They Seem Too Good To Be True — And They Are

A group of farmers and fishermen gather on the shore of Teluk Meranti to discuss what their plan of action will be if the loggers come back. The forest and sea have sustained their sleepy village tucked away on the Kampar Peninsula on Indonesia’s lush Sumatra Island for generations. But now their 800-family community is divided — half are fighting one of the world’s biggest pulp and paper companies to keep their forest, the other half are ready to do a deal and let their forest go.

Their dilemma made international news last month when police detained scores of activists from environmental group Greenpeace protesting against Riau Andalan Pulp and Paper (RAPP), which has a concession to convert a large part of Kampar Peninsula’s peatland into acacia plantations.

Several foreign activists and two journalists were deported from Kampar, where Greenpeace had set up a "Climate Defenders’ Camp".

The intense campaign pushed the Indonesian Government to review the concession and suspend operations by RAPP, which is the main subsidiary of Singapore-based paper giant Asia Pacific Resources International Holdings Limited (APRIL).

Teluk Meranti, which until a few months ago rarely saw strangers passing through, has recently welcomed loggers, a UN representative, the US ambassador, environmental activists and a constant stream of journalists.

A growing number of residents now know that the outside world values its carbon-rich land, and they know that their way of life is being discussed at Copenhagen. A few even understand what the Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD) scheme is — and they know that any decision on REDD could determine how they make a living in the future.

Under the REDD scheme — a final agreement on which will be made at Copenhagen — developed countries will pay developing nations like Indonesia to protect their forests. Businesses in the developed world that emit greenhouse gases above a set limit will be able to offset their emissions by buying REDD credits with money that will go to UN-approved projects in developing countries. 

REDD has been the belle of the ball at Copenhagen (although it did take a blow on the weekend when a clause outlining reduction targets for deforestation and forest degradation was omitted from the draft agreement). Developed and developing countries alike have shown their support for REDD because it offers the rich a way to keep polluting at high levels and the poor a way to profit from that.

Last week President Barack Obama endorsed a REDD model designed by Norway and Brazil.

But one only needs to look at Indonesia to see how REDD could go horribly wrong. If the REDD scheme is implemented as it is drafted, companies could actually make money from clearing forest, corrupt officials would likely siphon REDD funds, and the carbon price on the market could fluctuate wildly.

The REDD scheme was originally adopted at the Bali climate conference in 2007. The scheme was later extended to include sustainable forest projects, rather than protection projects, meaning sustainable commercial plantations are eligible to sell REDD credits.

"So plantations could get international climate funding instead of forests," said Suzanne Kröger, forests campaigner for Greenpeace Netherlands. "Forests will keep being cleared and converted into plantations with international climate funding. That is a very big concern for us."

RAPP says its proposed plantation in Teluk Meranti would be sustainable and worthy of REDD credits.

"We’re actually reducing carbon emissions by between 45 and 55 per cent in this area," said APRIL Sustainability Director Neil Franklin. "We are already reducing a lot of the carbon emitted through degradation, illegal canals and small fires. People were illegally logging here for years."

But Daniel Murdiyarso, a climatologist at the Centre for International Forestry Research in Indonesia, said that if all 27 million hectares of peat swamp in Southeast Asia were cleared, it would take 600 years to compensate for the emissions. This is true, he said, even if the land was replaced with plantations.

Before its suspension, RAPP was trying to win over Teluk Meranti residents by offering community development programs, medical clinics and even free Islamic circumcisions for young boys.

Officially, RAPP needs community consent before beginning its project — but it is common practice in Indonesia for companies to begin development once the government has issued a permit, even if the community has not given its consent.

Teluk Meranti is just a small part of the 400,000-hectare peninsula, made up mostly of peat swamp. The peninsula is one of the largest peat sites in the world. Peat is a dense substance formed of organic matter over thousands of years that stores large amounts of carbon — Kampar’s forests alone hold around 2 billion tonnes. When peat is burned — a common land-clearing technique in Indonesia — huge amounts of carbon are released into the atmosphere. Malaysia constantly complains about its neighbour’s thick haze of pollution which travels to them across the sea.

Indonesia is home to around 10 per cent of the world’s tropical rainforest, and deforestation has made it the third-biggest emitter of greenhouse gases, with 80 per cent of emissions resulting from deforestation and forest degradation.

Greenpeace called on the Indonesian Government last week to declare a moratorium on the destruction of rainforest and peatland until a sound scheme is devised.

The Centre for International Forestry Research is advocating for a REDD agreement in Copenhagen, but Murdiyarso says projects need to offer equal benefits to all parties able to participate. Residents of Teluk Meranti are worried that if government officials get involved in REDD projects on their land, the community will see few financial benefits.

Transparency International pegs Indonesia as the 44th most corrupt nation of the 180 it lists, putting the nation on par with Uganda and Honduras. The Indonesian Forestry Ministry is regarded as deeply corrupt, and a number of forestry officials have been investigated for accepting bribes to allow illegal logging to continue. Some officials have been jailed for it.

"When the government sends us a buffalo, by the time it gets here, all that is left is the tail," said Muhamad Nasir, a Teluk Meranti farmer. "We do not trust the government and we do not want money to come to us through them."

Further destabilising the concept of REDD is its market-based model. Critics say the current model would expose the carbon price to volatile forces outside the carbon market. Greenpeace is advocating for an international REDD fund, as opposed to a market model, to be monitored by the UNFCCC.

"A market-based approach would mean REDD credits flood and disrupt the carbon market, and we fear that in the end the forest won’t get the money it needs," Greenpeace’s Kröger said.

French sustainable development organisation IDDRI said in a 2008 report that the carbon price in a market-based model would not necessarily reflect the opportunity cost of an oil palm plantation in Indonesia, making protecting forests less profitable than clearing them.

Renewable energy is also included in the carbon market, meaning that industry stands to lose money if REDD credits flood the market and the carbon price drops.

"In the end, it will not provide a stimulus to invest in sustainable energy," Kröger said.

Supporters of the market-based system, however, say that public aid is always less effective than models that offer financial incentives for the private sector.

The residents fighting for their forest in Teluk Meranti do not care how the scheme is funded. In fact, they say they do not really need the REDD scheme at all. They just want to keep their land. "My father was a farmer and his father before him was a farmer," Nasir said. "We know how to protect our forest, but no one has even asked us for our ideas."