in Indonesia

Indonesia: Good news and bad news on deforestation

First the good news: Indonesia’s rate of deforestation slowed in 2013. And the bad news: It’s likely to go back up unless the government does a U-turn on the country’s expanding palm oil production.

“Years of patience have finally paid off,” Agustin Teras Narang, Governor of Central Kalimantan, commented to World Resources Institute, about the reduced rate of deforestation in 2013. He added that,

“We could not have done this without the support from the government who established Indonesia’s first REDD+ pilot project in Central Kalimantan.”

In December 2010, then-President Susilo Bambang Yudhoyono announced that Central Kalimantan would be the REDD pilot project. Let’s take a look at what’s happened to Central Kalimantan’s forests since then.

The data behind the announcement that Indonesia’s deforestation rate has gone down comes from Global Forest Watch. In the image below from Global Forest Watch, the dark green represents intact primary forests, the light green is degraded forest, and the pink is “tree cover loss” or deforestation between 2011 and 2014:

Maybe you were expecting more deforestation? Well, let’s see what might be in store for Central Kalimantan’s forests. First, we’ll overlay the logging concessions:

Then the industrial tree plantations:


And then the palm oil concessions:

Indonesia’s moratorium on forestry concessions, part of the US$1 billion Indonesia-Norway REDD deal only applies to new concessions, and not to existing concessions. The moratorium expires on 13 May 2015, but Hadi Daryanto secretary-general of the Environment and Forestry Ministry recently told the Jakarta Post that the moratorium would be extended and improved, to include a review of existing concessions.

This is welcome news, and long overdue. But it remains to be seen whether such a review will actually hold the corporations that are responsible for the destruction of Indonesia’s forests to account.

Subsidised destruction

Meanwhile, Indonesia’s government provides generous subsidies for the industries producing commodities that destroy the country’s forests. Way more than it receives through REDD finance for preserving forests. A recent report by the UK-based think tank, Overseas Development Institute, looks into subsidies for commodities in Brazil and Indonesia and how these help drive deforestation.

In Indonesia, ODI looked at subsidies to the timber and palm oil sectors.

In 2012, exports of timber, pulp, paper and wood products from Indonesia were worth US$10 billion. ODI’s research found 10 subsidies from the Indonesian government that support timber production and consumption, totalling US$5.7 billion per year.

On top of all that there’s illegal logging. In 2010, Chatham House estimated that illegal logging represented about 40% of Indonesia’s total timber harvest.

In 2012, exports of palm oil from Indonesia were worth US$17.6 billion. Palm oil is Indonesia’s third biggest exported commodity, behind coal and petrol.

The Indonesian government has set a target to increase oil palm production by 60% by 2020. A 2013 report by the US Department of Agriculture estimated the total area of oil palm plantations at almost 11 million hectares. “Indonesia: palm oil expansion unaffected by forest moratorium”, is the title of the report. An area of 7 million hectares of oil palm concessions has been allocated in currently forested areas.

ODI’s research found 19 subsidies from the Indonesian government in support of palm oil production and consumption. The subsidies add up to a whopping US$16.6 billion per year.

Increase in biofuel subsidies planned

Indonesia has plans to increase domestic biofuel subsidies by more than three times. It is also considering a mandatory 15% biofuel blended into diesel fuel.

Zenzi Suhadi, a forest campaigner at the Indonesian Forum for the Environment (Walhi), describes the proposed subsidy as “a big blunder”. He told the Jakarta Globe:

“This is a wrong strategy taken by the government. Imposing the policy is like opening the gate to palm oil companies to besiege our forests, which have already been destroyed.
“The policy will stimulate palm oil companies’ expansion into Indonesian forests. This is something we don’t want to happen. Our remaining forests are at stake because of this plan.”

Rainforest Rescue has set up a petition against the proposed biofuels subsidy, which has so far received more than 140,000 signatures:


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