[Updated 16/7/09: Added detail on revenue share by forest type]Indonesia has released rules governing revenue sharing for carbon market payments in the preservation of its forests. Under the rules, up to 50 per cent of all carbon credit revenues envisaged would go to various levels of government and as little as 20 per cent given to forest communities.
Reduced Emissions from Deforestation and Degradation (
REDD) is an international system being set up to enable developing countries and their forest communities to be paid to preserve their forests instead of clear them. Deforestation is occurring at a rate of 13 million hectares a year globally, mainly in tropical rainforest in poor countries, and contributing up to 20 per cent of the world’s greenhouse emissions.
The development of a REDD financial mechanism is being led by the United Nations and would see rich countries pay forest nations for forest preservation and earn carbon offset credits in return to go towards their own emissions reduction targets. However, designing such a scheme is being held back by questions over land tenure, the rights of forest dwellers and users, how REDD carbon revenues should be shared, and how to avoid corruption compromising the process.
The Indonesian government’s forestry department earlier this year released rules over the eligibility of projects and now the finance ministry has issued the revenue-share guidelines. Between 10 and 50 per cent of the profits from REDD projects would go to the various layers of Indonesian government. The amount would be split 20 per cent to the provincial government, 40 per cent to the local government and 40 per cent to the central government in Jakarta.
Revenue going to local communities would be between 20 and 70 per cent of the overall profits, distributed via a trust fund. Project developers would receive 20 to 60 per cent. The type of forest being preserved is the main factor determining the revenue share ratio applies.
There are 11 categories in all of forest types outlined. Three leading examples are as follows: ‘Indigenous forest’ preservation projects would see 10 per cent of revenue go to government, 70 per cent to communities and 20 per cent to developers. The respective shares for ‘community forest’ are 20 per cent, 50 per cent, 30 per cent and for ‘protected forest’ 50 per cent, 20 per cent, 30 per cent.
REDD carbon credits for leaving forests standing are estimated in the range of $US3 to $US10 per tonne of carbon emissions avoided. One REDD project developer told Reuters the rules looked sound. But environment and aid groups, which say large proportions should go to local people, are likely to question the revenue share ratios.
Indonesia is the most advanced of the tropical rainforest nations in formulating national rules for REDD, and is being closely watched by other developing nations, green groups and forest organisations.
Reuters 10/7/09, Mongabay.com 13/7/09