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Background BENEFIT SHARING of REDD+ INDONESIA

Deden Djaenudin Pusat Litbang Perubahan Iklim dan Kebijakan Badan Litbang Kehutanan Kementerian Kehutanan
Cancun Agreement : compensation from developed

Presented on Indonesia REDD+ Preparedness for Tropical Forest Management Bogor, September 17, 2012

countries to developing countries should be long-term financing In conserving forest resources Incentive or benefit sharing mechanisms is needed as a strategic infrastructure for REDD+ implementation Benefit sharing is the mechanism used for distribution the benefits to beneficiaries based on their roles and responsibilities It will need a supporting regulations for REDD+ benefit sharing

Framework for REDD+ implementation

REDD+ related regulations

No 1 Regulations No 4 / 2005 No 2 / 2007 title Presidential regulations Combating illegal logging in forest area in Indonesia Acceleration of rehabilitation and revitalisation of peat land development in Central Kalimantan Moratorium of new licence and forest governance improvement in natural forest and peat forest

REL/RL FMS-MRV

Stranas/ NAP

Market/ Fund: Distribution

SIS

Governance:Performance, low leakage, etc

10/2011

REDD+ related regulations

No Regulations 4 5 6 Permenhut Nomor P.68/ Menhut-II/2008 Permenhut No. P.30/ MenhutII/2009 Permenhut No. 36/MenhutII/2009 title Ministerial regulations Demonstration activities of REDD Procedure of REDD Procedure of permission of Carbon stock and sequestration utilization in production forest and protected forest Impelementation of Forest Carbon

Incentives REDD+
The benefits of REDD+ activities in the form of financial

support or technology transfer or capacity building (Permenhut No. 30/2009) right beneficiaries the form of incentive is depend on the needs of stakeholders

Permenhut No.20/MenhutII/2012

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Incentives that can be applied (Wollenberg and Baginski, 2009):

Incentives for business permit holders utilization of timber to

Significant Development
implement RIL illegal logging sequestration

Various benefit sharing schemes

Transfer Fiscal General Services Agency (BLU) Credit for Farmers (KUT ) Trust Fund Payment for Environmental Services (PES) National Program of Community Empowerment (PNPM)

Incentives for agriculture or plantations in degraded lands Increase in social welfare programs to reduce encroachment and Payments for environmental services, especially to increase carbon

Alternative forms of incentives for soil and water conservation,

i.e:

property rights, livelihood incentives, market measures, financial measures, fiscal measures

Fiscal Transfer
INTERNATIONAL ENTITIES NATIONAL REDD+ TASK FORCE CENTRAL GOVERNMENT PROVINCIAL WORKING GROUP DISTRICT WORKING GROUP Gross Incentive of REDD+ (National) Gross Incentive of REDD+ (National)

Incentive mechanism: trust fund

Indonesian Climate Change Trust Fund (ICCTF)

Advisory Council
Netto Incentive of REDD+ (National) Ownership Activities PORTION FOR CENTRAL GOVT STAKEHOLDERS TAX on services produces

Trust Fund Institution

Activities PORTION FOR PROVINCE GOVT STAKEHOLDERS PORTION FOR PORTION FOR PORTION FOR DISTRICT GOVT DISTRICT GOVT DISTRICT GOVT STAKEHOLDERS STAKEHOLDERS STAKEHOLDERS

Joint Working Group: Nasional Propinsi Kabupaten

Beneficiaries

Based on performance, Performance based As stated in the MRV report (MRV result)

Distribution mechanism: market-based

1.
National Govt.
Revenue from REDD+

Proportion determination
Guarantee fund of national REDD CER levies Purchase on CER

Buyer
Buyer
CER

2.

Permenhut No. 36/2009 Value chain approach

Levies on sold CER

Sub national Govt.: 1. Province 2. Districts Community Provider

CER

National Govt.

Sub national govt. : 1. Province 2. Districts

Provider
REDD permit in free forest area

Community

a. Voluntary market

b. compliance market

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Based on Permenhut 36/2009

No 1 2 3 4 5 6 7 8 9 10 11 Permit Holder/Proponent IUPHHK-HA IUPHHK-HT IUPHHK-RE IUPHHK-HTR Hutan Rakyat Hutan Kemasyarakatan Hutan Adat Hutan Desa KPH KHDTK Hutan Lindung Distribution (%) Government 20 20 20 20 10 20 10 20 30 50 50 Community 20 20 20 50 70 50 70 50 20 20 20 Developer 60 60 60 30 20 30 20 30 50 30 30

Based on value chain

Berau (25 th, i=12% ,BCR=1) NPV Total Proportion (IDR/ha) (%) 93,715,844 97.45 270,592 0.28 1,517,560 1.58 330,280 0.34 280,263 0.29 57,135 0.06 96,171,676 100 Kapuas (25 th, i=12% ,BCR=1) NPV Total Proportion (IDR/ha) (%) 84,625,877 93.66 3,545,111 3.92 1,517,560 1.68 330,280 0.37 280,263 0.31 57,135 0.06 90,356,227 100

Farmers Project developer National govenrment Sub national government Independent auditor brooker Total
Based on cost expenditure assumptionby each stakeholder

Closing remarks
The proposed financial scheme and incentive distribution

mechanism was based on condition and situation of readiness phase of REDD+

The appropriate mechanism should be:
Transparancy Fairness Proportional Efficiency Effectiveness