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As world dithers on forest carbon rules, private investors go it alone

by Fidelis E. Satriastanti | Thomson Reuters Foundation
Saturday, 7 June 2014 13:30 GMT

The villagers of Ulak Batu grow plants in their yards as part of a tree nursery programme to increase their income in Seruyan district, Central Kalimantan province, Indonesia. TRF/Fidelis Satriastanti

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Indonesia's only scheme selling forest carbon credits aims to help villagers protect nature and earn a better living too

SERUYAN, Indonesia (Thomson Reuters Foundation) - The villagers of Ulak Batu in Indonesia’s Central Kalimantan province may not be fully aware of how decisions made by business executives and governments far away affect their lives. But that is what has steered their shift from fisherfolk to plantation workers to budding forest guardians in recent years.

According to Syarian, head of the village in Seruyan district, nearly 70 percent of local people decided to drop fishing seven years ago to work on an oil palm plantation. “They had to change profession because there weren’t many fish in the (Seruyan) river anymore. It is becoming polluted ever since they opened up the lands for oil palm plantation,” the-25-year-old said.

But cutting wild grass on the oil palm plantation run by PT Best didn’t suit them, and paid very little. “Before they could earn as much as Rp 100,000 ($8) per day as fishermen but since working on the plantation…they only got paid Rp 59,000 (around $5),” said Syarian.

Things have started to change again, however, since a privately funded forest conservation initiative was set up in the Seruyan watershed in 2009, he added.

The Rimba Raya Biodiversity Reserve, made up of nearly 65,000 hectares of tropical peat swamp forest on the south coast of Borneo island, is known as the largest initiative to conserve Indonesia’s endangered species, including orangutans, sun bears, gibbons, clouded leopards and proboscis monkeys. It also aims to curb greenhouse gas emissions through a forest protection project that sells carbon credits on the voluntary market.

Rimba Raya had planned to link with the U.N.-backed “Reducing Emissions from Deforestation and forest Degradation (REDD)” scheme to compensate developing nations for keeping forests intact. But the details of how this will work are still being hammered out by climate negotiators.

Delays mean that the actions and policies of international and state institutions to prepare for REDD remain somewhat distant from what private companies are doing on the ground, investors say. This is the case even in Indonesia, where the government launched a REDD+ Agency last year to support plans to reduce its emissions 26 percent by 2020.

Earlier REDD regulations issued in 2009 by the Southeast Asian country don’t impact on sales of forest carbon credits, according to Jim Procanik, managing director of InfiniteEARTH, the company that started Rimba Raya. “It’s just taxation and regulations on how to proceed with REDD projects - it does not affect anything (in the market),” he said.

“REDD” is often used loosely as a catch-all term to describe government and private forest carbon schemes.


After gaining a license for its concession in 2010, Rimba Raya has forged ahead, and is the only scheme in Indonesia that has actually sold any carbon credits on the market. Its credits are certified by the Voluntary Carbon Standard (VCS) and the Climate, Community and Biodiversity (CCB) initiative.

Procanik said Rimba Raya has generated more credits than any other similar project internationally, derived from around 10 million tonnes of certified emissions reductions (1 tonne translates into one credit).

Half the credits have been sold, with the remaining 5 million available for sale as of 2013, Procanik said. The revenue that has come in so far will enable the project to run for the next two years. But in the absence of an official U.N. market for forest-derived REDD credits, there are challenges in finding buyers on the voluntary market.

At the local level, the scheme is starting to yield results for the people of Ulak Batu, who are eager to establish a tree nursery and field school with Rimba Raya’s backing.

“We are planning to plant 100,000 seedlings this year. We already have an agreement with Rimba Raya that they will buy seedlings from us to support their reforestation programme,” said Syarian. “We are hoping villagers will have alternative jobs to working on the palm plantation.”

The villagers are planting native trees, such as rubber, jelutong (a gum tree), and gaharu (agarwood).

They know only a little about reducing planet-warming emissions through protecting forests, which store large amounts of carbon. But they would rather safeguard their forests than see them turned into plantations, Syarian said.

“We want our forests back - ever since the oil palm plantation (was established) here, it is getting hotter and more floods are coming to our village,” he said. “I don’t know about selling carbon but if it means forest conservation, all villagers would agree (to the REDD project).”


On the banks of the southern section of the Seruyan River, villagers in Muara Dua feel the same.

“We are not clever people… We only know that protecting forests is always a good thing so we will support it,” said village head Amri Aini. “We don’t know much about REDD - we only understand that it is supposed to protect the forests. It’s a positive move.”

Muara Dua is located near the Rimba Raya reserve, and the majority of its people fish for a living, but catches have been declining in the past few years, hurting incomes. Aini said his people believe reforestation will help. “If forests are dense, fish will come back to our rivers again,” he said.

This village has developed a different programme with the Rimba Raya team, opting to purchase eight cows to breed and sell meat during the holiday season.

Procanik said REDD-style initiatives essentially boil down to rural development projects.

“You are already saving the forest when it’s not going to (be cleared) for something else - the next phase is using the money (from selling carbon credits) to help develop communities so they don’t further damage the forest and can hopefully make their lives better,” he said.

InfiniteEARTH tries to come up with alternative livelihoods that address the communities’ problems. For example, it plans to assist villagers to set up fisheries so they don’t need to rely on the river. It is also hiring local people to work as forest monitors.


Deni Bram, an environmental law expert at Jakarta’s Tarumanegara University, believes private-sector REDD initiatives need to be more tightly regulated, especially in terms of verification and reporting, if they are to help meet national carbon pollution goals.

“The emissions reductions resulting from the projects will be considered as (part of) the country’s efforts (in future)…whether it’s coming from private-sector projects or government projects,” he said.

In 2009, Indonesia was considered as a REDD pioneer after the forestry ministry issued general regulations on implementing procedures when the REDD scheme was still on the negotiating table at U.N. climate talks.

Those regulations will have to be reviewed as their legal basis in non-binding proceedings under the U.N. Framework Convention on Climate Change is weak, Bram said.  

It would be preferable for Indonesia to introduce overarching climate legislation, because “you can’t talk about REDD without talking the broader picture which is climate change,” he added.

The private sector must also move carefully in implementing projects, because international REDD guidance is still being developed and is subject to change – which may in turn influence national laws and regulations.  “It is better to wait for certainty,” Bram said, adding that REDD will be up and running by 2020 at the latest.

 But try telling that to villagers who are impatient for results. “They are pro-REDD. The only problem is we were delayed so long (for) three years,” said Procanik, referring to the time it took for Rimba Raya to receive its operating license from the Indonesian government due to bureaucratic delays.

“They are very tired of hearing about REDD – they think it is only talk, and it’s not going to happen. I can’t blame them,” he said.

Fidelis E. Satriastanti is a Jakarta-based writer with an interest in climate change issues.

This story is part of a series of articles, funded by the COMplus Alliance and the World Bank, looking at progress and challenges in developing nations’ efforts to legislate on climate change, ahead of the June 6-8 World Summit of Legislators in Mexico City, organised by the Global Legislators Organisation (GLOBE International).

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