East Kalimantan Environmentally Sustainable Development Strategy

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104 in development plans. In addition, there is potential to partner with insurance companies to help conduct these analyses as well as provide financial risk-sharing mechanisms. 6. Implementation and enablers Achieving successful environmentally sustainable economic growth will require new kinds of behavior and capabilities within government and the broader society of East Kalimantan. From an institutional standpoint, some of the challenges are organizational, as supporting environmentally sustainable growth requires coordination across the various government departments that will be critical to its success (e.g., planning (Bappeda), forestry, environment, agriculture, tourism, education, public works). Another challenge will be to build the capabilities within government to carry out this ambitious and urgent program, and to manage the stresses it creates. As with governments in other developing regions, the provincial administration of East Kalimantan is doubly challenged by critical priorities and constrained resources.. Strong leadership will be required to overcome the organizational challenge, build capabilities and change mindsets towards development across the province. While individual institutional enablers are explored in each sector strategy, five cross-cutting enablers have been identified: • Governance and climate change institutions • Spatial planning and policy • Monitoring, reporting, and verification (MRV) and carbon accounting • Community engagement • Financing GOVERNANCE AND CLIMATE CHANGE INSTITUTIONS Governance over natural resources is one of the greatest challenges facing any government. Resource governance can rarely be improved in isolation, but must be part of a larger program of governance reform, such as Indonesia has been implementing over the past decade. Beginning with the Regional Autonomy Law of 1999, decentralization has brought substantial changes. Efforts to improve law enforcement and combat corruption, generally and within natural resource sectors, have yielded important results, and perhaps most importantly, a sense of momentum and optimism. DRAFT But governance of natural resources in Indonesia is still complex, and often contested. While much authority over the areas outside the forest estate (Kawasan Hutan) has been given to local district governments, roles have been undermined by conflicting regulations from central government ministries and frequently-altered procedures. The provincial government certainly recognizes that much progress is needed to better incorporate stakeholder input, particularly from communities. Capacity to collect such feedback is limited, and mindset changes and institutional improvements may be needed to insure that such feedback is effectively incorporated in planning and decision making processes at all levels. Roles of companies and their relationships with rural communities remain unclear. Large areas of the forest estate lack a strong government presence, and are very hard to police and monitor. East Kalimantan’s governance of climate change has developed organically as the threat has become clearer and more prominent. This is quite a common pattern, as any governments respond to new challenges by first empowering existing institutions to take on larger tasks before establishing new institutions. As the threat from climate change has grown in priority, East Kalimantan has established a number of institutions to provide capacity for specific threats. East Kalimantan has likewise created several new institutions to coordinate its response to climate
105 change issues. In December 2009 after participating in COP 15, 24 the Governor of East Kalimantan created the Kaltim Green taskforce. Then in May 2010 he issued a decree establishing a new Kaltim REDD taskforce to coordinate REDD and peatland rehabilitation efforts in the province. These institutions provide an excellent basis to coordinate the broader environmentally sustainable growth activities in the province. Both institutions report directly to the Governor and have a mandate to coordinate efforts at the provincial and district levels. Again, it is a relatively common pattern for a number of groups to be established to look after various aspects of an urgent and highly complex cross-cutting issue. Many existing institutions have overlapping responsibilities, and no one single agency has a complete overview. At a certain point, it may become necessary to establish an umbrella organization that both can have oversight and steers the activities of different taskforces. Many governments facing the urgent and complex challenges have resorted to a coordination structure that focuses on ensuring delivery of critical priorities across a complex policy landscape. There is one strong example in the Indonesian experience. In Aceh, following the devastating tsunami in late 2004, the Indonesian Government established the Agency for the Rehabilitation and Reconstruction of Aceh and Nias (BRR) to coordinate and oversee the multi-year reconstruction process. As with moving to an sustainable economic development, recovery and reconstruction in Aceh required a new order of community outreach, a high order of coordination across many levels of government, responsible disbursement of external funding, and mobilization of technical and financial resources from across (and outside) the country. Box 9 discusses five lessons from BRR. A review of the BRR and other domestic and international delivery units reveals some lessons that East Kalimantan will keep in view while developing its own institutional mechanisms for ensuring the successful implementation of a environmentally sustainable growth strategy (Box 9). International and Domestic Lessons on Organizing a Delivery Unit for Complex and Urgent Development Challenges 1. 2. 3. Delivery unit must have a direct relationship with and a clear mandate from the highest levels of government (e.g., Aceh’s BRR, Morocco Economic Development Board, Guyana Presidential Delivery Unit) DRAFT Delivery unit needs to include representatives from different levels of government and nongovernmental organizations (e.g., Brazil’s Amazon Fund, Indonesia’s Waclimad) Relationships and decision-making rights must be clearly defined between the new delivery unit, existing ministries, and other stakeholders (e.g., Bahrain’s Economic Development Board) 4. Employee compensation and value proposition must be competitive with the commercial sector to attract top talent (e.g., Aceh’s BRR, Guyana Presidential Delivery Unit) 5. Delivery unit works best if it can develop rigorous performance management around a few priority outcomes (e.g., Bahrain Economic Development Board) Box 9 The two case studies of ongoing projects in East Kalimantan that follow illustrate some of the organizational innovations useful for the new Climate Change Agency. The Berau Forest Carbon Program is a comprehensively designed potential REDD demonstration program at the district level and thus has lessons for how to organize a province-wide program. The Heart of Borneo is a cross-district (as well as cross-national) program that is focusing on conservation and sustainable development and has lessons on how to work across levels of government. 24 UNFCCC Conference of Parties in Copenhagen, December 2009
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East Kalimantan Environmentally Sus
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3 East Kalimantan Environmentally S
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5 Contents Preface 7 Acknowledgemen
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7 Preface A broad global consensus
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9 Acknowledgements The DNPI and the
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11 Executive summary East Kalimanta
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13 1. The development of coal-bed m
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DRAFT 15
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17 Kaltim Green Program The Governm
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19 1. The context for East Kalimant
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21 This resource development pathwa
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23 Both Berau and Malinau are large
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25 In the BAU scenario, CO 2 e emis
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27 TOP 5 ABATEMENT INITIATIVES Top
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29 Kalimantan’s shift to a climat
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31 The sector’s 57 MtCO2e of net
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33 Outside of the sector’s need f
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35 The greatest expansion is expect
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37 improving water management in on
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39 Including financial transfers fo
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41 after the identified abatement m
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43 The Case of Oil Palm Permits and
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45 Emissions from the forestry sect
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47 across Kalimantan in 1997 and 19
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49 Utilizing concession buyout sche
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51 Pilot Projects Pilot projects ha
Page 53 and 54: 53 GDP Potential The economic decli
Page 55 and 56: 55 Downstream manufacturing would i
Page 57 and 58: 57 downstream manufacturing as it w
Page 59 and 60: 59 Swidden agricultural practiced b
Page 61 and 62: 61 Although East Kalimantan has far
Page 63 and 64: 63 Reaching average national yields
Page 65 and 66: 65 farmers . We have identified sev
Page 67 and 68: 67 Many mining operations are locat
Page 69 and 70: 69 Unlike timber or oil palm planta
Page 71 and 72: 71 exploration and production conce
Page 73 and 74: 73 The Economic Opportunity of Post
Page 75 and 76: 75 Entering downstream value chain
Page 77 and 78: 77 Current Context The oil and gas
Page 79 and 80: 79 granted in 2008-2009 and contain
Page 81 and 82: 81 Emission from flaring is declini
Page 83 and 84: 83 Satellite images can help monito
Page 85 and 86: 85 Under business as usual, relativ
Page 87 and 88: 87 BERAU Berau is the third largest
Page 89 and 90: 89 350,000 ha of Kutai Timur is cat
Page 91 and 92: 91 substantial natural resource ext
Page 93 and 94: 93 Borneo conservation area as well
Page 95 and 96: 95 agricultural processing. As Pena
Page 97 and 98: 97 Range of climate related risks t
Page 99 and 100: 99 predict increased precipitation
Page 101 and 102: 101 In addition to the refinery and
Page 103: 103 The greatest economic risks fro
Page 107 and 108: 107 Proposed BFCP governance and ma
Page 109 and 110: 109 the lack of a strong system, th
Page 111 and 112: 111 Carbon Accounting, Standards, a
Page 113 and 114: 113 EXAMPLE INITIATIVES REQUIRING C
Page 115 and 116: 115 for example, includes represent
Page 117 and 118: DRAFT 117
Page 119 and 120: 119 Sources • 2010, Kesiapan Kali
Page 121 and 122: 121 • Badan Perijinan Dan Penanam
Page 123 and 124: 123 • Daniel Murdiyarso et al, Me
Page 125 and 126: 125 • Marcus Colchester et al, Pr
Page 127 and 128: 127 • Yosep Ruslim et al, STUDY O
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East Kalimantan Environmentally Sustainable Development Strategy

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