Borneo Project Aims to Save Forest, Boost Livelihood

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.


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.


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.”


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


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.



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.


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.


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


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.


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

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