East Kalimantan Environmentally Sustainable Development Strategy

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1. The development of coal-bed methane would bring important new stocks of natural gas
online, while mitigating the environmental harm of methane emissions from existing coal mines.
Use of CBM will ensure that our existing LNG and natural gas network and industry in the
province is fully utilized as production declines in our offshore fields.
2. Develop integrated pulp and paper mills. Making use of timber now discarded as waste,
boosting productivity on existing timber plantations and bringing idle timber plantations into
production would increase the supply of timber from sustainable resources to the extent that
the province could develop two integrated pulp and paper mills, with a total capacity of 2.6
million tons. Improvements in land management and a sequenced financing approach will
mitigate the risk that building mills creates demand for unsustainable timber harvesting.
3. Improved management of timber plantations could yield IDR 4.9 trillion in additional
GDP. Some 600,000 hectares of lands cleared for timber plantations, but currently sitting
idle can be brought into production. This wastage of land is a legacy of poor past practices by
the pulp and paper industry. Still, looking forward, pulpwood production on already cleared
land is sustainable, especially in synergy with the other initiatives set out here. Plantations with
short planting cycles are carbon neutral at best, but they can provide livelihoods and form the
foundation for higher-value-added activities. In addition, we need to improve the productivity of
our existing timber plantations to the levels reached in Sumatran plantations.
4. Accelerating oil and gas exploration is also important for slowing the decline in the oil
and gas sector, which is still the largest in the economy. Our existing fields are mature and
face declining production. There are still significant estimated potential gas resources in the
province, yet exploration activity has decreased as with all of Indonesia due to uncertainty in
regulations. We aim to encourage more petroleum exploration by working with BP MIGAS to be
more investor friendly and by directly facilitating local licenses and security
DRAFT
5. Increasing productivity of our agriculture sector is also important. Yields from nonpalm
oil agriculture are some 25 percent below national norms. Incentives to farmers, better
infrastructure, development of innovative nucleus-plasma schemes to increase the synergies
between plantation agriculture and smallholders and more delivery of agricultural extension
services all could help increase our productivity. Simply hitting the national average would add
some IDR 2.9 trillion to provincial GDP by 2030, while benefitting rural populations
ENABLERS
There are three levels of action required from government to capture the abatement opportunities
and enable the economic activities set out in brief above, and in more detail in the pages that
follow. These form perhaps the most critical sets of actions required, because without the right
governance of climate change mitigation and sustainable development, we will not succeed.
First, much of what needs to be done is simply to better enforce existing rules. For more
than ten years we’ve suffered the ill effects of peatland and forest fires, and struggled to combat
them. Our forestry and mining regulations embody much wisdom and best practice. The challenge
is clearly in enforcing the rules that we have on the books, and in clarifying and settling whatever
ambiguities or overlaps may constrain better regulation. While we can expect to attract added
support from outside, given the importance of good governance of our forests to the global carbon
emissions picture, which will be useful, but the success factors are in our control.