East Kalimantan Environmentally Sustainable Development Strategy

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26 Exhibit 9 Shifting into higher value add activities and low carbon sectors could boost East Kalimantan’s real GDP growth from 3% to 5% East Kalimantan’s real GDP forecast IDR Trillions 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0 2005 SOURCE: team analysis 10 15 20 25 2030 Environmentally Sustainable Development Strategy Business As Usual CAGR GDP per capita 2030 IDR Millions animals and plants, such as the orangutan, clouded leopard, and river dolphins. Finally, East Kalimantan wants to be known as a green province and be an important contributor to Indonesia’s effort to be a global leader in addressing climate change. REDD (Reduced Emissions from Deforestation and Degradation) is a new framework that can both help reduce emissions and increase GDP. REDD+ is an international mechanism to mitigate global climate change by creating payments to protect forests and peatlands that would otherwise be converted from their natural state, for example, to be used as plantations. In fact, the abatement initiatives identified above can be considered to be part of a REDD+ strategy; reducing forest degradation through better logging techniques, ending the use of fire for land clearing, rehabilitating degraded peatlands, reforesting lands, and using degraded lands rather than forested lands for agriculture. REDD+ could be a powerful integrating framework for these initiatives. For example, after a concession is moved from forested land to degraded land, REDD payments could be used to ensure local communities and companies then protect the forested land. Otherwise, the forested land would be at risk of having a new, different concession issued for it in the future unless the land was re-zoned as protected land. DRAFT 5% 3% 44.6 33.2 Concession buyout schemes, in which concessions are purchased from concession license holders to prevent forest clearing, should be a last resort as they could be quite costly. If an acacia plantation concession on forested land could not be moved to degraded land or reduced in size via improved yields, then the only option to avoid deforestation would be to buy out the concession in full. Payment for buyout schemes are still being worked out. For those cases where only past expenses or outlays are compensated, the cost of these schemes could be high, but not unreasonably so on a cost-per-abated-ton basis. However, if it were required to compensate concession holders and local communities for the complete loss of future revenue, then costs would become prohibitively high. Concession buyouts for palm oil and acacia concessions could
27 TOP 5 ABATEMENT INITIATIVES Top 5 Description abatement initiatives Zero burning Prohibiting fire as a tool for land preparation, establishing policy fire brigades, and ensuring strong enforcement and large penalties for rule violations can reduce emissions from peat and forest fires Reduced Reduced impact logging, e. g., skidding tracks, winches, impact and harvest planning, can remove commercial timber logging with less destruction of non-commercial biomass. This lowers emissions from deforestation significantly. Use of degraded land Rehabilitate opened peatland Reforestation TOP 5 GDP INITIATIVES Top 5 GDP Description initiatives Develop and utilize coal-bed methane Build a 2.6 million ton pulp and paper mill Improved management of timber plantations Accelerate oil and gas exploration Increase productivity of agriculture Forest management units are required to supervise logging, with about one forest employee overseeing 15,000 ha of a natural timber concession Use of degraded land (lahan kritis) for future expansion of oil palm plantations, timber plantations and agriculture will allow expansion with lower emissions by avoiding deforestation for new concessions Reducing emissions from peat decomposition of agricultural areas can be achieved by adjusting and maintaining the water table at appropriate levels via dam systems and applying best practices in rice cultivation Rehabilitating land that has been partially degraded and reforesting will restore ecosystem services and also absorb carbon Abatement Cost MtCO2, USD per 2030 tCO2 47 0.35 to 1.35 34 0.40 to 1.50 24 2.6 to 9.8 18 0.20 to 0.70 12 2.0 to 3.1 GDP, Tr. IDR 2030 (percent of 2030 BAU GDP) 27.9 (10%) DRAFT Support development of exploration and production of the coalbed methane reserves in East Kalimantan and feed into Bontang LNG, domestic gas network or additional downstream facilities. Develop two integrated pulp and paper mills with a capacity of 2.6 million ton. Bring over 600,000 ha of currently inactive timber concessions into production. Incentivize investment in existing timber plantations to improve yields to the levels achieved in the best of Sumatran plantations Encourage more petroleum exploration by lobbying industry regulator to be more investor friendly and by facilitating local licenses and security Subsidize nucleus farmers and use extension services to improve yields by 20 percent to reach Indonesian averages 10.7 (5%) 4.9 (2%) 4.71 (2%) 3.20 (1%) Table 1 Table 2
Page 1 and 2: East Kalimantan Environmentally Sus
Page 3 and 4: 3 East Kalimantan Environmentally S
Page 5 and 6: 5 Contents Preface 7 Acknowledgemen
Page 7 and 8: 7 Preface A broad global consensus
Page 9 and 10: 9 Acknowledgements The DNPI and the
Page 11 and 12: 11 Executive summary East Kalimanta
Page 13 and 14: 13 1. The development of coal-bed m
Page 15 and 16: DRAFT 15
Page 17 and 18: 17 Kaltim Green Program The Governm
Page 19 and 20: 19 1. The context for East Kalimant
Page 21 and 22: 21 This resource development pathwa
Page 23 and 24: 23 Both Berau and Malinau are large
Page 25: 25 In the BAU scenario, CO 2 e emis
Page 29 and 30: 29 Kalimantan’s shift to a climat
Page 31 and 32: 31 The sector’s 57 MtCO2e of net
Page 33 and 34: 33 Outside of the sector’s need f
Page 35 and 36: 35 The greatest expansion is expect
Page 37 and 38: 37 improving water management in on
Page 39 and 40: 39 Including financial transfers fo
Page 41 and 42: 41 after the identified abatement m
Page 43 and 44: 43 The Case of Oil Palm Permits and
Page 45 and 46: 45 Emissions from the forestry sect
Page 47 and 48: 47 across Kalimantan in 1997 and 19
Page 49 and 50: 49 Utilizing concession buyout sche
Page 51 and 52: 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
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81 Emission from flaring is declini
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83 Satellite images can help monito
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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
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93 Borneo conservation area as well
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95 agricultural processing. As Pena
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97 Range of climate related risks t
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99 predict increased precipitation
Page 101 and 102:
101 In addition to the refinery and
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103 The greatest economic risks fro
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105 change issues. In December 2009
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107 Proposed BFCP governance and ma
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109 the lack of a strong system, th
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111 Carbon Accounting, Standards, a
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113 EXAMPLE INITIATIVES REQUIRING C
Page 115 and 116:
115 for example, includes represent
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DRAFT 117
Page 119 and 120:
119 Sources • 2010, Kesiapan Kali
Page 121 and 122:
121 • Badan Perijinan Dan Penanam
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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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