Indonesia has delayed the finalisation of new rules to underpin a new carbon-credit market around avoided deforestation, a further sign of the complexities around this much-heralded new market mechanism.
Indonesia is among the first of the rainforest nations to tackle the intricate rules needed to govern the establishment of a carbon market around forest preservation. Under the UN-sponsored Reduced Emissions from Deforestation and Degradation (REDD), developed world governments and investors would pay developing countries and their forest stakeholders not to cut down forest. This would offer an alternative revenue stream to those who rely on forests for their livelihood.
Billions of dollars in payments are envisaged flowing to tropical rainforest nations where deforestation is contributing up to 20 per cent of the world’s total greenhouse gas emissions each year. But there are concerns that forest communities may lose out in the deal and not see a fare share of the revenues coming their way because of bureaucracy, corruption and a lack of legal enforcement sometimes afflicting developing countries.
Other rainforest countries, the UN, World Bank and NGOs are watching closely for how rules emerge in the country, a worldwide precedent in the development of REDD markets. A major factor in new laws to govern such schemes in Indonesia will be how avoided deforestation revenues are divided up between three layers of government, private landowners and forest communities.
Between 12 and 20 REDD projects are at various stages of early development in Indonesia currently but the government has only released interim rules to cover demonstration activities. Laws to cover full-scale projects were due in December but the Ministry of Forestry now says more consideration is needed. No firm timeframe for their release has been given.