Missing the peat for the trees? A response to the Olbrei-Howes KFCP critique

Source: The Star Online
Written by Jonathan Pickering

Source: The Star Online

That an aid activity has not met its original expectations within the intended timeframe is not generally headline-grabbing news. It is in the nature of the business that aid programs tend to be harder and slower than initially expected. So what makes the Kalimantan Forests and Climate Partnership (KFCP) different?

Reading Erik Olbrei and Stephen Howes’ paper on KFCP and some recent media coverage it has generated, KFCP seems to stand out in two ways. There is the large gap between its original targets and its current, scaled-back objectives. And there is the stark contrast between (a) KFCP’s slower than expected progress and limited scope and (b) rapid ongoing deforestation and forest degradation across Indonesia.

The paper makes a useful contribution to the public debate about Australia’s climate finance, and the authors raise valid concerns about both of these issues. However, I believe that some aspects of their assessment of KFCP are overly negative and should be placed in a larger perspective. My reflections draw in part on my involvement in KFCP’s inception and early design phase from 2007-2009 while I was employed at AusAID.

Targets and transparency

As the paper notes, there were several reasons why KFCP’s original targets needed to be scaled back. First, additional backers – who were originally expected to cover up to 70 per cent of KFCP’s total costs – failed to come on board as initial optimism about REDD+ markets wavered in the wake of the global financial crisis and uncertainty about long-term international climate policy. Second, after the change of government in Australia, KFCP was re-oriented to become a ‘demonstration activity’ intended to feed more explicitly into the UN climate negotiations. Finally, as the design of KFCP got underway, the rough-and-ready estimates that went into the announcement were given a more thorough reality check.

It could of course be argued that more detailed costings should have been undertaken prior to the announcement (though there was a large element of striking while the iron was hot in late 2007, in the lead-up to Indonesia’s hosting of that year’s UN climate change conference in Bali). But all of these reasons for scaling back the original targets were in my view sound. AusAID and what is now the Department of Climate Change and Energy Efficiency (DCCEE) invested substantial and wide-ranging expertise in KFCP’s design. The resulting departures from the announcement were motivated by well-founded concerns for maximising the effectiveness and sustainability of KFCP with the resources available.

In this sense, the impression given by the paper that KFCP illustrates an announcement culture (rather than, by implication, an effectiveness culture) is an over-simplification. KFCP reflects one of the Indonesian government’s highest policy priorities and its design demonstrates a commitment to flexibility, innovation and learning. A more pertinent criticism would be that concerns for effectiveness reflected in the design process were not matched by a ‘transparency culture’ whereby project-related documents, including reviews and evaluations, were routinely published.

The authors rightly highlight this as a significant concern. This concern, moreover, is not unique to KFCP, but applies in varying degrees to the aid program’s broader portfolio of climate change programs and to AusAID evaluations generally. However, it is also worth noting a point not mentioned in the paper: in 2007 Australia initiated a research partnership with the Center for International Forestry Research (CIFOR) that, among other things, enabled CIFOR to include KFCP in a major (and ongoing) Global Comparative Study of REDD+ initiatives.

Putting KFCP in the bigger REDD+ picture

So has KFCP fiddled while Kalimantan burns? Since I haven’t been engaged in the further development of KFCP since 2009, I’m not well placed to comment in detail on the paper’s assessment of progress in implementation. However, I’ll note that many of the delays cited are common to other REDD+ and aid activities, and that KFCP may be performing considerably better than many of the other officially supported REDD+ activities in Indonesia. Cutting corners on steps such as community engagement or environmental impact assessments would have created unacceptable risks. Instead, I will comment on the authors’ broader assessment that the current approach is not working.

We can all agree that current action is inadequate in the face of ongoing deforestation in Indonesia, and that more resources – as well as a greater sense of urgency both in Indonesia and internationally – are needed to tackle the problem. But does that mean that it is no longer plausible to proceed with REDD demonstration projects … in the hope that a REDD market will come along to allow these to be scaled-up’ (pp.39-40)? There are several reasons for thinking otherwise.

First, while the authors mention Norway’s $1 billion forest carbon partnership with Indonesia (which has materialised despite uncertainty about global carbon markets), they do not mention the much larger target of up to $100 billion a year in climate finance for developing countries that wealthy countries have committed to mobilise by 2020. Even if global REDD+ markets do not materialise in the next few years, Indonesia will be a prominent candidate for likely substantial increases in public funding for REDD+ over the next decade.

Second, since Norway’s announcement we have seen not only the 2011 moratorium on new forest and peatland concessions, but also in January 2012 the issuance of a long-awaited Presidential Regulation on spatial planning in Kalimantan. According to preliminary analysis, the regulation may expand the scope of protected forest beyond the 2011 moratorium. Until newer data on deforestation rates become available that could reflect the impact of these measures, it is simply too early to conclude that “deforestation continues unabated” (p.40).

Third, demonstration activities such as KFCP continue to have an important role to play alongside national-level approaches. Norway’s approach is indicative of the kind of scale needed in order to start turning around systemic drivers of deforestation in Indonesia. And the authors make a strong case for Australia’s future assistance to influence policy change and economic incentives at higher as well as local levels, particularly through performance-based funding.

But this does not mean the KFCP experiment has been misguided. Norway’s approach is not a substitute means of tackling the problem. Rather, national and site-specific approaches are complementary. Indeed the success of national-level approaches such as Norway’s will depend in part on the successful implementation of area-based demonstration activities such as KFCP. Pilots, by their very nature, will be most useful in generating lessons if they target different stages of the REDD+ ‘supply chain’.

While the authors acknowledge that both policy changes and pilots are needed, they conclude that ‘Australia’s restriction of its activities to pilots and technical work, and its lack of emphasis on policies is a weakness’ (p.41). But there is a difference between identifying needs for scaling up future assistance and assessing KFCP on its own terms. Specifically, a clear distinction needs to be made between aspects of KFCP whose success is dependent on being implemented at a larger scale and those that are not.

Actual emissions reduced will be one important measure of KFCP’s success. But the authors’ conclusion that ‘The most that can be hoped for from KFCP under current plans is the tenuous, possibly temporary protection of a relatively small patch of peatland’ (p.40) overlooks other significant contributions that KFCP could make even while operating on a more limited scale. These include: raising the profile of tropical peatland emissions in international negotiations (KFCP is, for example, repeatedly cited in joint submissions to the UNFCCC by Indonesia and Australia); devising replicable methods of measuring peat carbon stocks and emissions; developing credible social and environmental safeguards (arguably a make-or-break issue in REDD+ negotiations); and trialling equitable incentive payment mechanisms that counter the local-level drivers of peatland degradation. That demonstration of some of these aspects may require more time doesn’t in itself imply the entire approach isn’t working.

It is perfectly valid (and indeed important) to undertake a case study of a single demonstration activity, but there are inherent limits to the range of policy implications that can be drawn from it. Whether there are good reasons for becoming ‘more sceptical of the entire REDD undertaking’ (p.42) would require substantially more evidence about the wider context of REDD+ in Indonesia and internationally. Indeed the evidence presented in the paper on the urgency and scale of the deforestation challenge is arguably far less of a reason for Australia to withdraw its assistance (which the authors do not dismiss as an option) than for sustaining – and potentially boosting – Australia’s cooperation with Indonesia on this critical issue.

Whether KFCP will ultimately deliver on its design objectives remains to be seen, and tradeoffs between speed, scale and effectiveness will remain a matter for further debate. But assessing the long-term impact of KFCP will require a fine balance between its limited scope as one of a broader network of demonstration activities and the multiple pathways through which it can inform global REDD+ efforts.

Jonathan Pickering is a Research Associate with the Development Policy Centre and a PhD student at the ANU.

Jonathan Pickering

Jonathan Pickering is a Postdoctoral Fellow at the Centre for Deliberative Democracy and Global Governance at the University of Canberra and Visiting Fellow at the Development Policy Centre. He completed his PhD thesis (on climate change financing for developing countries) at ANU in 2013. Previously he worked at AusAID (2003-09).

2 Comments

  • Thanks to Erik and Stephen for their considered reflections on my reply. I’ll leave it to others who have had closer contact with KFCP more recently to comment further on how it has fared relative to the opportunities and constraints it has faced. I’ll limit my comments here to a few further reflections on the policy context in which demonstration activities are operating.

    On the fundamental issue of whether large-scale REDD+ funds are too distant and uncertain, I assume that the authors’ concern about the $100 billion a year pledge is that it is too far into the future to provide the basis for a national REDD+ initiative, rather than that Indonesia’s share of $100 billion would be too small to be considered ‘large-scale’ (bear in mind that a prominent review of REDD financing estimated that halving deforestation globally by 2030 would cost around $17-$33 billion a year). While a target for 2020 may seem distant, negotiations about scaling up current pledges of finance in the intervening years are anything but remote. This year in the UN climate negotiations wealthy countries will be under considerable pressure to pledge funds for the period 2013-15 at levels significantly higher than current pledges of around $10 billion a year. It is notable that in a context where the real value of aid has fallen in 2011, wealthy countries have continued to stand by their short-term and long-term climate finance pledges, even if the allocation of pledged funds to specific projects has been slower than expected. Moreover, several recently established multilateral REDD+ funds (including the Forest Carbon Partnership Facility and the Forest Investment Program) are now reaching the point where they can disburse more substantial resources. Nor is market-based REDD+ finance before 2020 altogether out of the picture. For example, work is underway on rules that could allow REDD+ credits to be admitted under California’s cap-and-trade scheme from 2015.

    Whether REDD+ will be able to compete successfully with other climate-related funding for energy and adaptation remains dependent on both the success of demonstration activities and larger-scale policy initiatives such as the Indonesian moratorium. Reported abuses of the moratorium such as the Tripa peat swamp in Aceh are certainly serious (note that a new criminal investigation into that case has just been launched), but such cases also need to be put into a broader perspective. A 2012 report by the World Resources Institute, while likewise acknowledging that enforcement will remain a major challenge, assessed that violations of the moratorium in its initial phase have been ‘rare’ (rather than ‘rife’). The key issue is not whether compliance with the moratorium will be perfect (which it surely will not be) but whether there has been enough compliance to start shifting Indonesia’s forest emissions below a business as usual trajectory. Until that data is available, individual breaches will only tell us part of the story.

    Finally, multilateral REDD+ negotiations may be frustratingly slow, but that doesn’t mean they are leading nowhere. UNFCCC submissions are notoriously vague but there is often a considerable amount of technical work underlying them that is fed into negotiations, particularly in the UNFCCC’s subsidiary bodies. As the Centre for International Forestry Research (CIFOR) has reported, the results on REDD+ from last year’s climate conference in Durban were mixed, but there was nevertheless important progress in several key areas. A senior UK lawyer on carbon markets commented, “For the private sector interested in long-term reputable investments associated with REDD+ actions, this is a very positive decision.”

    Each step in the negotiations may be slower than what’s needed, and there remains a real risk that the REDD+ negotiations will falter. In this sense, I certainly agree with Erik and Stephen that current REDD+ efforts are not large enough or rapid enough to match ongoing drivers of deforestation. But as in the case of demonstration activities, it doesn’t follow that the current approach needs to be abandoned altogether (rather than built upon) if what’s really needed is a greater sense of urgency coupled with a high-level commitment on the part of both developed and developing countries to make REDD+ work.

  • Many thanks to Jonathan Pickering for his thoughtful assessment of our paper and blog.

    Jonathan sets out three reasons for optimism about a demonstration project approach. Firstly, he mentions the $100 billion climate finance target by 2020 agreed at Copenhagen as a potentially major source of REDD funds for Indonesia. Here we simply repeat the fundamental point we make in the paper and blog: “The prospect of large-scale REDD funds arriving some time in the future is too distant and uncertain to provide sufficiently strong incentives to tackle the deep-seated drivers of deforestation and peat conversion in Indonesia.”

    The second reason given for optimism is that not only is the 2011 moratorium in place, but that a new regulation on spatial planning is in place for the Kalimantan provinces. As our paper points out, abuses of the moratorium are rife. Sadly, such abuses are ongoing, the latest case in point being the Tripa peat swamp in Aceh. This area should have been safe from conversion for oil palm, being covered both by the moratorium and by Indonesian law which protected deep peat like Tripa from conversion. But Tripa was excised from the moratorium, and in recent weeks canals were dug and fires set to destroy the forest. A legal appeal by an Indonesian NGO was rejected. The Presidential Regulation on spatial planning in Kalimantan also needs close examination for its actual impacts on the ground. The CIFOR response was cautious enough; another commentator argued that the decree’s removal of the `Limited Production Forest’ category could result in the loss of a further 3 million hectares of forests in Central Kalimantan.

    We agree with Jonathan’s third point that demonstration activities have an important role to play. But then it is up to KFCP to actually demonstrate something. While its community efforts may have been useful, after nearly four years not a single hectare of drained peatland has been re-flooded, nor a single tonne of peatland emissions avoided. Are the foundations of a peatland REDD mechanism in place? As far as we are aware, long-identified gaps in scientific knowledge of peatland emissions remain unfilled. Until this happens, it will not be possible to establish a sound accounting methodology for peatland emissions, not can any emission reductions achieved through KFCP project be measured. Not to our knowledge have baseline reference emission levels been defined. Thus little progress has been made in demonstrating how a peatland REDD mechanism could work. Over the last four years perhaps another 5 million hectares of forest have been lost in Indonesia. How many more will be lost by the time KFCP has successfully demonstrated a peatland REDD methodology?

    Perhaps, as Jonathan argues, KFCP is raising the profile of peatland emissions in UNFCCC negotiations. Though what, if anything, these negotiations are leading to is unclear. And the use of KFCP in the negotiations is a double-edged sword, as it adds to the pressure to put a positive spin of KFCP progress. Thus, Australia’s December 2011 submission to UNFCCC’s SBSTA states that `The Kalimantan Forests and Climate Partnership (KFCP) is one of the most advanced large-scale REDD+ demonstration activities in Indonesia’. It is a sentence often seen in official reporting on KFCP progress. In what sense KFCP is one of the most advanced REDD activities escapes us.
    It is this slow progress, and the assertion that KFCP may be performing as well if not better than other REDD projects, against the backdrop of continued deforestation, that draws us to the conclusion that there has been too much focus on REDD demonstration activities, and that it is time for a new approach.

    Erik Olbrei and Stephen Howes

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