Indonesia chooses climate pact pilot province

JAKARTA/SINGAPORE Thu Dec 30, 2010 8:29am EST

Land owned by Indonesian palm oil giant PT SMART Tbk is cleared in Ketapang in Indonesia's West Kalimantan province on August 2, 2010. REUTERS/Tommy Ardiansyah

Land owned by Indonesian palm oil giant PT SMART Tbk is cleared in Ketapang in Indonesia's West Kalimantan province on August 2, 2010.

Credit: Reuters/Tommy Ardiansyah

JAKARTA/SINGAPORE (Reuters) - Indonesia has chosen once of its largest and richest provinces to test efforts to reduce greenhouse gas emissions by saving forest and peatlands, a key part of a $1 billion climate deal with Norway.

Central Kalimantan province on Borneo island is the second largest producer of greenhouse gases among Indonesia's 33 provinces because of deforestation, destruction of carbon-rich peat swamps, and land use change, the government says.

"The assessment showed that Central Kalimantan is a province with large forest cover and peatland and faces a real threat of deforestation," top technocrat Kuntoro Mangkusubroto, head of a special presidential delivery unit charged with managing the Norway deal, said in a statement on Thursday.

The agreement aims to test efforts that save and restore forests as a way to fight climate change. Forests soak up and lock away large amounts of carbon, while clearing and burning them releases carbon dioxide (CO2), the main greenhouse gas.

Under the climate deal signed this year, Norway will pay Indonesia for proven emissions reductions based on a transparent auditing system and a key part of the pact is selecting a province to test programmes that boost conservation, training and steps to improve livelihoods.

Overhauling the province's land-use plan is also key. The deal imposes a two-year national moratorium on new concessions to clear primary forests and peatlands, a step some palm oil and pulp and paper firms fear could disrupt expansion plans.

Central Kalimantan, with nearly a million hectares of oil palm plantations and a rapidly growing coal-mining sector, has some of the largest areas of threatened peatlands and peat swamp forests in the country.

READYING FOR REDD

The deal with Norway also seeks to ramp up a U.N.-backed scheme called reducing emissions from deforestation and degradation (REDD) that aims to reward poor countries for saving their forests.

Internationally tradable carbon offsets would be generated by forest preservation projects based on national or regional emissions reductions. Rich countries would buy the credits in a future market that could be worth billions of dollars a year, the United Nations says.

A U.N. climate conference in Mexico this month backed REDD, which has already attracted about $4 billion in pledges from rich nations, including Norway and the United States.

"It is a tough job, but I am sure with good coordination with the central government we can do this," Teras Narang, the Central Kalimantan governor, told Reuters by telephone.

Indonesia already has nearly 40 REDD projects at various stages of development, the government says, with two projects totaling more than 300,000 hectares (750,000 acres) of peat swamp forest in Central Kalimantan.

The Australian government is also helping restore 100,000 ha (250,000 acres) of degraded peat land and forest in the province.

Under the deal, the province, which has an area more than twice that of Ireland, and another to be chosen in 2012, would benefit from some of the $120 million under the second phase of the deal.

The bulk of the money would be available in the third phase from 2014, when Norway will pay for measured greenhouse gas cuts based on its 2013 emissions reductions.

"This is a great opportunity," said Dharsono Hartono, developer of a large REDD project in Central Kalimantan.

"With this selection, the province can finalize its spatial plan, implement its green growth policy and drive bureaucratic reform that can boost jobs and environmental protection," he told Reuters in Jakarta. (Editing by Robert Birsel)

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