Indonesia and Norway inked a deal last week to take concrete actions to reduce Indonesia’s deforestation emissions. Indonesia is the world’s 3rd largest emitter of global warming pollution (when deforestation emissions are included) so this is a very important effort. The deal between Indonesia and Norway was reached in the lead-in to the Oslo forest conference where over 50 countries agreed to a new Partnership to address deforestation (as I discussed here). The deal with Indonesia is a critical agreement as it requires action from the Indonesian government and assistance from the Norwegian government to make a serious dent in the loss of Indonesia’s forests.
“Indonesia stands by its commitment to reduce our emissions by 26 per cent relative to business as usual levels by 2020. This we will do out of our own funds through a set of measures I will be announcing in the near future.” With the help of international partners, we could reduce our emissions by as much as 41 per cent”
This is a commitment made by Indonesia as a part of the Copenhagen Accord (as we’ve tracked here). Its efforts to reduce deforestation will be critical to meeting that commitment as deforestation accounts for the majority of Indonesia’s emissions. So the actions of Indonesia and Norway are an important component of ongoing efforts to implement specific actions to meet the commitments of these countries to reduce global warming pollution.
This agreement couldn’t come soon enough as Indonesia loses an area the size of approximately 12 football fields every day to deforestation. So what have they agreed to do immediately to stop this trend?
Details of the package are just emerging, so here are some of the core elements that have emerged to date. Some of which have been spelled out explicitly in the Letter of Intent (LOI) between Norway and Indonesia and others have been reported in the press by leading Indonesian officials (I’ll note where they are explicitly in the LOI).
Indonesia will place a 2 year moratorium on granting new concessions for rainforest and peat forest clearing beginning in 2011 (in the LOI). Concessions already granted to companies will not be stopped (a point that it seems will be one of the actions stemming from the agreement as I’ll discuss below). This is an important freeze as it will essentially stop digging the hole by not granting more permits for future deforestation. It is expected that this moratorium will be enshrined in an Indonesia Presidential decree, which hopefully will send a clear signal that this is real and will encourage cross-ministry coordination (both have been challenging issues in Indonesia in the past).
Norway will commit $1 billion to assist Indonesia in taking specific actions (in the LOI). The agreement is to be implemented in three phases:
1. “Preparation”. Beginning immediately the countries agree to specific steps including to:
- Complete a national forestry strategy;
- Establish a special agency reporting directly to President to coordinate efforts;
- Create a funding mechanism to be managed by an internationally reputable financial institution to ensure that money is properly spent, managed, reported, and accounted; and
- Select a province-wide pilot effort to reduce deforestation (the “province must have large intact tracts of rainforest and face planned deforestation and forest degradation projects of a scale that will have significant impact on national emissions levels if implemented”).
2. “Transformation”. Starting in January 2011, they will begin the second phase which is to make Indonesia ready for contributions based on verified emissions reductions (the 3rd phase) while also “initiating large scale mitigation action[s]”. Steps outlined in the agreement include to:
- Develop a country-wide system for monitoring, reporting, and verifying emissions associated with deforestation and forest degradation, including independent international verification.
- “Indentify, develop and implement appropriate Indonesia-wide policy instruments and enforcement capabilities” including: a 2 year suspension on all new concessions (as reported above), establish a database of degraded lands so that economic activity can be focused on these lands instead of converted peatland or natural forests; and enforcing existing laws against illegal logging and trade in timber.
- Implement a province-wide pilot program to reduce deforestation emissions to begin in January 2011 and possibly a second to begin in 2012.
3. “Contributions for Verified Emissions Reductions”. Funding for the first 2 phases will be made on the basis of performance, but not necessarily on the basis of achieving specific emissions reductions. So Phase 3, to begin in 2014, will be based upon implementing a national system of “contributions-for-verified emissions reductions”. The system will be based upon annual contributions to Indonesia for independently verified national emissions reductions below an agreed deforestation “reference level”.
Indonesia will revoke existing forestry licenses held by palm oil and timber firms. A key Indonesian official announced that as a part of the funding from Norway, the government will spend part of the money to compensate businesses that have existing concessions (as reported by Reuters). The story reports that Agus Purnomo, head of the secretariat of Indonesia's National Climate Change Council, clarified that:
Compensation to permit holders could include cash, land swaps or other "amicable, workable and realistic solutions"
Permit holders will find out within six months if their concessions will be honoured, he said. "Some of them don't have a valid permit, they are just making a claim," said Purnomo. "If they don't have a valid permit, we are not going to compensate. If they are getting it through bribery, we are not going to give" compensation.
This agreement includes three critical elements that are essential to addressing deforestation. First, it includes clear political will by Indonesia that it wants to take critical steps to address its deforestation emissions (and it aims to establish some lasting institutions and structures to ensure that this will is signaled across all relevant players in the country). Second, the agreement includes concrete steps that Indonesia will take. And recent statements from key government officials provide additional signals that they are moving in the right direction. Lastly, it sets aside dedicated resources from Norway to support Indonesia in implementing specific measures.
President Obama is expected to make a trip to Indonesia later this month, where there are rumors that the US and Indonesia will announce a partnership on deforestation reductions. We expect that the US adds to and complements the promising signs emerging from the Indonesia and Norwegian agreement.
Hopefully this agreement and the subsequent US one will help set Indonesia on a path to addressing its global warming pollution from deforestation. We’ll have to await further details and the implementation of specific steps before passing final judgment, but the signs are promising.