Forest stewardship: Sticks or carrots?

By: Ahmad Maryudi
Published by: The Jakarta Post, 9 July 2008

According to a recently unveiled assessment by independent bodies, approximately two-thirds of concessionaires in Papua are poorly managing the region's forests. This heightens the widespread perception of failure on the part of Indonesia's forest management services. Even as some forests have been exploited at a far greater rate than they can regenerate, many of the forests that remain face further pressure from logging.

One therefore has to wonder about the effectiveness of existing forest stewardship programs, of both the regulatory and market-based variety. With respect to the former, Indonesia's government has promulgated various laws and regulations, supposedly to ensure the wise use of forest resources. The government has also prescribed standards and guidelines for use in managing forests as well as sanctions and penalties for noncompliance.

Unfortunately, such a regulatory approach requires both resources and enforcement capacity, both of which are argued to be clearly lacking in this country.

Various policies introduced have been under heavy criticism, the strongest claim being that the governmental regulatory approach remains a "paper tiger".

As a result, a market-based approach involving forest certification -- often nicknamed "green labeling" -- has gained global momentum with its promise of market incentives for price premiums. The idea is that as global awareness around forest loss and degradation grows, contemporary society -- principally wood product consumers -- will begin to buy products only from (certified) sustainably managed forests. More importantly, green labeling assumes that consumers will eventually accede to paying premium prices for their wood products.

Unfortunately, certification has not yet gained a strong foothold, even in regions where green markets are thought to have been developed, such as Europe. As a result, it has yet to contribute significantly to forest stewardship, for the following reasons.

First, although studies of consumers' perceptions consistently reveal that wood consumers are very conscious of the environmental issues associated with such products, they would nevertheless refuse to pay higher prices for products from certified forests. A price attribute is clearly more attractive to consumers than an environmental attribute.

It is difficult to provide quantitative data on certified wood consumption as a proportion of total global wood consumption. Nonetheless, according to a report by the UN Economic Commission for Europe and the UN Food and Agricultural Organization, in 2007 the estimated industrial roundwood from certified forests accounted for only 25 percent of the total global wood production of nearly 400 million cubic meters. The report also stated that growth rates in certified forest areas are declining.

Second, even if certification gained strong support from consumers by providing real incentives for paying premium prices, it is unlikely Indonesian forest companies will adopt the program. Only a few have been certified, with the majority remaining uninterested in the program.

To date, only three out of the more than 300 companies that manage Indonesia's national forests have done so. And these certified companies only cover an area of less than 1 million hectares of forest, compared to the more than 50 million hectares set aside for production.

Even though the government has offered forest companies a softer annual work plan policy, which allows certified companies to independently determine their annual allowable cut, it has so far failed to attract much interest.

Experience has taught us that most forestry companies are unlikely to remain in the forestry business for very long. Some analysts even describe them as "one-cycle" companies: They "mine" the timber and then switch their business. Thus, even if such companies refrain from certification, little impact would be felt across the industry -- unless mechanisms existed to punish their subsequent business activities for failure to meet certification standards.

The market-based certification approach is therefore unlikely to do more than promote the wise use of Indonesia's forests. Contrary to the claims made by some environmental activists, the regulatory approach, involving government intervention, therefore remains an important alternative.

However, if governmental regulations are truly to contribute to forest stewardship, preconditions should be set. A strong dedication to "forest welfare" (the greatest benefit going to the forests) remains an important ingredient of solid governmental policy.

Experiance has also shown that many of Indonesia's forest regulations favor big business. Moreover, very few policies have been introduced out of genuine concern for forest welfare, favoring instead rather different political, economic and social goals, such as economic development.

For instance, to attract forest investments and thus boost economic goals, a number of policies have been introduced, such as subsidies for forest processing services.

Unfortunately, these and other policies have created market distortions that have led to increased pressure on forest resources.

In addition, forest royalties and levies in Indonesia are set very low, so that forest companies can capture "superprofits". This clearly encourages rapid deforestation.

Furthermore, the royalty and levies system does not provide incentives to reforest logged areas. Instead, by paying royalties, companies can shift responsibility for reforestation onto the government. Yet, forestry companies should bear the responsibility of leaving forests in the same condition in which they were originally leased.

To sum up: Given increased promotion of market-based approaches to certification, it is clear that a strong forest-dedicated regulatory approach is needed -- if anyone is still interested in seeing the limited remaining "majesty" of Indonesia's forests.

The writer is a lecturer at Gadjah Mada University in Yogyakarta and a PhD candidate at Goettingen University, Germany. He can be reached at amaryud@gwdg.de

Seeking fair climate change regime

By: Ahmad Maryudi
Published by: The Jakarta Post, 16 July 2008

The recent G8 joint communique on climate change, through which G8 nations have agreed to halve global greenhouse emissions by 2050, has raised questions over the future of global efforts to fight climate change and its impact on the environment and humanity.

The G8 leaders claim the agreement is an "important and significant step forward in the efforts" to tackle global warming. Some environmental groups sharply criticize the communique as it falls short of expectations by failing to set medium term targets.

The world's economic powers, particularly the United States, responded, claiming the intergovernmental negotiations represented progress though they lacked commitments from other dominant emitters, particularly the emerging economic powers, China and India.

But the G8 countries rejected the notion they slash their emissions even further because the wealthier countries have been responsible for the bulk of the historical emissions which have led to today's environmental damage.

They said their emission rate per capita is far below average among developed nations and they wanted to uphold the principle of economic development for their people.

Current rifts over the best possible approach to addressing global warming have widened even farther, and new political standoffs between developed and developing nations are likely. Intergovernmental negotiations, which had converged due to the ratifications of the Kyoto Protocol by some important nations, most notably Russia and Australia, appear to diverge once more.

The principle of "common but differentiated responsibilities" between developed and developing countries will probably not continue to hold sway. According to this principle, these two groups -- due to their different shares of historical and current global emissions, emissions per capita and stages of development -- are subject to mandates with different commitments.

The wealthier, dubbed Annex I, nations, are required to reduce their collective emissions by 5 percent compared with their 1990 emissions, while the others are not obliged to meet such quantitative commitments. Even without them, developing countries share in the common responsibility to slash emissions; at least they must establish an integrated inventory system to track their emissions.

Climate change negotiations might develop into one of the two following regimes. The first one, the least common denominator regime, follows the "business as usual" scenario: the United States would continue to oppose any agreement which only puts reduced emissions targets on developed nations, notwithstanding the global call for across-the-board cuts from such developed counterparts as Germany and France. This scenario recognizes the rights of developing world to develop themselves, which suggests that they might disregard their emission levels in the development phase.

Under this "least common denominator" climate change regime, no parties are willing to sacrifice any of their interests. Under this regime, current emission patterns would be unlikely to change much, posing real problems, as the scientific community points out the unprecedented impact of the increase in global temperatures by 2 degrees Celsius by 2050.

On the other hand, a "partially leveled playing field" climate regime might emerge. If we consider the common understanding on the magnitude of the problems associated with climate change, the different historical and current emissions patterns as well as the development status of different nations, intergovernmental negotiations might well continue to pursue a just solution for both groups, namely, that the cost of halting global warming would be fairly shared among nations.

Under this regime, developed nations would be required to meet quantitative emission reductions in the near future, not by 2050 as promised in the new G8 communique.

Developing nations would be allowed to continue promoting their economic development, but only over a limited period, say 20 years. During that period, their emissions will be expected to peak before starting to decline, eventually helping to stabilize global temperatures at a level that would not lead to unimaginable adverse impacts.

This regime might provide win-win solutions for both groups, developed and developing countries, as well as for the welfare of people and the environment.

The writer is a lecturer at Gadjah Mada University and a PhD candidate at Goettingen University, Germany. The article is a personal opinion. He can be reached at amaryud@gwdg.de

Environmental commitment: A changing carbon policy?

By: Ahmad Maryudi
Published by: The Jakarta Post, 30 June 2008

On his first official visit to Indonesia, Australian Prime Minister Kevin Rudd has agreed with President Susilo Bambang Yudhoyono to sign a joint Forest Carbon Partnership, supposedly to deal with climate change and its unprecedented consequences.

The agreement was the culmination of intensive discussions consilidated in the 2007 Climate Change Conference in Bali.

This agreement is interesting for the following reasons: First, international negotiations on climate change had been stagnant due to Australia's refusal to ratify the Kyoto Protocol.

Second, this is the first time environmental issues, specifically climate change issues, have become the main agenda in bilateral negotiations between the two countries.

It is also worth noting that the 2007 conference was the first international conference attended by Rudd, while the Kyoto Protocol was the first international document he signed after coming into power.

One would therefore question whether Down Under has shifted its policy on climate change, and the likely corollaries of the bilateral agreement on Indonesia.

Australia has strong interests in being more engaged in climate change negotiations for several reasons. First, much of its prosperous economy proves very polluting, as it is based on the use of fossil fuel, most notably black coal. Around 85 percent of the domestic electricity is generated from this dirty energy source.

In addition, black coal remains Australia's largest export commodity, accounting for nearly 20 percent of total exports -- more than 200 million tons worth around US$20 billion. The exports are expected to rise due to the likely increasing demands, mainly from Asia, not to mention that global oil prices are soaring in recent months.

As such, Australia's per capita emissions of greenhouse gasses, especially carbon, are quite high. In 2003, it was reported that its per capita emissions accounted for 0.8 kg CO2 per dollar of GDP, nearly 200 percent of the average carbon emissions of OECD countries.

It can therefore be understood the reluctance of Kevin Rudd's predecessor to ratify the Kyoto Protocol. It is true that, unlike the Annex A (developed) countries which are obliged to cut their emissions from the 1990 base-year, Australia is only given a "soft" emissions target of 108 percent of its 1990 emission.

Even so, the country has a lot of work to do to meet the 108 percent target, as it is reported that its current emissions remain 25 percent above 1990 emissions. This potentially damages their economy.

Before coming into power, Kevin Rudd commissioned Prof. Garnaut to consider the possible implications of cutting Australia's emissions on the national economy. According to Garnaut, the country's trade is highly sensitive to economic performance in Asian developing countries that are vulnerable to climate change.

Garnaut suggested that while exploring more economically sound mitigation strategies, Australia needed to actively cooperate with neighboring countries to tackle the "common problems".

It becomes apparent that Australia's economic interests are well placed in the forest carbon partnership with Indonesia. The Emissions Reduction from Deforestation and Degradation (REDD) plan is clearly seen as a more cost-efficient mitigation option than dealing with unprecedented economic consequences by reducing the emissions from the uses of fossil fuels.

In the REDD scheme, Indonesia has great potential to be an ideal partner and save Australia's lucrative coal industry and therefore overall economy.

First, the country's emissions from deforestation and degradation are substantial. In Kyoto Protocol and Bali schemes, Indonesia, as a developing country, is not given quantitative emissions reduction targets.

Therefore, "avoided emission" from deforestation and degradation would be an asset which could be sold in the international carbon markets, particularly to developed nations obliged to cut their emissions.

Apparently, Indonesia is much interested in possible compensation on the "avoided emissions". Over the next 10 years, the carbon prices are expected to substantially rise, particularly due to the ambitious emissions reduction targets of European nations up to 20 percent off the 1990 emissions. Some analysts predict that the current carbon price of about $5/ton could rise to $100/ton.

Nonetheless, it will not be such an easy doing for Indonesia. First, Australia and the other Annex-A countries would likely require the carbon seller countries to provide scientific-quantitative evidence for the transactions. This might not be an easy task to deal with as the country is apparently lacking.

Once Indonesia and other seller fellows are able to do so, the compensation could be gone, as it quite difficult to predict the long-term future of this highly political issue.

It is not impossible that over time, considering the magnitude of the problems, developing countries would also be burdened with some commitments to reduce their emissions.

There is sufficient evidence for this. Australia's reluctance to ratify the Kyoto Protocol was partly due to some arguments that China also contributes a large portion of the total global emissions. It is likely that this argument would be continuously advocated by developed nations.

If this were the case, Indonesia would then face serious problems. It is not economic gains that would be enjoyed; instead we will suffer from serious consequences which could be economically damaging. And the developed nations would be ready for the hardly battled victory. From the past emissions, they have enjoyed all of the sweets, and the negative consequences would be borne by all, no exception.

The writer is a lecturer at the University of Gadjah Mada and a PhD Candidate at Goettingen University, Germany.

Your climate change, not ours

By: Ahmad Maryudi

Published by: The Jakarta Post, 3 June 2008

Climate change is a very real phenomenon and the evidence for it abounds: global surface temperatures have risen, current temperatures are the highest in recorded history, amounts of global snowfall and permanent ice have declined over the years and global sea levels continue to rise.

Following last year's climate change conference in Bali, much of the main policy discourse on climate change has been focused on the importance of forests in mitigating climate change, particularly through the Reducing Emission from Deforestation and Degradation (REDD) scheme.

Deforestation releases greenhouse gases (GHGs), of which CO2 is the main culprit, and reduces the forests' capacity to absorb GHGs. The REDD plan sells itself as a mitigator of climate change through two modes: by reducing emissions and by enhancing the forests' capacity to absorb carbon. The potential for GHG reduction through REDD, along with other mitigation techniques, is considered very high.

However, emissions from global deforestation contribute only 20 percent of human-generated GHG emissions. Most GHG emissions come from the use of fossil fuels in transportation, industry, domestic and commercial applications and so on.

Therefore, assuming current patterns on the use of fossil fuels stay the same, carbon emissions into the atmosphere will remain high -- in short, the roles of forests as carbon sinks are much less significant than previously touted.

To a certain extent, forests do absorb carbon from the atmosphere, but if the CO2 concentration continues to increase (because of the burning of fossil fuels), then forests will become more vulnerable and risk being an additional factor in increased concentrations of greenhouse gases in the atmosphere.

Campaigns have cropped up in both developing and developed countries that attempt to sell the forest solution as a viable offset to the use of fossil fuels. Mass media quote "government officials" as saying forest-related GHG reduction schemes are "the most cost-effective".

What this means in effect is the economy is always the top priority, and developed countries will not put their economies at risk to deal with climate change.

Reducing the uses of fossil fuel in industry will have a pass-on effect to the economy, especially since "cleaner" sources of energy, although in existence for many years, are not yet cheap enough to be an economically viable replacement for the much cheaper fossil fuels.

It is obvious much work still needs to be done to make renewable energy more accessible and less ethereal. This means that to a large extent the global society will still find the conventional-polluting technologies.

Industrialized nations are reluctant to sacrifice their fossil fuel-based economy, and thus contribute the lion's share of global CO2 emissions -- yet they have the temerity to blame developing nations for damaging their forests.

The United States alone contributes more than 20 percent of global CO2 emissions even though it accounts for less than 5 percent of the world's population. So it should come as no surprise the U.S. still refuses to ratify the Kyoto Protocol.

It is very clear forest-related CO2 reduction schemes are not the answer for climate change in the long term. REDD and other similar schemes should be seen as a transitional phase toward a low carbon economy. The main challenge is therefore how to reduce emissions from fossil fuel use.

This needs commitment from developed nations, the main global CO2 emitters. If they are still reluctant to do so, as many apparently are, climate change and its profound consequences will be felt even harder.

The writer is a lecturer in Gajah Mada University's Forest Management Department, and is a PhD candidate at the Institute of Forest and Nature Conservation Policy at Georg-August-Universitdt, G*ttingen, Germany. He can be reached at maryudi76@yahoo.com