Saturday, 11 July 2009

Indonesia Issues First Forest-Carbon Revenue Rules

Personal note: As I have said before, the Indonesian government will see this as a money raising scheme (scam) for them to extract ever more money from overseas governments and companies. If the past is anything to go by, the money will not reach its intended targets or do any good.


Indonesia Issues First Forest-Carbon Revenue Rules

Source: Reuters - July 10, 2009
By Sunanda Creagh

JAKARTA - Indonesia's forestry ministry has released what are believed to be the world's first set of revenue sharing rules governing forest carbon projects, a ministry official said on Friday. The profit-sharing rules will help clear up important questions over Indonesia's release in May of the world's first set of formal regulations on a U.N.-backed scheme called reducing emissions from deforestation and degradation, or REDD.

The rules in May governed who could carry out a REDD project and in which type of forest. The revenue sharing rules were expected to take up to six months and heavily involve the Finance Ministry. "Yes, this is the distribution of the profits," said forestry ministry spokesman Masyhud who, like many Indonesians, goes by one name. "We released this regulation to avoid a long, bureaucratic process."

Under the revenue sharing rules -- which can be read in Bahasa Indonesia here -- between 10 and 50 percent of the profits from REDD projects will be taken by the Indonesian government, depending on the type of forest. Of that portion, 20 percent will go to the provincial government, 40 percent to the regency government and 40 percent to the central government in Jakarta. Between 20 and 70 percent will go to local communities.

"This is the first time, in black and white, there has been a realistic indication of revenue sharing," said Tobias Garritt, CEO of Emerald Planet Indonesia, which is jointly developing REDD projects on 250,000 hectares (625,000 acres) of forest in Papua, eastern Indonesia. "This appears to be a well put together regulation that would provide some certainty to the market." He said the money for local communities would be disbursed through a trust fund.

However, it remains unclear why the regulation was issued by the Forestry Ministry and not the Finance Ministry. "We are currently trying to find an answer to that question," said Noeroso L. Wahyudi, a senior Finance Ministry official originally tasked with drafting the revenue sharing regulations. Deforestation is responsible for nearly 20 percent of mankind's greenhouse gas emissions and the United Nations has backed REDD as a way to put a price on those emissions to try to curb forest destruction.

The scheme, if formally included in a broader U.N. climate pact to be negotiated at a major conference at the end of the year, could potentially unlock billions of dollars in annual revenues for developing nations. The money would come from the sale of U.N.-backed carbon credits, with each credit representing a tonne of carbon-dioxide locked away by a forest as it grows.

But green groups say the key to the scheme's success hinges on a large portion of the money going to local communities to help them develop alternative livelihoods to ensure the forests stay standing over many decades. (Editing by David Fogarty)