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50<br />

The Heart of Borneo<br />

$28.5<br />

MILLIon<br />

InvestMent to<br />

heLP PRoteCt<br />

tRoPICAL<br />

FoRests In<br />

thRee DIstRICts<br />

atmosphere. This provides additional incentives for <strong>the</strong> protection<br />

and management of forests. In <strong>the</strong> Heart of Borneo, with its large<br />

and important forest resources and carbon stocks, REDD+ financing<br />

offers an immediate investment opportunity that addresses forest<br />

conservation as well as climate change mitigation (ADB 2010).<br />

Currently, <strong>the</strong>re are several initiatives underway that support REDD+<br />

investments targeting <strong>the</strong> Heart of Borneo, including new programs<br />

funded by <strong>the</strong> <strong>Global</strong> Environment Facility (GEF), ADB, <strong>the</strong> United<br />

Nations Development Programme (UNDP), <strong>the</strong> Norway–Indonesia<br />

REDD+ Partnership, <strong>the</strong> Kalimantan Green Corridor project with<br />

support from several United Nations agencies, and <strong>the</strong> Forest<br />

Investment Program in Indonesia.<br />

In September 2011, Indonesia and <strong>the</strong> United States signed an historic<br />

debt-for-nature swap agreement that will result in a new $28.5 million<br />

investment to help protect tropical forests, cut greenhouse gas emissions<br />

caused by deforestation, and support biodiversity conservation in three<br />

districts of Kalimantan in Indonesia. This debt-for-nature-swap—<strong>the</strong><br />

first of its kind with a REDD+ focus—allows Indonesia to reduce some<br />

of its debt in exchange for its support for investment-financed activities<br />

aimed at conserving its tropical forests and biodiversity (WWF 2011b).<br />

The agreement will also bolster economic growth and benefit local<br />

communities while investing in various measures that reduce forest<br />

destruction, such as better land-use planning, improved productivity of<br />

degraded lands, and more effective management of protected areas.<br />

Ano<strong>the</strong>r approach that looks promising is <strong>the</strong> use of watershed service<br />

payments to maintain <strong>the</strong> forests and watersheds in <strong>the</strong> Heart of<br />

Borneo. Forested watersheds provide numerous benefits, such as water<br />

purification, flood control and fresh drinking water. Under <strong>the</strong> scheme,<br />

payments are made to owners or managers of forested lands that<br />

provide water-related ecosystem services -including traditional owners<br />

and indigenous peoples- to encourage <strong>the</strong>m to better manage and<br />

conserve those forests. Often, beneficiaries downstream make payments<br />

to <strong>the</strong> upstream forest owners or managers (Hanson, Talberth, and<br />

Yonavjak 2011).<br />

An ongoing WWF/CARE/International Institute for Environment<br />

and Development (IIED) initiative in <strong>the</strong> Kapuas Hulu district (West<br />

Kalimantan, Indonesia), uses such an incentive scheme to improve<br />

watershed management, as it assists villages to better plan and carry<br />

out development programs. Potential buyers of <strong>the</strong> watershed-related<br />

services include <strong>the</strong> Public Water Service, o<strong>the</strong>r districts along <strong>the</strong><br />

Kapuas River, <strong>the</strong> provincial government, and industry, while <strong>the</strong> sellers

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