Actions to reduce forest loss contend with diverse drivers
Indonesia houses the largest tropical rainforest in Asia and is one of the most biodiverse countries in the world. However, since 2002 it has lost more than nine million hectares of its primary forests – an area the size of Portugal – to palm oil plantations, forest fires, small-scale agriculture, timber plantations, infrastructure, and mining. The large islands of Sumatra and Kalimantan have been particularly affected, with deforestation on these two islands alone accounting for almost 90 percent of national forest loss.
Nationally, palm oil plantations caused the largest portion of forest loss in 2001-16, driving 23 percent of deforestation. The next largest portion was from fires that caused the conversion of forests to grass/shrubland, responsible for 20 percent of deforestation nationwide. The impact of forest fires was especially strong in the years 2014-16, obscuring a reduction of deforestation driven by other causes (Figure 1). The year 2015 was particularly dry, which led to an unusually high number of forest fires. Timber plantations and smallholder agriculture were also significant drivers, each accounting for almost 15 percent of forest loss in the years 2001-16.
In 2017 and 2018, the rate of forest loss went down by more than 30 percent compared to the average annual loss rate over the reference period of 2001-16 (Figure 1). Regionally, the islands of Kalimantan and Sumatra experienced the largest drop in primary forest loss, with deforestation falling by 68 percent and 51 percent, respectively, from 2016 to 2017. A confluence of factors is responsible for a reduction in deforestation, including actions taken by the government, the private sector, and civil society organizations, as well as wetter weather conditions.
Figure 1. Annual primary forest loss area by disturbance 2001-2016, in million hectares
Source: Austin, K. G., Schwantes, A., Gu, Y., & Kasibhatla, P. S. (2019). What causes deforestation in Indonesia? Environmental Research Letters, 14(2), 024007; Hansen, M. C., Potapov, P. V., Moore, R., Hancher, M., Turubanova, S. A., Tyukavina, A. et al. (2013). Tree Cover Loss (Hansen/UMD/Google/USGS/NASA). Global Forest Watch database.
Government policies urge increased forest protection
The reduction in forest loss in the past two years coincides with governmental measures put in place in the wake of the forest fires of 2015, which cost the country an estimated USD 16 billion in lost land, economic disruption, and health costs for tens of millions of Indonesians. The fires led to new and enhanced regulations, the establishment of a Peatland Restoration Agency, and increased policy priority for fire prevention, law enforcement, and social forestry.
In 2016, the government issued a regulation permanently banning the issuance of new licenses on peatlands to better protect these ecosystems. Following the adoption of the peatland moratorium, the Ministry of Environment and Forestry formulated a number of regulations in support of its implementation. These regulations provide technical guidelines applicable to all private and public actors for peat management and ecosystem recovery. Awareness campaigns and preventative measures against the use of fire in land management intensified, as did law enforcement. The government also established a land-swap program in 2017, which allows companies that have concessions in protected peat areas – and are therefore no longer permitted to clear this land – to exchange their land for other government-provided areas. However, it remains to be seen whether the land-swap program will help to reduce deforestation as it is mired in implementation problems.
The Peatland Restoration Agency is tasked with coordinating the restoration and management of peatlands and has partnered with civil society organizations to achieve this mandate. The agency rewetted 200,000 hectares of peat in 2017 and put a further 460,000 hectares of peatlands under restoration efforts in 2018 – a total area the size of 800,000 soccer fields. The need to provide good air quality for athletes competing in the 2018 Asian Games may have provided additional motivation for such measures. However, the reduced risk of fire in peatlands cannot be attributed only to government action: the milder weather conditions of 2017 brought more rain, naturally reducing the risk of fires spreading. These factors combined led to the area of burned peatlands falling by more than 98 percent from 2015 to 2017.
Community forest management has also helped to protect forests. In 2014, the government adopted an ambitious target to allocate some 12.7 million hectares of forest land to marginalized communities under the Social Forestry Initiative, of which 2.7 million hectares have been assigned. The program aims to halt deforestation and resolve land tenure conflicts by putting forest management back in the hands of local communities. While there are signs the program can help to avoid deforestation, implementation progress remains slow. In some regions, the program has been associated with reduced deforestation but this varies across regions and contexts. There are also ongoing efforts to better map the location and area of smallholder plantations by the public sector and civil society, allowing better policy design and management of small-holder land.
However, forest loss driven by palm oil expansion and large-scale timber plantations was already declining from 2013, pre-dating the 2015 forest fires (Figure 1). This may be in part due to conservation interventions by the government and private sector in the palm oil and timber industries. The price of crude palm oil has also been steadily dropping over the past eight years, which could have a role to play in slowing palm oil expansion. Prior to the 2016 blanket ban on peatland conversion, the government had put a national moratorium on new license areas (concessions) for oil palm plantations, timber plantations, and logging activity on primary forests and peatlands in 2011, which protected about 55 percent of Indonesia’s peatlands. Since then, the moratorium has been extended several times, and the government plans to make it permanent. The government effected the moratorium in the context of a national strategy on reducing emissions from deforestation and forest degradation (REDD+), a USD one billion bilateral Co-operative Agreement with Norway signed in 2010, and the country’s intended national determined contribution (INDC).. The Co-operative Agreement with Norway has been slow to get going. The two countries have only recently agreed to proceed with a first payment, although the amount still needs to be agreed.
Demand-side policies can tackle illegal logging, but risk leakage
Stronger import regulations by the European Union (EU) – Indonesia’s second largest palm oil importer and a key timber trade partner – have also boosted action by both the government and private sector to address deforestation in timber and palm oil supply chains. Since 2016, Indonesia has exported only verified legal timber and timber products to the EU. Market pressure from the EU, improved forest governance, and law enforcement have likely made it harder for producers to expand production by clearing forests. For example, in 2014, Indonesia signed the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade with the EU. It outlines a range of measures for tackling illegal logging in exchange for the EU providing financial and technical support to do so. There remains, however, a risk of simply shifting palm oil supply to Indian and Chinese markets, where sustainability requirements are less stringent.
Similarly, sustainability interventions led by companies and civil society organizations in the palm oil sector in the form of zero-deforestation commitments and the Roundtable for Sustainable Palm Oil (RSPO), have scaled significantly. Today, 22 percent (7.8 Mt) of Indonesian palm oil and 11 percent (1.9 Mha) of palm oil plantations are RSPO certified. The RSPO standard includes several environmental and social requirements that avoid deforestation. A comparison of areas certified under RSPO and those not certified showed that certification reduced deforestation by 33 percent. Unfortunately though, demand for RSPO-certified palm oil is low, and half of it is sold as non-certified without the premium needed to cover the certification costs.
Certifications and corporate commitments support downward deforestation rates
Many palm oil companies have also adopted corporate zero-deforestation commitments, which have reached a significant market share, now covering approximately 86 percent of Indonesia’s palm oil exports. Although the impact of these commitments is not clear yet – and monitoring deforestation remains a challenge – if implemented effectively, they can avoid one fourth of possible deforestation. Civil society organizations have advocated for these measures, maintained pressure on the palm oil industry, and have supported the government, companies, and smallholders to build necessary capacities to avoid clearing forests.
In sum, there is clear evidence showing a sharp decline in loss of forest in Indonesia over the past two years, but linking this reduction to a specific set of factors is hard. Various measures taken over several years – including the country’s international commitments to reduce emissions, the bilateral Agreement with Norway, and the government’s reactionary measures to the fires of 2015, as well as private sector-led sustainability and zero-deforestation initiatives – have all contributed to bring forest loss under control. However, new wave of fires in July and August 2019 is putting the recent policies to the test. For Indonesia to maintain this downward trend in forest loss, the government, the private sector, and the civil society organizations need to strengthen these measures and build on them to end deforestation in the country.
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Banner photo: View of Danau Sentarum from Vega hill in Kapuas Hulu, Kalimantan Barat, Indonesia. Danau Sentarum is the biggest tidal lake in the world where the lake turns to be completely dry during dry season. Photo by Ramadian Bachtiar/CIFOR via Flickr