East Kalimantan Environmentally Sustainable Development Strategy

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substantial natural resource extraction and a population density four times greater than Kutai Barat
and Kutai Timur, much of Kutai Kertanegara’s lowland forests have been cleared, with the result
that the district is only 30 percent forest covered today. The district also contains around 250,000
ha of peatlands, the second most of any district, but these too have been mostly deforested and
drained.
With baseline emissions of 52.3 MtCO2e in 2005, Kutai Kertanegara has the largest
emissions in East Kalimantan. The single largest source comes from fires, particularly on the
district’s exposed peatlands, which release 16.8 MtCO2e annually. Emissions from continued
clearing of forests are also sizeable. Palm oil expansion into forest results in 6.0 MtCO2e. While
there are already 220,000 ha of concessions with HGU approvals today, there will be continued
expansion as 466,000 ha have location permits. Kutai Kertanegara has far fewer emissions from
forestry than its neighbors as it has comparatively less land in HPH and HTI concessions, 480,000
and 37,000 ha respectively. In fact, most of the district’s forests have been converted to uses for
other economic sectors. But deforestation has not yet plateaued; mining is particular strong in
Kutai Kertanegara, resulting in emissions of 5.4 MtCO2e from deforestation for mining activities,
more than any other district from this source.
By optimizing its land use, Kutai Kertanegara could reduce the carbon footprint of its
current economic activities by 34.5 MtCO2e against 2030 business as usual. The largest
potential comes from instituting zero burning (9.0 MtCO2e), rehabilitating peatlands (5.4 MtCO2e),
using degraded lands for oil palm expansion (3.0 MtCO2e), reforesting slightly degraded lands
(2.8 MtCO2e), and stopping illegal mining (2.4 MtCO2e). Fires occur throughout most of Kutai
Kertanegara’s 2.7 million ha; fighting fires across such a large expanse will be costly and difficult.
The priority should be to target fires in and around the district’s 250,000 ha of peatland, which
produce much greater emissions from fire. Rehabilitating opened peatlands and rewetting them
will also help reduce the spread of fires while reducing emissions from peat decomposition.
Degraded land offers a large opportunity for Kutai Kertanegara to reduce emissions, but
the district will require significant effort to use this lever properly. The district has 203,000
ha of critical and very critical land with low forest cover that would allow for the expansion of palm
oil plantations without the high emissions of deforestation. However, only 93,000 ha of the land
has plots of at least 500 ha or larger. These lands would need to be consolidated as typically a
palm oil plantation needs 5,000 continguous hectares to attract investment. In addition, given
the district’s relatively high population density of 19 people per square kilometer, significant time
and effort may be necessary to ensure that all communities in degraded lands give free and prior
informed consent to use the lands for new concessions. Perhaps easier would be the reforesting
of the 950,000 ha of slightly critical and potentially critical lands, as no minimum plot sizes nor
consolidation would be required.
DRAFT
Despite already having the largest economy in East Kalimantan, Kutai Kertanegara
could expand its economy faster, particularly from developing coal-bed methane and
accelerating exploration and investment in oil and gas exploration. With oil and gas such
a dominant part of the economy yet a relatively low source of emissions, Kutai Kertanegara can
support BP MIGAS to accelerate exploration in oil and gas fields by providing regulatory incentives.
In particular, it is important for the district that the Offshore Mahakam field has clear ownership
and investment plans as it will soon come off plateau and need substantial new capital to slow
the decline in its production. A top priority for the district would be the development of coal-bed
methane as a complement to its existing oil and gas production; this requires working with the
province and national BP MIGAS to ensure regulations support its rapid development. Every day
that Kutai Kertanegara mines 34 thousand tons of coal without capturing CBM first, the valuable
methane is released into the atmosphere; representing an increase in greenhouse gases and a
permanently lost opportunity to sell that gas. Kutai Kertanegara already has three of the four blocks
approved for CBM in East Kalimantan.