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Forest Carbon Portal
It's Not Easy Being Green in Aceh, Indonesia
Country Name: Indonesia
Author: John-O Niles

John-O Niles of Carbon Conservation Pty. Ltd writes about the challenges of utilizing carbon finance to protect Indonesian forests.



Kermit-The-Frog's woes don't hold a candle to those of Irwandi Yusuf, current Governor of Indonesia's Aceh Province seeking to safeguard the largest remaining block of Sumatran forests. The province, which was devastated by the 2004 Indian Ocean tsunami, while striving to rebuild itself is suffering from rampant deforestation. By one estimate, the province has been losing about 49 acres of forest a day, mostly due to illegal logging, resulting in increased flooding, landslides, and biodiversity loss.1

On April 26, 2007, Governor Irwandi declared a six-month logging moratorium for Aceh. This bold move was intended to show his electorate and the international community that the Governor was serious about stopping deforestation. Governor Irwandi has personally led police raids on illegal logging camps and several unauthorized loggers are now in jail. That temporary logging moratorium expires at the end of this week—and unless some form of carbon finance soon emerges, the chainsaws could soon, again, be humming.

Realizing the need to provide financial incentives for forest conservation, Governor Irwandi has assembled a team to help Aceh Province explore the possibilities of carbon finance to justify and finance a green Aceh future. One would think that the international conservation community would be doing back flips to help conserve highly-threatened, mega-diversity forests. However, the Governor, who plans to transform Aceh into a province of responsible forest management, has struggled to find partners who share his sense of urgency.

Before delving into the details, let's start at the beginning. Born in Bireun Aceh in 1960, Irwandi always had a conservation ethic growing up. He turned his passion for wildlife into an academic career, picking up veterinary degrees from Syiah Kuala University in Aceh and Oregon State. He would go on to help Fauna and Flora International (FFI) establish an office in Aceh in the late 1990s, using his veterinary training on conservation work with the Sumatran elephant.

Aceh's quest for independence was also a driving force in Irwandi's life. In the early 1990s, he received military training in Latin America and grew to be one of Free Aceh Movement (GAM)'s top commanders. He held positions in psych warfare and counter-intelligence. Due to his revolutionary activities, he was arrested in 2003 and held as a war prisoner in the Keudah Prison in Banda Aceh until 2004 when the devastating 2004 Tsunami hit Aceh's shores. Many prisoners in Keudah Prison perished in the waters. Irwandi punched a hole in the ceiling and narrowly escaped. He then fled.

When the unbelievable human loss of the tsunami was realized, negotiations were hastened for a truce between the Government of Indonesia and GAM. An amnesty was declared for former fighters and Irwandi helped broker negotiations for Aceh's August 2005 autonomy deal. And at the end of 2006, Irwandi was chosen by the people of Aceh as a freely-elected governor.

Less than five months after taking office, in April 2007 Governor Irwandi held a critical press conference in Bali with two other "green" governors. They were eager to prevent rampant deforestation in their provinces and announced measures to immediately stem deforestation, ranging from a logging moratorium in Aceh to a review of logging permits in Papua. (Papua Governor's Barnabas Suebu recently won one of Time Magazine's Heroes of the Environment Award for his work).

In Bali Governor Irwandi also signed a Memorandum of Understanding with Carbon Conservation Pty. Ltd. The Governor asked our company and Fauna and Flora International to help Aceh tap the emerging interest in carbon finance for reducing emissions from deforestation in developing countries (REDD). We focused our efforts on highly-threatened unprotected forests comprising the Ulu Masen Ecosystem (see map). About 60% of Ulu Masen forests were zoned to be logged. Three concessions for 161,000 hectares have already been granted. The permits had been issued in earlier years, with the federal government largely controlling the process.
Map showing forest cover in Aceh Province
With the goal of obtaining carbon finance for conservation, we calculated baseline rates of deforestation for Ulu Masen based on satellite images and a review of published and unpublished literature. We estimated carbon stocks using four independent global carbon models and using the Intergovernment Panel on Climate Change's default values. We developed a tiered-monitoring system for tracking logging in real time with ultra-light planes (currently sitting at customs in Singapore—but that's another story), satellite images and ground inspections. We developed plans for a field-based carbon inventory in 2008. We developed robust risk management systems to help mitigate and manage leakage and permanence concerns. We classified Ulu Masen forests into 87 categories based on elevation, degree of disturbance, legal status and nearness to roads. We assigned conservative carbon stock estimates for all 750,000 hectares in the Ulu Masen Ecosystem.

Aceh Government, Fauna and Flora International and Carbon Conservation then jointly developed proposals for new regulations and zoning laws to slow down legal deforestation. We developed proposals for alternative green livelihoods, increased illegal logging patrols to make use of the data from the ultra-light planes. We proposed a new fund to support limited community-based sustainable logging, in consultation with stakeholders through northern Aceh.

We estimated how much these measures could reduce deforestation below our deforestation projections for Ulu Masen of around 9,000 hectares per year and found that with adequate carbon finance over the next 30 years 250,000 hectares of deforestation could be prevented. Assuming a conservative average forest carbon stock of 188 tonnes of carbon per hectare. This equates to just over 100 million tonnes of projected CO2 emission reductions over 30 years. In the period up until the end of 2012, when the successor to the Kyoto Protocol will presumably be in place with some REDD component, the Governor's plans would avoid 16 million tonnes of CO2 emissions.

Ready to supply REDD based carbon offsets, the next step was finding a source of finance, buyers. Aceh, with its post-Tsunami needs and ubiquitous poverty can't just turn off the logging machine. To succeed over time with community support, Aceh must turn on some forest-conserving economic engine. The ability to stop deforestation in Aceh is predicated on this poster-story for REDD actually accessing the emerging carbon market.

What our team found is peculiar, but I don't think unique to similar efforts around the world. Lots of people are talking about saving tropical forest as a way to fight climate change. They believe Governor Irwandi and his team are trying to do exemplary conservation. But no one is quite ready to invest. We pitched private investors and a venture capitalist. We got meetings with top people from E-Bay and Starbucks to name a few. JP Morgan, and other banks and other banks listened with great interest. And the response was the same: there needs to be more certainty, even for voluntary emission reductions. Everyone is waiting for something else to happen. Some want to know the rules for REDD in the Kyoto Protocol and UNFCCC process. Others are waiting for the Voluntary Carbon Standard (VCS) to publish it's REDD rules. Still others are waiting for the Chicago Climate Exchange to finalize its rules for avoided deforestation. Everyone is watching the emerging domestic US climate change legislation and rule-making in California.

Collectively, even the two big REDD initiatives—the World Bank's Forest Carbon Partnership Facility (FCPF) and Australia's Global Initiative on Forests and Climate—have only announced one deal thus far. Australia announced a $100 million deal with the Government of Indonesia and BHP Billiton in Kalimantan. The FCPF is still in early stages of development. They are making all the right sounds, but it seems Governor Irwandi is trying to move too fast to save forests.

So while the REDD topic has moved remarkably far and fast (thanks to the Coalition for Rainforest Nation's dogged diplomacy) and despite several new initiatives for saving forests to fight climate change, and despite a robust and growing voluntary market for carbon credits, our company has not been able to "show the Governor and the people of Aceh the money".

We're not giving up. Next month the project proponents will invite a qualified auditor of the Climate, Community and Biodiversity Standards to assess our project design and see how we measure up to this global auditing tool for multiple-benefit projects. We're continuing to pitch the Governor's vision to anyone who will listen. And I think we will succeed. I can't imagine explaining to the Governor he is moving too fast. The carbon markets aren't quite mature enough. Investors are waiting for more rules and guidelines.

Governor Irwandi knows adversity. And still, he is upbeat, funny and determined. The people and wildlife Aceh's forests support are too important. Several new studies show Indonesia's orangutans are facing increased pressure. Other studies point to the vulnerability of Indonesia to climate change itself. The Ulu Masen Ecosystem has managed to escape massive deforestation thus far, largely due to internal conflict and a devastating disaster. Loggers have wiped out a lot of Sumatra's forests already. They are now turning their attention to a region in need of reconstruction timber (250,000 homes were destroyed by the Tsunami). The peace process has let Aceh begin to recover and opened the door to extractive industries, looking for the next cheap cut. Will the global community step up and do something? Will the Governor's legacy be one of unrivaled green courage and heroism, or a stunning defeat while the world debated the rules for actually using carbon finance for its highest goal—helping developing country implement scaleable sustainable development while mitigating climate change? Stay tuned—the next few months are critical. I believe the Governor will, like he has done so many times, take adversity and bend it into an instrument of positive change.


1 http://www.worldwatch.org/node/5179


John-O Niles is the Chief Science & Policy Officer with Carbon Conservation. He can be reached at johno@carbonconservation.com.

First published: October 25, 2007

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