SINGAPORE (Reuters) – An Indonesian firm hopes to save an area three
times the size of Singapore from logging, by enticing locals to protect
the forest while potentially earning itself millions from selling
carbon credits.
The key to the Katingan peat conservation
project is the value of the carbon stored in the plants and the vast
amount of planet-warming carbon locked away in the peat underground.
The
oval-shaped 217,000 ha (542,500 acre) project nestles between two
rivers in central Kalimantan on Borneo island, which has already lost
about half its forest cover to logging for timber, clearing for palm
oil plantations and mining.
But Jakarta-based PT Rimba Makmur
Utama is betting on a global market in selling carbon offsets to
investors seeking projects that preserve and rehabilitate forests,
which lock away carbon dioxide in the fight against climate change.
Each
offset represents a tonne of CO2-equivalent kept from being emitted and
forests are among the world’s top carbon “sinks” if left intact, acting
like lungs for the atmosphere.
“I’m not going to be a hypocrite
by saying this is not for the money but we have to be patient,” said
Dharsono Hartono, PT RMU’s president director, and a former investment
banker. “It’s not going to make money right away.”
Project
planning began two years ago and has attracted funding from the Clinton
Climate Initiative and the Norwegian Agency for Development
Cooperation, or NORAD, he added.
A key challenge was determining
future demand for forest carbon offsets. The United States and
Australia have yet to pass domestic carbon trading laws but both, if
approved, could ignite annual demand for hundreds of millions of tonnes
of offsets from forest preservation projects priced from $5 to $10 a
tonne.
The United Nations hopes a global scheme it supports,
called reducing emissions from deforestation and degradation, or REDD,
will be part of an expanded global pact to fight climate change from
2013. REDD aims to reward developing countries for saving forests
through the sale of carbon credits to rich nations.
CARBON RIGHTS
The
Katingan project is one of more than a dozen REDD investments in
Indonesia at various stages of development hoping a multi-billion
dollar market in forest offsets will take off.
The Katingan site
is different because most of it sits on a dome of peat. Emissions from
degraded or burned peat land make up nearly half of Indonesia’s
greenhouse gas emissions. The site also has the world’s sixth largest
population of orangutans as well as rare clouded leopards.
The
project has a provisional site licence and hopes to get a formal full
60-year ecosystem restoration licence by March, said project consultant
Rezal Kusumaatmadja of Bali-based Starling Resources.
Such a
licence carries the right to the forest’s carbon stock but bans tree
cutting, requiring the investor to replant degraded areas and dam
drainage canals to restore the water table.
About a third of the site’s peat swamp forest has already been logged, although more than half is still pristine.
Kusumaatmadja
said the project covered long-term monitoring of the site’s carbon
stock via 400 sampling plots of 50 m by 40 m. A large plant nursery
would be needed to revegetate cleared or degraded areas, with dams
being built, rangers employed and community development programmes
created.
The project did not envisage keeping out the roughly
100,000 surrounding villagers, while about 20 percent of the revenue
from carbon credit sales is earmarked for local communities, with
rattan harvesting encouraged to help supplement their incomes.
Hartono
hopes to sell the first carbon offsets in 2011 once the project is
verified by two bodies, the Voluntary Carbon Standard and the Climate,
Community and Biodiversity Alliance.
He could not say how many
carbon offsets might be sold each year, but hoped they would be several
million each year over the project’s 30-year life. But this depended on
further studies.
Carbon stock measurements show about 170
million tonnes of CO2-equivalent locked above ground in the site’s
trees and shrubs. Peat land can contain 5 to 6 times the amount of CO2
underground, giving sites like Katingan a high potential value.
Source : The Star
