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Spreading the word on better land-use planning for Indonesia’s commodities


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Photo: Sustainable land-use planning needs coordination. Aulia Erlangga/CIFOR
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By Sophia Gnych

Workshops can be useful to improve collaboration on land-use planning. Photo: Mokhammad Edliadi/CIFOR
Workshops can be useful to improve collaboration on land-use planning. Photo: Mokhammad Edliadi/CIFOR

In April 2016, scientists from the Value Chains Finance and Investment (VFI) theme of the Center for International Forestry Research (CIFOR) held a workshop on Strengthening the supply base for key Indonesian commodities through landscape level land-use-planning and resource management, in partnership with the Indonesian Coordinating Ministry of Economic Affairs. The workshop in Jakarta was related to a major USAID-funded program on Governing Oil palm Landscapes for Sustainability (GOLS) and is part of the CGIAR Research Program on Forests, Trees and Agroforestry. Sophia Gnych, a research and engagement specialist with CIFOR, explains the outcomes.

Sometimes, scientist may overlook outreach and engagement with policy makers and practitioners in favor of an interesting research question.

But targeted outreach and engagement play a key role in scientific research too. If researchers understand better what policy makers think and what they don’t know, this too can lead to interesting questions and opportunities to make an impact through research.

This is why workshops bringing together scientists with government and other actors in a country are a useful instrument of outreach for everyone involved.

The recent workshop Strengthening the supply base for key Indonesian commodities through landscape level land-use-planning and resource management, brought together representatives of the Indonesian ministries of Agriculture, of Forestry and Environment and of Land-use planning; the financial services regulator (OJK); the president’s office; as well as industry associations and non-governmental organizations.

Read: Breaking the link between environmental degradation and oil palm expansion: a method for enabling sustainable oil palm expansion
Read: Breaking the link between environmental degradation and oil palm expansion: a method for enabling sustainable oil palm expansion

Participants found, first and foremost, that collaboration and coordination between sectors and ministries is very weak in Indonesia, both in terms of the process design and the incentives in place to ensure collaboration happens. This jeopardizes successful planning at the landscape level, and improvements are, therefore, a priority. There is great potential for the Coordinating Ministry of Economic Affairs to take the lead on improving collaborative processes so that alignment of policies and regulation, data collection, conflict mediation, and land-use planning can be achieved.

The second challenge is that the lack of consensus between ministries allows for numerous policies and regulations to go unenforced. So despite the existence of government interventions that support sustainable production and land use, very little seems to be implemented on the ground.

Thirdly, there is a need for greater transparency and nuanced understanding of commodity production and industry development in rural areas. This calls for synchronizing and strengthening of data collection. There is a need to both centralize and decentralize data recording and analysis so national and sub-national governments are able to make informed decisions.

Data collection should go beyond conventional data sets and look at issues of decision making among stakeholders to better understand the necessary incentives to change practices on the ground. Other peripheral stakeholders and local level markets such as informal traders and credit providers must be examined.

This work could be coordinated by the national statistics agency (BPS) but carried out in collaboration with universities and research institutes around the country. Such an approach would secure buy-in from civil society and academic organizations, and actors in the regions where change is needed would better understand necessities and feel ownership of the process.

Photo: Sustainable land-use planning needs coordination. Aulia Erlangga/CIFOR
Photo: Sustainable land-use planning needs coordination. Aulia Erlangga/CIFOR

Of course, dramatic changes in government processes require strong direction from the central government and political will across ministries. So clear incentives should be put in place for the government itself: both carrots and sticks. Participants identified the Ministry of Home Affairs as clear figure-head to lead the provinces and districts. The Ministry of Agriculture was also asked to provide greater insight into how it will address emerging challenges related to commodity production, markets and the negative consequences of land-use change, such as fire and haze.

These changes don’t necessarily require new policies or regulations, but clearer methods for implementation, as well as market and public based incentives, disincentives and enforcement. The judiciary may also have a key role to play, therefore, in resolving disputes on land and investments.

The government should look at creating tariffs for farmers and businesses to ensure that sustainable production is competitive against unsustainable production. Fiscal and political incentives should motivate government actors to clarify land tenure and legality of operations through transparent and equitable processes.

Local stakeholders will need to be eased into new ways of doing things by training them and showing them tangible benefits combined with manageable trade-offs. It is essential that all stakeholders understand the bigger picture and the future development plan and are convinced of it, particularly communities and local level government.

Building on this workshop, CIFOR wants to further deepen its relationship with the government and to conduct additional workshops at the sub-national level, together with the Coordinating Ministry.

Also read: 

The Investment Case: Financing smallholders for sustainable commodity supply


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  • Climate meeting in Bonn: Countries are overlooking how the private sector can help reach national climate goals

Climate meeting in Bonn: Countries are overlooking how the private sector can help reach national climate goals


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Measuring diameter of breast height as one of parameters for estimating carbon stock. Mangrove forests together with peat swamp forests are one of the largest carbon stock holding ecosystems. Photo: Daniel Murdiyarso/CIFOR
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Originally published at CIFOR’s Forests News

Measuring diameter of breast height as one of parameters for estimating carbon stock. Mangrove forests together with peat swamp forests are one of the largest carbon stock holding ecosystems. Photo: Daniel Murdiyarso/CIFOR
Measuring diameter of breast height as one of parameters for estimating carbon stock. Mangrove forests together with peat swamp forests are one of the largest carbon stock holding ecosystems. Photo: Daniel Murdiyarso/CIFOR

Research on climate change makes up a big part of the CGIAR Research Program on Forests, Trees and Agroforestry. On the occasion of the SBSTA in Bonn, Stephen Lawry, Director Forests & Governance Research at the Center for International Forestry Research (CIFOR), explains how seven Asian countries’ should not overlook how private sector contributions could help their plans to finance climate mitigation through land use. The 44th meeting of the UNFCCC Subsidiary Body for Scientific and Technological Advice (SBSTA) takes place in Bonn, Germany, from 16-26 May 2016.

The Paris Agreement was built on countries’ Intended Nationally Determined Contributions (INDCs) – national roadmaps towards limiting global warming to 1.5°C. In Asia, preventing emissions from land use change is the clearest path to delivering on national commitments.

Major private sector actors, in response to pressure from consumers and civil society, are taking the lead in the region. Dozens of companies are making efforts to meet zero deforestation and sustainable palm oil targets. And many banks are reassessing the risks associated with investments that don’t meet certain social and environmental standards.

Seems like the perfect solution for countries faced with the challenge of meeting climate mitigation targets on limited finances.

But a new report that looked at the INDCs of seven countries in Asia found that most neglected to acknowledge the potential of the private sector to contribute to national climate targets related to mitigation through land use.

HIGH POTENTIAL

Agriculture, forestry and other land use (AFOLU) represents 20–24% of global greenhouse gas (GHG) emissions. Deforested lands used for pastoral farming. Napo Province, Ecuador. Photo: Thomas Munita/CIFOR
Agriculture, forestry and other land use (AFOLU) represents 20–24% of global greenhouse gas (GHG) emissions. Deforested lands used for pastoral farming. Napo Province, Ecuador. Photo: Thomas Munita/CIFOR

Agriculture, forestry and other land use (AFOLU) represents 20–24% of global greenhouse gas (GHG) emissions. The Paris Agreement formally recognizes the role of the AFOLU sector in climate change mitigation and states that all Parties should take action to conserve and enhance GHG sinks and reservoirs.

Because the region accounts for largest proportion of global AFOLU emissions, Asia has the highest potential for both technical and economic mitigation by harnessing cost-effective emission reductions in the AFOLU sector.

If you consider all technically feasible ways to reduce these emissions, across all GHG gases, between 550 and 1,300 million tons of CO2 equivalent could be saved each year by 2030. The Asian region provides almost all of the global mitigation potential for rice cultivation, including the largest potential for restoration of organic soils (due to cultivated Southeast Asian peats).

Therefore, in Asia, if you’re not focusing climate mitigation efforts on AFOLU, you’re not addressing climate change. And if you’re not focusing on the role of private sector, you’re overlooking what may be the single most important source finance and capacity to meet national mitigation and adaptation targets.

HIGH COST

Between now and 2030, INDCs will evolve into Nationally Determined Contributions, which will need to be updated – and improved – every five years. This process gives countries the opportunity to detail their need for financing and to gain access to continuously evolving global climate finance.

Given the scale of investment required and the diversity of financial services and products needed (long-term investments, small scale credit, insurance, etc.), it’s clear that both private and public finance will be needed.

More and more, private lenders are requiring borrowers to subscribe to higher environmental, social and governance standards as conditions for receiving loan finance. So, private finance can be a critical source of capital for funding agricultural projects that support the achievement of national climate goals.

Yet most countries fail to make that link in their INDCs.

MISSING THE MARK

The study analyzed how low emission development strategies (LEDS) for AFOLU are included in INDCs and national development plans and strategies in Bangladesh, Cambodia, India, Indonesia, Lao PDR, Thailand and Vietnam. The countries were selected because they represent a variety of AFOLU emission profiles and development priorities.

My contribution to the report focused on analyzing how the INDCs propose to finance implementation of national climate mitigation and adaptation goals, particularly in the AFOLU sector.

Most INDCs cite the need for international support in the form of finance, technology and capacity building. Some countries provide estimated costs and the level of support required.

But none make note of the potential contributions from private companies that have made commitments in recent years to reduce emissions associated with large-scale production, trade and manufacturing of timber and agricultural commodities. Where the role of the private sector is mentioned in INDCs, no concrete measures to leverage its potential are given.

Significantly, the INDCs do not consider the growing trend of financial service providers to finance AFOLU investments that mitigate GHG emissions – potentially at very large scale.

To date, major global banks have been leaders in environment, social, governance (ESG) lending. But until recently companies that were unwilling to take up ESG standards could simply turn to domestic banks for loans, often at competitive rates.

Lately, however, Singapore and Indonesian financial sector regulators have started ensuring that their national commercial banks apply ESG lending standards to projects they finance, with a particular focus on the AFOLU sector. And, as an incentive, HSBC now offers discounted finance for RSPO-certified palm oil.

If successfully implemented, these measures could significantly reduce GHG emissions from the land use sector.

In summary, our study shows there is a limited understanding of private sector leadership in this area. Private sector finance and private companies’ commitments to produce commodities sustainably can contribute significantly to national commitments. Acknowledging the ways in which markets are driving changes in company behavior is a first step toward bridging the gap between national and private sector commitments. 


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  • Dynamics of Land Use/Cover Change and Carbon Emission in Buol District, Indonesia

Dynamics of Land Use/Cover Change and Carbon Emission in Buol District, Indonesia


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World Agroforestry Centre (ICRAF) Southeast Asia Regional Program 2015


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