An innovative effort to keep trees in the ground and carbon out of the air is paying dividends in Indonesia — the fifth-highest emitter of carbon dioxide globally.
Norway announced on 16 February that it will pay Indonesia for reducing its deforestation by 60 percent in 2017, as compared to 2016. The payment is to be made as part of a REDD+ partnership established in 2010. An acronym for ‘reducing emissions from deforestation and forest degradation’ – with the ‘+’ including conservation, sustainable forest management and carbon stock enhancement – REDD+ provides a framework for developed nations to pay developing nations for protecting forests.
With its emphasis on reducing carbon emissions linked to greenhouse gases and global warming, the initiative is also a key part of the Paris climate agreements to limit temperature rise.
According to Indonesian Minister of Environment and Forestry Siti Nurbaya, Indonesia has decreased the annual deforestation rate from 1.09 million hectares to 480,000 hectares between 2014 and 2017. The archipelago’s tropical forests play an important role in absorbing carbon and are home to indigenous communities and rare wildlife and biodiversity.
Based on estimates of averted carbon dioxide emissions – some 4.8 million tons – Norway will pay Indonesia an amount expected to be in the range of roughly USD 24 million. Norway and Indonesia are still negotiating the transaction, and the funds are anticipated to be used by the Indonesian government to help underwrite environmental initiatives.
“The calculation of the emission reduction is similar to what is done for other countries, i.e. a historical average as the reference level, and emissions below that is considered an emission reduction,” explains Arild Angelsen, a professor of economics at the Norwegian University of Life Sciences and REDD+ expert.
Now a decade old since it first came about as REDD (sans ‘+’), the REDD+ program is now seeing countries reach the stage when they can be paid for the fruition of their efforts. Brazil reached a landmark agreement this year and is expected to receive about USD 96 million for reducing 19 million tons of emissions, although some questions remain about the accuracy of the program and the country’s commitment to deforestation due to recent changes in its government. In Southeast Asia, Vietnam completed key REDD+ requirements at the end of 2018 and is now eligible to receive payments as well.
“Compared to the payments to Brazil, [the payment to Indonesia] is small, but compared to past payments to Indonesia, it’s not,” says Angelsen.
Indonesia is home to the third-largest swath of rainforest after Brazil and the Democratic Republic of Congo. But in recent years, drought, wildfires, logging, salt water intrusion and palm oil plantations have all taken their toll on Indonesia’s forests. The Southeast Asian nation designates 42 percent of its forests for commercial use.
The 60 percent reduction in deforestation is seen as significant sign of progress for Indonesia and a key indicator its government has improved national forest oversight. Under the 2010 pact, Indonesia agreed to first establish forest protection regulations and frameworks before implementing action on the ground. After a setback in 2015 when Joko Widodo stepped into office as president and temporarily disbanded the REDD+ coordinating agency established by his predecessor, the initiative has since made steady progress.
In 2016, President Widodo issued a moratorium on new permits for oil palm and mining, which were main causes of the devastating fires that occurred in 2015 due to peatlands being drained and dried for agriculture and development.
Last fall, President Widodo also imposed a three-year moratorium on licenses for new palm oil plantations. Although used in products such as cosmetics, biofuel and as a food additive, palm oil has generated controversy due to destructive environmental and employment practices. However, the International Union for Conservation of Nature (IUCN) has said the ban, with its loose enforcement, could simply push forest clearing elsewhere such as peatlands.
President Widodo has pledged to reduce the country’s carbon emissions by 29 to 41 percent by 2030 and has floated the idea of a future moratorium on new coal mines.
Boosted by revenue from its oil reserves, Norway is making its payment under the Norwegian International Climate and Forest Initiative (NORAD). The initiative funds tropical forest protection programs globally.
“Norway wants to pay Indonesia to keep the trees standing and store the carbon in the trees, and this is a first step in that direction,” says Angelsen. “This is also an important way to show results-based payments can thrive too.”
A wetter rainy season that helped dampen forest fires and lower palm oil prices, in turn diminishing incentives to develop more palm oil plantations, also contributed the country’s decrease in tree loss in 2017.
Forest protection can sometimes be a tough sell in Indonesia given the large role of resource extraction in the country’s economy, but the success in receiving payment from Norway could attract more foreign funding for national conservation programs. The REDD+ program also benefits from success stories such as Indonesia’s in keeping momentum and proving its use.
“The payment is especially significant in the Indonesian context – creating domestic awareness of forest issues, national pride, and confidence that future payments can be earned and rewarded,” said Frances Seymour, a distinguished senior fellow at the World Resources Institute, in an email.
Said Angelsen, “It appears it took a few years for the  moratorium to start biting, but this is great news.”