Private Sector and Carbon? Is there an opening for Business and REDD? REDD or REDD plus? Is Business Needed in Forestry Emissions Management?

Transcription

1 REDD and the Private Sector An Opportunity for Sustainable Development Bogor, March 19 th 2010 Neil Franklin Sustainability Director Asia Pacific Resources International Ltd (APRIL) Private Sector and Carbon? Wh i B i i t t d i REDD? Why is Business interested in REDD? Is there an opening for Business and REDD? REDD or REDD plus? Is Business Needed in Forestry Emissions Management? 1

2 Sustainable Business Word Business Council for Sustainable Development Copenhagen Accord (CA) and REDD The CA defines only broad agreements on future strategy, however Forestry and REDD (previously ignored) is now confirmed as top of the agenda, and therefore Forestry inclusion i in future Global l Agreement is certain. Key Forestry mechanism highlighted in CA is REDD+ ~ accepted as critical climate mitigation measure to be actively facilitated by the parties under the Accord (point 6), with substantial finance to be provided by commitments of developed countries (point 8) and the Copenhagen Green Climate Fund (point 10). In fact, no other mitigation measure apart from REDD-plus are mentioned in the CA (e.g. carbon capture & storage), indicating new importance that is now placed on forestry. The REDD+ agreement was almost signed, only held back at last minute by disputes on wider climate negotiation points. Likely to be agreed in Bonn 2010 at earliest, and in Mexico December 2010 at latest. $3.5 billion pledged at COP15 to facilitate REDD-plus early action in developing countries (from US, UK, France, Japan, Australia & Norway) 2

3 REDD+ Provisions Relevant to Business Developing country Parties should, in accordance with the provisions contained in decision -/CP.15 (REDD-plus), contribute to mitigation actions in the forest sector by undertaking the following activities: (a) Reducing emissions from deforestation; (b) Reducing emissions from forest degradation; (c) Conservation of forest carbon stocks; (d) Sustainable management of forest; (e) Enhancement of forest carbon stocks; REDD-plus refers to policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries. Source: FCCC/AWGLCA/2009/L.7/Rev.1 (page 8) part (c) includes full forest carbon cycle, including soil and peat part (d) includes improved plantation management Commercial-in-confidence Indonesia s Climate Commitments Since Bali COP XIII, the President has taken strong leadership role in international climate talks, facilitating developing country support for a global agreement. Indonesia has pledged deep emissions cuts from forestry and energy: 26% by 2020 from Business As Usual (up to 41% with international support) 14 of 26% of cuts to be achieved from forestry sector We will change the status of our forests from that of a net emitter sector to a net [carbon] sink sector by 2030 President Susilo Bambang Yudhoyono Pittsburgh G20 Summit Indonesia strongly supports REDD+ to meet national emission targets. As a Non-Annex I country Indonesia will submit nationally appropriate mitigation actions to the secretariat by 31 Jan 2010, will establish national & sub-national reference levels for forestry emissions, and will allow international Monitoring, Reporting, Verification (MRV). National Commitments (NAMAs) Of 7 national commitments, first 3 relate to forests and forestry The role for private sector is clear within this national commitment 3

4 Indonesia says forestry plan can meet emission target Wed, Jan 6th, :13 pm / Reuters An ambitious Indonesian plan to plant millions of hectares of forest should allow the country to exceed its target of cutting greenhouse gas emissions by more than a quarter by 2020, the forestry minister said on Wednesday. Forestry Minister Zulkifli Hasan said the plan to add an extra million hectares (52.26 million acres) of forest by 2020 would turn the country from a net carbon emitter into a net carbon sink. Under the new plan, he said 500,000 hectares of new forest would be planted annually costing 2.5 trillion rupiah ($269 million) per year. An extra 300,000 hectares of degraded forest would be rehabilitated every year funded by government and money from Australia, Norway, Korea and the private sector. "And it all must be verified. That is in our best interest, so that in future, other countries can see it is transparent, open and will want to help," he said. President Susilo Bambang Yudhoyono has pledged to cut emissions by 26 percent from business as usual levels by 2020 or by 41 percent by 2020 if given sufficient international support. if planting proceeds, we can reach more than 26 percent," he said. "If we also eradicate illegal logging, then the 26 percent will be achieved entirely in the forestry and peat sector. Hasan said there were 130 m hectares of forest left but only 48 m hectares were in good condition.. Forest Land Under Ministry of Forestry Jurisdiction (Million Ha) Forest Cover Non-Forest Scrub Deficient Data (Cloud) Conservation Area Protected Forest Limited Production Forest Production Conversion Production Total Total % 23% 19% 26% 17% 100% Source: Departemen Kehutanan,

5 Challenges: Forest Fire Financial Costs to Indonesia of $25million/day. Burning is forbidden by Indonesian law. Riau province: 8,767 hotspots (NOAA, 2006). 56% of Riau s fire hotspots in peat land. Fire remains the cheapest way to clear land. Challenges: Forest Governance Teso Nilo, Riau Province: One of the world s highest biodiversity forests Strong NGO and private sector support Significant international funding Despite this, efforts to expand the Teso Nilo conservation area and protect the core National Park are failing against development trends and forest conversion to agriculture. 5

6 Responsible Plantation Management Managing forest assets, a core business commitment. What business assets can be leveraged in support of Carbon Emissions Mitigation? Mosaic Plantations Securing Forests, Capturing Carbon High Conservation Un productive Value Production Production Secondary Forest Forest Production Forest Protected by Mosaic Plantation Managed and Developed Managed and Developed Acacia Plantation Conservation Area Acacia Plantation Plantation forests 12 and mosaic landscape protect biodiversity; provide ecosystem service, and enhance community opportunities 6

7 High Conservation Value Forests (HCVF) Implemented in addition to MoF regulations on Micro and Macro Delineation Planted, Conservation, Community. Areas required to maintain significant social and ecological values Focus: Rare, endangered and indigenous species as well as key ecosystems. A guarantee for securing biodiversity & social values during concession development and onwards. Management and monitoring to ensure maintenance of values. Securing High Conservation Values Through Active Management Micro & macro delineation (mandatory) of licensed areas combined with HCV management planning. Over 200,000 Ha of natural forest have been setaside under active company protection. Some concessions have up to 60% of gross area allocated as conservation forests to maintain HCVs. 7

8 Integrating Plantations with Forest Protection Plantation buffer and protected boundaries Plantation buffer Teluk Meranti Village Water management zones Kerumutan Nature Reserve No plantation buffer and community encroachment APRIL Plantations: Contribution on the Provincial Scale APRIL manages over 200,000 hectares of natural forest conservation area; compared with the 970,000 hectares of gazetted protected areas in Riau province (Source: PERDA 1994) 8

9 Business Managing Carbon Business reasons for managing carbon Practical aspects of managing carbon Science basis for management of peatland carbon liabilities 17 APRIL Carbon Management Atmosphere Growth & Management Forests Recycling Decay and non-energy burning Harvest Roundwood Processing Products Energy Fossil fuel Biofuel Use Products in use Landfill Disposal Energy Carbon Process/ Stored Activity carbon Cradle to Gate Carbon Footprint shows our plantations absorb 15M tonnes CO2/year. Our mills transfer 3M tonnes CO2/year in products. Action Plan to identify options for improving our Carbon and Eco-Efficiency, both in pulp/paper manufacturing process and plantations. Independent carbon footprint to be published soon. 9

10 Research on Peatland and Carbon Management APRIL s Science Based Management Support Project Independent team from Delft Hydraulics and worldleading peatland, conservation and emissions experts US$ 1 Million; 3 year program, Eco-Hydrological and HCVF spatial planning to optimise plantations and minimise impact on conservation forests Develop SOPs for Responsible Peatland Management Eco-Hydro Management Water control for minimum impact conservation boundaries and reduced carbon emissions Controlled raising of water levels in Eco-Hydro buffer zone between planted and conservation areas Water control gates to optimise at 50-60cm in plantations, and 0-20cm in conserv. areas 10

11 Comparison of Eco-Hydrology Plantation Management against Business as Usual Trend Degraded forests exposed to external factors Managed Eco-hydrology Plantation Forest - Illegal logging Encroachment Uncontrolled drainag Forest tree die-back Forest & Land Fire = 60 ton/ha/year CO 2 emission No forest & land fire Productive acacia plantation Managed water level Hydrologic buffers Protected Conservation Areas = 45-55% avoided emissions Berdasarkan data: APRIL, Delft/SBMSP 2009; Swedish Env. Research Institute (IVL) Oct 2009 Eco-Hydrology Plantation Ring Avoided Emissions and Sustainable Development 22 11

12 Valuation of CO2 Avoided Emissions Avoided in APRIL plantations (US$75.6 million saved over 40 years) Avoided Avoided CO2 Conservation Total CO2e in Total i avoided Planted emissions in beyond legal additional Forest Management Area Area (ha) planted area requirement CO2e in conservati Unit (FMU) (ha) (Ton within FMU FMU on CO2e/year) (Ton (ha) (Ton CO2e/year) CO2e/year) Pelalawan East 19,893 7,765 69,900 6, , ,900 Canal (hydrology control) and conservation plan avoids CO2 emissions (CO2e): Total avoided emission CO2 from best peatland management practice is 377,900 Ton CO2 /year Over 40 years, without APRIL management, the total CO2 emissions from degrading peatland would be 15.1 million tonnes CO2 Contribution of 20K Ha concession to State for avoiding Greenhouse Gas is valued at current market price of US$5 /tco2e = US$75.6 million APRIL computer system for water management & CO2 monitoring in Pelalawan Company and Community Social responsibilities of private sector Land rights and social conflict resolution Ground rules for conflict resolution 24 12

13 Business and Social Responsibility Major employer in Riau, with company operations supporting the livelihood for 250,000 people 35 jobs per 100/ha of plantation. $1m/day paid to local workforce Community Development programs: - Integrated Farming System (80 villages; 3,000 families) - Micro Small Business Program (500 trained persons) - Community Fiber Farming 30,000 Ha (9,800 people in 32 villages) - Social & Infrastructure Program (education, religious, health clinics) - Vocational Training Program (565 trained persons) 25 Community Land Rights and Benefit Sharing Often state-owned Production Forest Land, contracted by Government to private company for plantation development, are claimed by communities. Free, Prior and Informed Consent principles are recognized as an ideal basis for land conflict resolution but CHALLENGING in application. Ongoing development of third party collaborative conflict resolution protocols. But Company and Community partnership and mutual understanding are key to future success of Indonesia s forestry sector Carbon revenue sharing with community based on partnerships and mutual consent. NF6 13

14 Slide 26 NF6 Neil Franklin, 10/02/2009

15 Practical Solutions Kampar Peninsular: Plantations to Secure Conservation Landscapes, Reduce Carbon Emissions and facilitate Community Leadership. Kampar Peninsular A case-study in forest management and carbon solutions Poor canal construction drainage of peat domes and subsidence. Illegal logging. Migration, settlement & land-clearing. Low benefit farming, poverty in community Exclusion cuso of tadto traditional a communities. Loss of biodiversity. Plantations implemented where hydrology is compromised. Kampar peninsular currently emitting 90 ton CO2 / ha / year. Total annual emissions (400,000 Ha) million ton CO2 / year. 14

16 Kampar Ring Plantation Integrated Landscape Management Planning Total concession area of approx. 56,000 Ha Plantations: ti 35,000 Ha Conservation: 15,000 Ha Community: 6,000 Ha 250,000 Ha of Deep Peat Swamp Forest protected within Plantation & Community Ring With Ring plantation and optimised water levels, current CO2 emissions can be reduced by 50% (or by 3 Million tons CO2/year). Estate Tasik Belat (North Ring) Estate Meranti (South Ring) Plantation Ring Plan Meranti Estate Hydro buffer (for minimal impact on adjacent natural forests) Production (with hydro management in canals) Livelihood zone (f Conservation (upstream deep peat) Livelihood zone (for community agriculture) Livelihood zone (for community agriculture) Hydro buffer (controlled and raised water levels) Indigenous trees (also functions as hydro buffer to river conservation areas) 15

17 Kampar Ring: Reduced Emissions from Deforestation and Degradation Avoided Emissions of 3 Million tons CO 2 /year with Ring REDD or Voluntary Market carbon credits up to US$15-20 Million /year Protective Ring of responsibly managed plantations Reduced emissions impact right across the landscape Poverty alleviation and direct participation by local communities Protection of ecosystems and biodiversity in core area Creation of several thousand additional jobs Prevention of illegal logging and opportunist settlers Collaborative management with stakeholders Business Considerations on REDD Business Considerations on REDD REDD supporting Environmental and Social Responsibilities 16

18 Business, REDD and Biodiversity Carbon assets leveraged to support operational costs of biodiversity and forest protection = Cost Saving for Business Biodiversity enhances Value to carbon project investors Audited progress ensures conservation effectiveness Long-term financing model promotes strategic planning on ecologically meaningful time scales. Business, REDD and Communities Potential carbon subsidies for Community plantations Engine for increased participation of communities in Forestry sector Equitable sharing of benefits Social development through subsidised education and healthcare Collaborative protection ti of assets Long-term financing models promote sustainable development Business technical expertise can assure project success. 17

19 REDD An Issue of Incentives Link REDD incentives with good forest governance and avoided emissions by all regional/local stakeholders Identify stakeholders and beneficiaries i i including: Government, foregone production revenues Communities, compensation for lost opportunities of responsible land-use, incentives against illegal logging and encroachment, alternative livelihoods Companies,, subsidies for operational costs of reducing emissions (hydro-management, fire prevention, HCV protection, CSR costs ) NGO and civil society groups, important role in providing technical assistance, oversight, transparency and monitoring. Challenges to REDD Moving Forward Too good to be true, seeing will be believing. Financial incentives must be applied at the grass-roots level, with no stakeholders excluded from the incentive framework Need pioneering pilot projects that test weaknesses in proposed national, regional and project-based REDD initiatives. Audit and monitoring systems must be transparent and credible Need for collaboration, integrating respective capacity of stakeholders The Business Case for REDD REDD as a framework for rewarding best practice and providing the g p p g business case for going beyond compliance Creating value from conservation, promoting sustainability Real benefit sharing for surrounding Communities. Private sector has key role to facilitate REDD, supporting investment & technical needs of forest management on landscape scale 18

20 Scaling-Up Sustainable Development as contribution of responsibly managed forests Business core competency, implementation on a meaningful scale. Pengelolaan Hutan Lestari sebagai Solusi untuk Menghadapi Perubahan Iklim Dalam jangka panjang, strategi t pengelolaan l hutan lestari bertujuan untuk memelihara atau meningkatkan cadangan karbon hutan, disamping menghasilkan hasil kayu tahunan yang lestari, serat atau energi dari hutan, akan menghasilkan keuntungan mitigasi terbesar yang terus-menerus. Sumber: IPCC Fourth Assessment Report. (kutipan bebas) 19

21 The Forests Dialogue 2009: Co-Benefits of Managed Forests Consensus position of 200 of the worlds forestry stakeholders (Govt, Private, NGO, Community) Forests have a unique ability to simultaneously reduce greenhouse gas emissions, capture carbon, & reduce the vulnerability of people and ecosystems to climate change. Sustainably managed forests support livelihoods of millions of rural people and deliver products, ecosystem services and biodiversity protection. Visi Pembangunan HTI Indonesia Sesuai dengan rencana strategis Indonesia untuk membangun 9 juta Ha (7% dari total luas hutan) menjadi HTI,maka sektor kehutanan bisa menyediakan: 2.1 Juta Ha hutan alam dalam area konservasi 2.3 Juta Ha lahan yang dikelola oleh masyarakat lokal untuk kesejahteraan setempat 4.6 Juta Ha hutan tanaman industri 161 Juta m3 serat kayu yang dipanen setiap tahunnya untuk konsumsi global 38 Juta Air Dry Tons (ADT) pulp setiap tahun yang akan menjadikan Indonesia sebagai produsen pulp nomor 2 terbesar di dunia Penurunan emisi karbon s/d 150 juta Ton CO2/tahun 20

22 Summary Business sees an opportunity in REDD with a Plus+ Opportunity could be for profit or stability (+profit) Base-line carbon emissions of forests and peatlands can be minimised through active management. Private sector can play a key role in facilitating successful Carbon Forestry through its technical resources and forest management capacity. Partnerships! Single Fighters won t succeed. REDD and Voluntary Carbon revenues can provide Missing Incentive for Community participation and benefit sharing in Forestry the Missing Link Innovative Pilot Projects are desperately needed. Isu Karbon Berkaitan dengan Persaingan Industri Pulp dan Kertas Global Pada tahun 2008/2009 Pemerintah Amerika Serikat, Eropa dan Kanada telah menerapkan kebijakan dan subsidi2 untuk perusahan pulp dan kertas. Kebijakan tersebut menggunakan isu Karbon untuk mendukung daya saing industri dalam negerinya. Kebijakan tersebut antara lain : 1. Pajak kredit US black liquor US$ per ADT pulp, total US$4 Miliard 2. Program Transformasi Hijau Kanada US$ per ADT, total C$1 Miliard 3. US Biomass Crop Assistance Program US$48 per ADT pulp, US$2.4 Miliard 21

23 Thank you 18 22