East Kalimantan Environmentally Sustainable Development Strategy

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66 Real-time and publicly available MRV systems are needed to help communities fight fires. While the zero burningpolicies will help with fire prevention, inevitably some man-made fires will continue, and the community fire brigades will need to focus on extinguishing them. While watchtowers are an effective local means of monitoring, satellite detectors can identify remote fires or larger fires that will require support from the district and province to help suppress. There are already existing tools, such as the online IndoFire service, which are publicly available and can be used to support this monitoring. COAL SECTOR Coal mining has long been a source of tension in development plans. Coal’s value attracts substantial investment to East Kalimantan, and it provides significant tax revenues and contributes to GDP. Yet, coal mining provides few jobs compared to labor-intensive manufacturing or agriculture. If done poorly, mining can leave huge environmental consequences. Still, coal is a central part of East Kalimantan’s economy and will remain so for decades. This strategy aims to improve its efficiency and seek measures to minimize its destructive impacts. Current Context East Kalimantan has several mineral resources, but coal mining dominates production. While there remain an estimated 50 million tons of gold and silver, there has been very limited gold and silver production since the closure of the PT KEM mine in 2004. East Kalimantan has substantial coal reserves, estimated to be 3.6 billion tons, equal to 19 percent of Indonesia’s total. Thus, virtually all mining today is for coal. The majority of East Kalimantan’s coal is low in sulfur and ranges from low- to high-calorie (43 percent of reserves are within 6,100–7,100 CV range), which means East Kalimantan coal can be exported to both steel mills (which require high-calorie coal) as well as power plants. Coal mining is a significant driver of East Kalimantan’s economy. From 2000 to 2008, coal production grew rapidly by 15 percent p.a., raising its contribution to total GDP from 8 percent to 20 percent. Production has already reached 119 million tons and some infrastructure, such as ports, are reaching their limits. Going forward, growth in coal production is expected to slow to 5 percent, as infrastructure constraints and concession limits are reached, in line with Indonesia’s average. (Box 4 discusses concession types.) At this rate, by 2030, the coal mining sector will account for a significant 31 percent share of the provincial real GDP. DRAFT Coal mining in East Kalimantan contributes significant emissions, mainly through its associated deforestation, which are estimated to be 27 MtCO2e in 2010. These emissions are equivalent to 11 percent of East Kalimantan’s total emissions. Most emissions from coal mining are due to deforestation to open up areas for mining exploration and production, not the mining processes themselves. As each hectare of deforested land emits over 800 tons of CO2e, the deforestation due to mine opening accounts for 68 percent of the emissions from the coal sector, while the mining process itself (such as digging, crushing, and transport) contributed only 21 percent of total emissions. The remaining 11 percent of emissions comes from methane that is released from the coal seam as it is mined. As the coal sector is growing, emissions will likely grow by 2 percent p.a. and reach 41 MtCO2e by 2030, equivalent to 12 percent of the province’s total emissions. Deforestation is high as most miners use open pit mining, which strips the surface of the concession. Underground mining could avoid much of this deforestation, but it is unfeasible in East Kalimantan. Virtually all coal reserves in East Kalimantan are shallow, making underground mining technically unfeasible. Furthermore, mining in East Kalimantan is dominated by small companies, which lack the sophisticated equipment, knowledge, and funding to implement underground mining, which has much greater safety risks. Of 301 coal mining companies in East Kalimantan, only 2 have employed underground mining, i.e., Kitadin and Fajar Bumi Sakti.
67 Many mining operations are located within the natural forests DRAFT Exhibit 44
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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
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 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: 65 farmers . We have identified sev
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
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DRAFT 117
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119 Sources • 2010, Kesiapan Kali
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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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