East Kalimantan Environmentally Sustainable Development Strategy

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Borneo conservation area as well as home to Sebuku Sembakung national park, home to the few
remaining clouded leopards, sun bears, and other iconic but disappearing Borneo animals.
Malinau’s baseline emissions were only around 8 MtCO2e in 2005, the fifth lowest in
East Kalimantan. More than half of all emissions come from logging. The single largest HPH
concession in East Kalimantan is PT Essam Timber’s 355,000 ha concession in Malinau. In total,
the district has nine companies operating HPH concessions covering 765,000 ha. Unsustainable
logging practices, such as poor use of skid paths, results in forest degradation and emissions
of 4.7 MtCO2e. There is also approximately 2.6 MtCO2e from smallholder deforestation for
agriculture. Other sources are quite small.
Malinau could abate 7.4 MtCO2e against 2030 business as usual, primarily through
reduced impact logging. Given its large areas of HPH concessions, Malinau should focus on
implementing RIL. Working with the nine HPH concessionaires to implement skid paths, use
winches (as opposed to bulldozers), and other RIL methods could yield the same amount of
saleable timber from the concessions but with 30 to 50 percent less emissions, as less collateral
biomass is destroyed in the logging process. Malinau also has almost 90,000 ha of degraded land
that can be used for expansion of agriculture and palm oil. While there are no palm oil concessions
yet with HGU approval, eight concessions totaling 134,000 ha have received location permits; it is
important that the palm oil concessions utilize as much of the existing degraded land as possible.
Given that Malinau already has low emissions, its environmentally sustainable development
strategy needs to focus less on reducing emissions from existing activities than ensuring that future
growth comes from higher-value added activities or low carbon sectors.
More than 40 percent of Malinau’s GDP is derived from forestry, which is thus an
important sector for growth. Given its large HPH concessions, it is important to ensure that as
much value as possible is gained from the logging activities. One way is to ensure high utilization
of harvested logs, so that in addition to using the lower tree areas for plywood and veneer the
concessionaires use the smaller branches for pulp and paper and wood pellet production. While
Malinau’s inland position makes it an unfavorable location for a pulp and paper mill, the district can
focus on other downstream forestry products, such as niche wood products and non timber forest
products.
Agriculture will also remain important for Malinau. Agriculture provides income to the rural
villages in Malinau and currently makes up 6 percent of GDP. While Malinau’s low population has
fewer smallholders to reach, they are scattered throughout the district, which makes improving
agricultural productivity more challenging. Growing more estate crops in addition to staple crops
on small plots of degraded land can also boost GDP.
NUNUKAN
DRAFT
Nunukan, the large district on East Kalimantan’s northern border, has abundant forests
and peatland as well as a diverse economy. Like its neighbor Malinau, Nunukan retains much
of its forest cover, more than 80 percent. But unlike Malinau, Nunukan has substantial peatlands,
over 400,000 ha, more than any other district of the province’s total. Its IDR 1.2 trillion GDP is
fairly diverse: oil and gas from the district contributes 30 percent of GDP, services account for 20
percent, forestry 16 percent, coal 13 percent, agriculture 11 percent, and palm oil 3 percent.
Nunukan has substantial emissions with a baseline of 40 MtCO2e in 2005, almost onefifth
of the province’s total. While Nunukan does not have the highest level of deforestation
nor the largest population, damage to its abundant peatlands have pushed up its emissions.
Smallholder fires spread across degraded peatlands, causing 16 MtCO2e of emissions annually.
Likewise, Nunukan’s 278,000 ha of HPH concessions partly cover its peat forests; the logging
leads to peat decomposition emitting 6.8 MtCO2e, much larger than the 1.5 MtCO2e resulting from
unsustainable logging practices. Nunukan has few palm oil concessions, just 78,000 ha with HGU
licenses, and there is currently little expansion, as only 97,000 ha have location permits. These