Berau Forest Carbon Project / BFCP A Hope we can believe in REDD Implementation in Berau: Berau Forest Carbon Project / BFCP An Indonesian REDD Demonstration Activity Dr. Dicky Simorangkir Forest Program Director – TNC Indonesia

TNC’s Global Climate Program evolved to various carbon projects under different schemes starting in 1995 with Noel Kempff project in Bolivia reforestation (Bayou Pierre and Tensas River Basin, Lousiana) conservation, sfm, community (Berau-Indonesia, Adelberts-PNG, Rio Bravo-Belize) sustainable forest management (Garcia River Forest-California) reforestation, community (Tengchong-Yunan/Cina andGuaraquecaba-Brasil) conservation, community (Noel Kempff, Bolivia) Berau Forest Carbon Program

REDD in Indonesia BFCP ~ why Berau? Large sub-national Program Integration across scales and sectors Landscape approach – better monitoring, less leakage Support from decentralized government Probably all that is feasible Could be a good example / test case for national implementation REDD Projects: site/unit, district, province, national 4 Demonstration Activities launched by the government in Jan 2010 Berau Forest Carbon Program Indonesia–TNC High forest cover; high threat High biodiversity Strong support from local stakeholders, particularly local government Strong program to build on Indonesia–Germany Indonesia–Australia Indonesia–ITTO

Total Area ~ 2.2 millions ha BFCP ~ challenges on the ground Total Area ~ 2.2 millions ha 13 Timber concessions 780,000 ha 32 Oil palm concessions 189,000 ha 27 Mining concessions 185,000 ha 3 Timber plantation 229,000 ha 7 Protected forests 361,000 ha Others 456,000 ha

Carbon Credit Transaction BFCP ~ grand strategy BFCP ~ carbon accounting framework Scoping area strategy standard REL area changes emission factors reference area projection of BAU Additionality costs strategies, effectiveness and co-benefits estimated emission reduction target Buffer & discount estimated leakage estimated permanence MR & Validation monitoring plan reporting validation & registration MR & Verification measurements verification Carbon Credit Transaction 1 6 6 2 5 5 3 3 Historic Performance Period 1 REL 4 4

Reference Emission Level

Reference Emission Level 1990-2000 2000-2005 2005-2008 1990-2008 BERAU TOTAL Av. Emission (ton CO2-eq/ha/year) 6.57 7.9 11.65 9.2 Total Emission (ton CO2-eq/year) 14,390,172 17,316,981 25,537,545 20,165,036 PROTECTION FOREST 0.43 1.08 0.94 1.03 937,929 2,367,687 2,068,553 2,246,814 PERMANENT FOREST AREA 3.03 3.36 4.73 3.87 6,651,281 7,360,485 10,359,273 8,491,556 NON-PERMANENT FOREST AREA 3.37 3.66 6.13 4.47 7,394,094 8,027,788 13,440,026 9,791,625

Better siting, land swaps, HCVF, better management BFCP ~ grand strategy Reduced emission from DEFORESTATION: Forested areas outside state forest areas Plantations Better siting, land swaps, HCVF, better management Historic Performance Period 1 REL Strategy 1

Oil palm concessions cover about 9% of Berau District 44% of the concession areas have undisturbed, high-density, or medium density forest Emission from conversion would be 590 tons per ha

BFCP ~ grand strategy Production Forest Plantations Reduced emission from DEFORESTATION: Forested areas outside state forest areas Reduced emission from FOREST DEGRADATION: Improved management of production forest and plantation forest will reduce forest degradation Production Forest RIL, HCVF, sfm, certification Plantations Better siting, land swaps, HCVF, better management Historic Performance Period 1 REL Strategy 1 Strategy 2

Reduction in C if changed to plantation Logging concessions cover about 40% of Berau District Well-managed concessions can store 75% of the carbon as an undisturbed forest Potential annual emission reduction 47,000 tons CO2 from a 50,000 ha forest concession Land Cover Tons C/ha Reduction in C if changed to plantation CO2 Emissions Ha Emissions Undisturbed Forest 284 231 848 11,374 9,642,536 Logged over Forest 190 137 503 62,834 31,592,307 Total 74,208 41,234,843 Timber plantation concessions cover about 10% of Berau Ca. half of the concession areas have undisturbed, high-density, or medium density forest Emission from conversion would be 500+ tons per ha

BFCP ~ grand strategy Production Forest Plantations Protected Areas Reduced emission from DEFORESTATION: Forested areas outside state forest areas Reduced emission from FOREST DEGRADATION: Improved management of production forest and plantation forest will reduce forest degradation Enhancing CARBON STOCK: Restoration and replanting of degraded areas Production Forest RIL, HCVF, sfm, certification Plantations Better siting, land swaps, HCVF, better management Protected Areas Better management, sustainable financing, restoration Historic Performance Period 1 REL Strategy 1 Strategy 2 Strategy 3

Protection forests cover about 16% of Berau 32% of protection forest area is degraded Potential for more than 13 million tons CO2 sequestered through enhancement of forest

BFCP ~ grand strategy Cross-Cutting: Improved spatial planning, Reduced emission from DEFORESTATION: Forested areas outside state forest areas Reduced emission from FOREST DEGRADATION: Improved management of production forest and plantation forest will reduce forest degradation Enhancing CARBON STOCK: Restoration and replanting of degraded areas Cross-Cutting: Improved spatial planning, Improved governance (capacity building, policy and legal framework), Sustainable financing Community empowerment and engagement, Improved livelihood Production Forest RIL, HCVF, sfm, certification Plantations Better siting, land swaps, HCVF, better management Protected Areas Better management, sustainable financing, restoration Historic Performance Period 1 REL Strategy 1 Strategy 2 Strategy 3

BFCP ~ MAIN CHALLENGES !!! 1. Need substational funding 2. Up-front financing is critical Mix of public/private sources The case for early public funding Substantial readiness investment required upfront High uncertainty will remain for several years The case for long-term private funding Future emission predicted >100 mill. tons over 5 years 50% decrease in emissions may require $500 million Funding needed is beyond public finance 2. Clear and sound institutional and legal framework 3. Clear and sound financing mechanism 4. Where is community?

Thank You

Berau Forest Carbon Program Development (Jan 09 – Dec 10) BFCP – project phases Program will seek funding for a 5-year demonstration phase. It is expected that during that time, international finance mechanisms will be agreed to by countries enabling strategies to be scaled up and sustainable financing to be achieved Full Implementation ??? (???- ) Berau Forest Carbon Program Demonstration Phase (2010-2015) We are here now! Development (Jan 09 – Dec 10) Pilot site-based strategies: Improved forest management Forest restoration Oil palm swap Land-use planning, policies, enforcement Monitoring and verification Adaptive management Strategies implemented across Berau Monitoring and verification Expansion to additional districts and provinces Scoping (Apr – Dec 08) Baseline scenario and monitoring approach Refine strategies for reducing deforestation Legal issues Stakeholder support Funding sources Business plan Political support Situational analysis/drivers Rough program design hypothesis Identification of partners/contractors

BFCP ~ institutional framework Government of Indonesia DRAFT Buyers / Investors Funders Bilateral Multi lateral Philanthropic Ministry of Forestry Demonstration Activity authorization for non- forest area Bundled ERs for full BFCP $$$ Demonstration Activity authorization for forest estate $$$ BFCP Partner Berau District Government Technical Assistance MOU DA partner MOU Bupati Others Supervisory Council District Government Province Government National Government Civil society / TNC District Agencies Others BFCP Trust Secretariat Technical Assistance Unit BFCP Technical Teams TNC Integrated BFCP REDD+ Programs and Projects Stakeholder Engagement Planning Governance MRV Communities Timber Oil palm Conservation

BFCP ~ partners Forests Land managers Government Other stake-holders Companies (timber concessions, plantations, mining) Communities Land managers GOVERNMENT District, Province, National Various agencies: Forestry, Environment, Agriculture, Mining, Planning, Finance, National Climate Change Council Government Forests Other stake-holders OTHER STAKEHOLDERS Wider society in Berau Nearby districts and communities FINANCE & SUPPORT Donors: USAID, AUSAid, NORAD, TNC, ? Investors Technical: TNC, ICRAF, Winrock, Univ. Mulawarman, Sekala, World Education, Univ. Queensland, USFS, Daemeter, WRI, etc. Finance and technical support