East Kalimantan Environmentally Sustainable Development Strategy

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50 Exhibit 27 water management can help to reduce the risk of flooding in the wet season and prevent the risk of drought in the dry season, events that often reduce yield and therefore result in financial losses. Water management is relatively low cost, with an associated cost below USD 1 per abated tCO2e. While the restoration of peatlands via water management is low cost, replanting degraded peatlands is relatively expensive with costs of USD 500 to 1,100 per ha, or USD 2 to 5 per ton of sequestered CO2e. Fostering natural regeneration of existing tree cover could reduce the replanting costs significantly and should be applied wherever possible. Fire prevention and management could yield 8 MtCO2e in abatement annually by 2030. The prevention of peat fires has a significant emissions abatement potential at a relatively low cost of less than USD 1 per avoided tCO2e. Major emission reductions could be achieved by implementing a zero burning policy to prevent encroachment of fires into plantations and logging concessions, providing appropriate and practical equipment (and, if appropriate, financial incentives) for fire fighting, developing appropriate early-warning systems based on fire risk status and field-based fire detection, strengthening fire brigades, ensuring strong enforcement and large penalties for rule violations, and building public awareness of the economic and social costs of forest fires in the province. Costs for reducing carbon emissions within the forestry sector are, with the exception of a plantation concession buyout, relatively cheap if calculated per ton of abated CO2e basis, averaging to USD 1 to 2. However, given the sheer size of the overall abatement captured, total costs reach considerable levels of up to USD 190 million per year (EXHIBIT 27). 16 Significant financial resources are required to reduce emissions within the forestry sector The cost to reduce forestry emissions is relatively low per tCO 2 e abated… High cost estimate Low cost estimate … but given the size of the total annual abatement potential, costs are significant DRAFT Reduction cost 1 USD per tCO 2 e 30 25 20 15 10 5 0 10 25 0 30 20 35 40 45 50 60 55 65 -5 70 75 5 15 80 -10 -15 -20 -25 -30 0.2 0.6 1.1 1.3 3.1 4.0 High cost estimate Low cost estimate 14.0 85 90 95 100 Reduction potential 2 MtCO 2 e per year Projected implementation costs USD millions 7 10 3 Reduced Impact Logging 31 10 21 Degraded land - forestry 16 24 8 Reforestation 110 37 73 plantation buyout - forestry 6 8 3 Zero burning - forestry 3 5 2 peat rehabilitation - forestry 1 1 0 low cost estimate high cost estimate 190 63 127 Water Annual cost management - forestry 1 utilizing a 4% discount rate 2 The width of each bar represents the volume of potential reduction. The height of each bar represents the cost to capture each reduction initiative 1 2 3 4 5 6 7 8 9 SOURCE: JP Morgan, EMRP Masterplan, Ministry of Forestry, Wetlands International, team analysis 16 The two already FSC certified concessions of PT Sumalindo and PT Intracawood have not been considered as pilots, however those concessions could be models for future sustainable logging activities
51 Pilot Projects Pilot projects have been identified for five abatement initiatives across the province, which could result in annual emission reductions of 34 MtCO2e. Pilot projects for implementation will need further screening to take into account important criteria such as support from companies and the communities involved and potential biodiversity benefits. A first list of potential pilot projects has been identified to target opportunities providing the largest abatement with quick, significant emission reductions and further economic development by (EXHIBIT 28). Identified potential pilot projects could reduce annual emissions by 34.4 Mt CO 2 e Reduced impact logging Degraded land Concession buyouts Peatland in Nunukan Reforestation 1 if implemented to 100% of technical abatement 2 with sufficient international and domestic funding for REDD SOURCE: team analysis PRELIMINARY Description Abatement 1 ▪ Pilot RIL based on new harvest planning system, skidding track layout, and harvesting technology in the 3 largest concessions in each district ▪ Implement empowered forest management unit across the province overseeing 10,000 ha of forest per employee ▪ Develop pilot projects to establish timber plantations on degraded land in Berau, Kutai Barat, Kutai Kertanegara, and Kutai Timur with support of TNC, WWF, and GTZ to capture potential of approx. 50% of total degraded land area ▪ Develop pilot projects in Berau and Kutai Barat to avoid ongoing emissions from forest degradation and inactive concessions ▪ Rehabilitate drained and degraded peatland within concessions ▪ Implement water management in active concessions ▪ Rehabilitate slightly critical land in Kutai Kertanegara, Kutai Timur, and Kutai Barat to restore ecosystem services and carbon sequestration DRAFT The potentially largest pilot group would be to implement RIL within the 10 largest logging concessions. Those concessions cover an area of more than 1.7 million ha, and focusing on cooperating with those companies to implement RIL within those concessions could reduce emissions by approximately 12 MtCO2e p.a. while maintaining harvesting volumes at least at current levels. Seven concessions identified for the pilot are held by private companies, and three concessions are held by the state owned enterprise PT Inhutani. Water management in active plantations and logging concessions and peat rehabilitation in inactive ones could be piloted in Nunukan. Nunukan holds the largest areas of deep peatland within the province. Action to protect and minimize degradation of those deep peatlands is urgent, as nearly the total area is already covered (but not yet developed) with concessions (EXHIBIT 29). Effective action on peatland in Nunukan could result in a significant emission reduction for the forestry sector of up to 4 MtCO2e p.a. MtCO2e 12.0 7.4 3.0 1 4.0 8.0 Exhibit 28 Other pilot projects include using degraded land within the forest estate for timber plantations. Districts like Malinau or Berau, have large and undisturbed forest cover, but their forests are under severe threat. They could be prepared for a REDD payment scheme. The latter project could also be part of the nationwide pilot to be launched in 2011 in accordance with the Norway–Indonesia REDD+ partnership signed on May 28, 2010. None of the potential pilot projects described above should slow economic growth; concession holders will be allowed to proceed with their economic activities.
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 and 26: 25 In the BAU scenario, CO 2 e emis
Page 27 and 28: 27 TOP 5 ABATEMENT INITIATIVES Top
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: 49 Utilizing concession buyout sche
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 and 104:
103 The greatest economic risks fro
Page 105 and 106:
105 change issues. In December 2009
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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