East Kalimantan Environmentally Sustainable Development Strategy

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growth strategy is to ensure that the people of East Kalimantan do not achieve reduced emissions
at the cost of reduced growth. Additional financing will needed to underwrite the considerable
investments associated with the transition to a climate-compatible development path. Some of
that financing will likely be provided by the domestic government, some by international donor
agencies, and some directly by the private sector as companies see the potential to generate
positive returns.
East Kalimantan can reduce the carbon footprint of its current economy by 60 percent
from the business-as-usual trajectory by 2030. This reduction comes mainly from the five
priority sectors of palm oil, forestry, agriculture, coal mining, and oil and gas. A total of 22 initiatives
in these sectors could reduce the province’s emissions by 184 MtCO2 (an additional reduction of
13.2 MtCO2e could be achieved by activities focusing on other sectors, for example construction)
at an average cost of USD 2.0 to 3.1 per tCO2e abated. This represents a reduction of 60 percent
from the level of emissions expected in the business-as-usual scenario in 2030.
Five abatement initiatives account for 75 percent of all the CO2 reduction potential in
East Kalimantan. All five focus on increasing land-use efficiency. The maximum reduction
from these initiatives would be 135 MtCO2 by 2030, although a number of challenges would need
to be overcome to reach the full reduction. All of the abatement initiatives described in Table 1 are
discussed in more detail in Chapter 3, Sector Strategies.
East Kalimantan can increase its GDP growth from a business-as-usual rate of 3 percent
p.a. to 5 percent p.a. without increasing emissions by moving to higher value-added
activities and promoting less carbon-intensive sectors. East Kalimantan has a relatively
diverse economy, especially when compared to provinces outside the heavily-populated Sumatra-
Java-Bali chain. Yet, with a population of only 2 million, East Kalimantan has only a small domestic
market. Much of its abundant resources are exported in raw form to Java, Sumatra and overseas
where they are turned into higher-value added goods (e.g., raw logs to Sumatran mills and Javanese
furniture manufacturers). East Kalimantan has an opportunity to capture more downstream
processing and thus increase the GDP contribution that the province gains from its natural resources.
The top five economic initiatives could increase GDP by IDR 50 trillion in 2030, equivalent
to IDR 9 million per person (Table 2). These initiatives include developing a new resource (coalbed
methane), improving productivity of underutilized sectors (timber plantations and agriculture in
particular), and developing downstream activities such as a pulp and paper mill and CPO refinery.
Each initiative is described in more detail in the relevant sector strategy.
DRAFT
This increased growth will require safeguards to ensure that it does not encourage other
sources of emissions. Increasing the productivity of HTI and palm oil concessions, for example,
could make them more attractive for investors and thus encourage the development of new
concessions in forested lands if measures, such as REDD, are not in place to prevent this. Similarly,
developing additional pulp and paper processing capacity without first ensuring a sustainable
supply of acacia could simply accelerate deforestation by increasing demand for current
unsustainable logged timber. Financial safeguards, proper sequencing, and thoughtful spatial
planning will all be needed to ensure the shift to environmentally sustainable GDP growth.
While GDP is an important and visible indicator of development, it is not the only metric
that is important to the people of East Kalimantan. Our official slogan of “Develop East
Kalimantan for all” recognizes that too much of the province’s natural resource extraction has
benefited a few companies and individuals as opposed to creating jobs and income for the
majority. Creating jobs, improving rural incomes, and reducing inequality are also vital parts of
our sustainable development strategy. Beyond reducing CO2e emissions, we have important
environmental goals to reduce pollution, maintain natural resources, protect fisheries, protect
water quality and retain watersheds to reducing flooding. East Kalimantan is home to important
biodiversity which we want to protect, represented most notably by a number of rare and beautiful