outsider,” making revenue-sharing difficult and contentious. Indonesia’s forest management plan under the REDD implementation scheme only identifies the government, developers, and communities as main actors, and fails to recognize the dynamics of local communities. Conflict may occur when each actor aims to protect their rights from “outsiders” and secure a fair share of revenues generated from REDD.

A community meeting to discuss forest management

Another challenge for REDD stems from Indonesia’s regulatory climate in which national, regional, and customary laws are separately practiced and make administration processes highly complicated, opaque, and even contradictory. This creates loopholes and provides plenty of opportunities for corruption. Without law enforcement and transparent regulatory systems, the lucrative nature of REDD could spread corrupt activities by certain political elites. Forest dwelling communities, who play the central role in conservation and sustainable forest management, may never see the benefit of REDD. In this case, they will be exploited and worse off because REDD would not only bring little monetary compensation but also limit access to their traditional territories and forest resources. Their frustration and resentment could eventually lead to violent conflict.

REDD still has a long way to go before it can be practiced at the national level in Indonesia. The REDD mechanism needs to be developed step-by-step because there are numerous environmental, social, economic, and political factors that must be carefully considered at the local level. Further clarifying the incentive-sharing componenents of REDD is the next important step to achieve consensus among all stakeholders. Nonetheless, to prevent conflict as a result of REDD, the Indonesian government must first introduce legislation to govern the carbon trade, establish a transparent monitoring system, strengthen institutional capacity, and most importantly, understand local communities’ stake in the immediate condition of the forest.

A Dayak Women - East Kalimantan

Sources:

Mongabay: Indonesia releases revenue sharing rules for REDD forest carbon projects

Reuters: Indonesia issues first forest-carbon revenue rules

The Economist: Last gasp for the forest

Rumi Naito is a second-year graduate student at the School of International and Public Affairs, Columbia University. Her research includes governance and sustainable forest management in Southeast Asia. Last summer, she worked for The Nature Conservancy in East Kalimantan, Indonesia where she helped developed the capacity of local communities to combat illegal logging and improve forest governance. She is currently working with The World Agroforesty Center on the role of different stakeholders in the forthcoming REDD climate change mitigation mechanisms in Indonesia.