Don't Cry For Carbon In Kalimantan

Ahead of Prime Minister Kevin Rudd's visit to Indonesia this week, one of Australia’s prize climate change projects has fallen over.

A message on the AusAID website states that the $47 million Kalimantan Forests and Climate Partnership (KFCP) in Indonesia has come to a close, save a few minor program activities. The announcement proudly lists the program's achievements but neglects to mention its many unmet promises.

The KFCP began in 2008 as part of a larger $273 million climate change aid program to demonstrate that “forest carbon offsets” were a viable way to reduce carbon emissions.

The initial goals of the project was to protect 70,000 hectares of peat forests, re-flood 200,000 ha of dried peatland, and plant 100 million trees. The AusAID website states that only 2.6 million seedlings have been produced and makes no reference to trees successfully planted. The major work of re-wetting peatland through canal blocking has not been done.

The program sought to make a point about carbon pricing; it wasn’t a practical program to actually address deforestation and land degradation. Other aspects of this failed experiment are common to foreign organisations’ approaches to conservation in rural Indonesia.

The KFCP pilot project attracted ambitious statements from both major parties. Big claims were made about its capacity to demonstrate effective ways to reduce emissions from deforestation and land degradation in Indonesia, and to incentivise sustainable livelihoods for local communities.

In 2007 Malcolm Turnbull said: 

“[The KFCP] has the potential to reduce greenhouse gases by a greater amount than Australia’s total annual emissions.”

In 2007 Alexander Downer said the KFCP would be:

"[A] practical climate change action that could deliver immediate and tangible benefits.”

In 2009 Penny Wong stated;

“Not only is our Partnership with Indonesia making a practical contribution on REDD, but it is showing a new model of cooperation between developed and developing countries.”

But after five years of blundering, the main results AusAID can point to are monitoring and research activities, payments for participation, and the formation of a “forest management unit” that's developing a 35 year plan (without 35 years of future funding). Meanwhile, Kalimantan is rapidly expanding palm oil and coal production.

The KFCP is a missed opportunity. The need to rehabilitate land at the project site in Central Kalimantan is acute. Former Indonesian President Suharto ordered land to be cleared in 1996 for the (now defunct) Mega Rice project and the remaining peat deposits continue to burn regularly, creating smoke which significantly contributes to Indonesia's greenhouse gas emissions.

A key issue associated with deforestation is the lack of formal rights held by indigenous and rural people in Indonesia. The KFCP design document (p. 25) rightly acknowledges that land tenure is a “complex issue” in the project area, given the lack of clarity around both what land particular villages and individuals can claim, and also what rights attach to land claims. The destruction wrought by the Mega Rice project, alongside transmigration into the region and palm oil plantation encroachments onto community land adds additional complexity to these challenges.

The KFCP exacerbated conflicts about the status of land. Community concerns about the ways the project was implemented have been in circulation for some time. Yayasan Petak Danum (YPD), a Kalimantan indigenous organisation stated in 2011 that the project did not meaningfully engage the community. They expressed no confidence in project staff. The Forest Peoples Programme have also documented the issues.

Lack of community ownership of the project has caused problems. YPD have repeatedly asked the project staff to assist recognition of customary Ngaju Dayak knowledge in producing program activities but elicited limited response.

The program has been essentially outsourced to international organisations. Some community members have been active on social media reflecting on what went wrong. Norhadie Karben from Mentangai Hulu, a village in the KFCP, commented earlier this week on Facebook on the relationship between the KFCP failure and the history of international conservation organisations operating in the area:

"Since 2004, many international organisations are coming to the village to rehabilitate former Peat Land Development Project (PPLG 1 million hectares of agricultural land taken by New Order). The presence of the project in 2006 CKPP make people confused because since their presence they started to restrict access into the forest and land rights. In 2009 the KFCP reappeared in the local community creating conflict and confusion about the status of our land which is 120,000 hectares.”

The Central Kalimantan Peatlands Project (CKPP) Norhadie refers to was a previous insubstantial attempt at rehabilitating the degraded land. The CKPP was funded by the Netherlands. Staff employed to work on Australia’s KFCP are from many of the same environmental NGOs involved with CKPP. Little seems to have been learned from the previous attempt

The Australian KFCP is run by a consultancy firm, Aurecon-IDSS, who administer the Kalimantan project and run the entire “Indonesia-Australia Forest Carbon Partnership” office in Jakarta. They have then sub-contracted duties to CARE, Borneo Orangutan Survival (BOS) Mawas, Wetlands International and others (p. 44).

News of the project's demise is likely to be welcome when it filters through to all the communities in Kalimantan. In his reflections on Tuesday, Norhadie Karben concluded that “KFCP project should be stopped the sooner the better. Let us live in peace in our village".

This project has implications for Australian and international experimentation with carbon trading and carbon offsetting. The crux of the issue is whether a new class of carbon offset credits called “REDD+” would be instituted in the United Nations climate change regime.

The REDD+ reductions — for Reducing Emissions from Deforestation and Forest Degradation — are a controversial form of carbon abatement. Ideally it involves payments for conservation activities that reduce emissions, but as the KFCP demonstrates, rents to communities are filtered in different combinations through state, corporate, and NGO channels. The money does not always trickle down; in 2012 there was a report of alleged corruption at the site associated with payments for program activities.

The research on carbon and other “payment for ecosystem services” schemes suggests that they do not guarantee global emissions reductions, nor do they tackle administrative and structural reforms necessary to halt deforestation.

A point of contention is whether these programs should generate carbon offset credits for sale in carbon markets like Australia’s. In 2008, the Rudd and Yudhoyono signed the Indonesia-Australia Forest Carbon Partnership and stated:

"Our Governments’ ultimate aim is to ensure that future international carbon markets provide incentives for reducing emissions from deforestation and forest degradation, and that both Indonesia and Australia have in place the policies and technical capacities needed to participate fully in these markets.”

Friends of the Earth groups have taken issue with the political use of aid money to boost the carbon market agenda. The 2007-2012 “Australia-Indonesia Roadmap for Access to Carbon Markets” planned Indonesia’s participation in the voluntary carbon market. Indonesia would then be integrated into the compliance regime that would replace the Kyoto Protocol. Carbon credits from the KFCP were listed as a potential part of this plan from 2010, fbut like many other aspects of the project, they have not eventuated. Australia and Indonesia presented the KFCP program to the UNFCCC in 2008 as a model project when they expressed their preference for a market approach to REDD+.

However a range of issues have slowed the planned extension of carbon markets to REDD+. They include: ongoing divisions in UN REDD+ negotiations, problems in other trial REDD+ programs, and a host of regulatory issues.

Despite this, the 2012 submission from Australia continues making the case for carbon trading and offsets. Australia states:

“When well-tailored to domestic circumstances, MBAs [market based approaches to climate policy]facilitate low-cost, effective abatement to help countries commit to, and achieve, ambitious mitigation objectives consistent with the global goal. By contributing to global emissions reductions, MBAs help the most vulnerable developing countries that are least able to cope with climate change.”

There are clearly concrete lessons to be learnt from the KFCP that might amend the Australian government’s hopeful outlook on carbon markets.

Well-tailored programs are crucial. Continuing the experiment with carbon pricing is not. The KFCP is a failed trial in carbon pricing and has caused plenty of grief for local communities. It illustrates ongoing troubles in forest carbon schemes dedicated to this model.