Dr. Jonah Busch, Climate and Forest Economist from Conservation International, gave this presentation on 29 November 2012 at the World Resources Institute UNFCCC COP18 side-event in Doha, Qatar.

1. How much would Indonesia’s moratorium on
forest concessions have reduced emissions
from deforestation from 2000-2010?
J Busch – R Lubowski – E Ashkenazi – K Austin – F Boltz – M Hansen – B Margono – M Steininger–F Stolle– A Baccini
Jonah Busch, Ph.D. (Conservation International)
World Resources Institute Side Event, UNFCCC COP 18
Millennium Hotel, Doha, Qatar
Thursday, November 29, 2012

2. 1. How much of Indonesia’s 2000-2010 emissions from deforestation
occurred within oil palm concessions (kebun) and timber
concessions (HTI)?
2. How much did the designation of a concession between 2000-2010
increase the annual deforestation rate at a particular site, relative to
if that site hadn’t been designated a concession?
3. How much would Indonesia’s moratorium on new concessions
have reduced emissions if applied from 2000-2010?
4. What carbon price would have achieved an equivalent reduction?

3. 1. How much of Indonesia’s 2000-2010 emissions from deforestation
occurred within oil palm concessions (kebun) and timber
concessions (HTI)?
19% in oil palm concessions; 26% in timber concessions
2. How much did the designation of a concession between 2000-2010
increase the annual deforestation rate at a particular site, relative to
if that site hadn’t been designated a concession?
on average, oil palm concessions increased deforestation by 60%,
and timber concessions increased deforestation by 110%,
controlling for year- and site- specific effects
3. How much would Indonesia’s moratorium on new concessions
have reduced emissions if applied from 2000-2010?
by 578 MtCO2e/10 yrs (8.3%) assuming no leakage, extrapolating
rates from dated to undated concessions
4. What carbon price would have achieved an equivalent reduction?
a carbon price of $2.05 (mandatory) or $9.40 (voluntary)

4. 1. How much of Indonesia’s 2000-2010 emissions from deforestation
occurred within oil palm concessions (kebun) and timber
concessions (HTI)?
2. How much did the designation of a concession between 2000-2010
increase the annual deforestation rate at a particular site, relative to
if that site hadn’t been designated a concession?
3. How much would Indonesia’s moratorium on new concessions
have reduced emissions if applied from 2000-2010?
4. What carbon price would have achieved an equivalent reduction?

6. Forest (ha), 2000 Deforestation (ha), 2000-2010
Total: 94.24 million ha Total: 8.78 million ha
7,835,348 Oil palm concession
1,442,462
10,830,952 Logging concession
566,778
6,509,198 Timber concession
61,859,374 4,718,690
7,207,299 Protected area 1,859,364
Unprotected, non-
concession
190,202
Palm oil conversion (ha), 2000-2010 Emissions (tCO2e), 2000-2010
Total: 1.28 million ha Total: 8.71 billion tCO2e
1,691,808,273
341,097
414,866,793
4,187,169,312
27,609
768,365
135,348 2,280,133,378
10,793
132,747,802

7. 1. How much of Indonesia’s 2000-2010 emissions from deforestation
occurred within oil palm concessions (kebun) and timber
concessions (HTI)?
2. How much did the designation of a concession between 2000-2010
increase the annual deforestation rate at a particular site, relative to
if that site hadn’t been designated a concession?
3. How much would Indonesia’s moratorium on new concessions
have reduced emissions if applied from 2000-2010?
4. What carbon price would have achieved an equivalent reduction?

8. 2.2x (3.4x) more deforestation INSIDE
oil palm (timber) concessions
than OUTSIDE concessions…
Indonesia forest loss, 2000-2010
180,000,000
160,000,000
140,000,000
120,000,000
Area (ha)
100,000,000 Non-forest (+13%)
Other forest (-8%)
80,000,000 Timber (-27%)
Logging (-5%)
60,000,000 Oil palm (-17%)
Protected (-3%)
40,000,000
20,000,000
-
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Year

9. 2.2x (3.4x) more deforestation INSIDE …but concession land is
oil palm (timber) concessions geographically different
than OUTSIDE concessions…
Indonesia forest loss, 2000-2010
180,000,000 Unprotected Oil palm Timber
Non-concession Concession Concession
(n=136,963) (n=22,285) (n=16,076)
160,000,000
Slope (%) 7.2 6.3 5.7
140,000,000
Elevation (m) 340 286 272
120,000,000 Distance to nearest
highway (km) 65 56 46
Non-forest (+13%) Distance to nearest
Area (ha)
100,000,000
provincial capital (km) 226 239 211
Other forest (-8%)
Potential agricultural
80,000,000 Timber (-27%) revenue ($/ha/yr) $245 $212 $259
Logging (-5%) Above and below
60,000,000 Oil palm (-17%) ground biomass (tC/ha) 148 149 160
Protected (-3%)
Peat extent (%) 15% 22% 66%
40,000,000
Forest cover, 2000 (%) 52% 48% 59%
20,000,000
Forest cover, 2010 (%) 48% 41% 45%
-
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Deforestation (%/10 yr) 7.8% 17% 24%
Year Palm oil cover, 2010 (%) 2.9% 9.0% 2.9%

10. 2.3x (1.3x) more deforestation AFTER
oil palm (timber) concessions
than BEFORE concessions…
Average annual
deforestation rate (%/yr)
Before After
2000-2010 concession concession
Oil palm, undated -1.62%
Oil palm, dated -2.35% -1.1% -2.5%
Logging, undated -
Logging, dated -0.47% -0.38% -0.51%
Timber, undated -0.28%
Timber, dated -2.98% -2.6% -3.5%
Protected, undated +1.46%
Protected, dated -0.40% -1.4% -0.37%
Other forest -0.77%
Total forest -0.94%
Non-forest +1.25%

11. 2.3x (1.3x) more deforestation AFTER …but deforestation was
oil palm (timber) concessions increasing nationwide
than BEFORE concessions…
1.4%
Average annual
deforestation rate (%/yr) 1.2%
Before After
2000-2010 concession concession
Deforestation rate (%/yr)
1.0%
Oil palm, undated -1.62%
Oil palm, dated -2.35% -1.1% -2.5% 0.8%
Logging, undated -
0.6%
Logging, dated -0.47% -0.38% -0.51%
Timber, undated -0.28%
0.4%
Timber, dated -2.98% -2.6% -3.5%
Protected, undated +1.46% 0.2%
Protected, dated -0.40% -1.4% -0.37%
Other forest -0.77% 0.0%
Total forest -0.94%
Year
Non-forest +1.25%

12. To attribute deforestation to the
designation of oil palm concessions,
we need fixed effects regression to…
-control for year-specific effects
-control for site-specific effects
matching methods?
-not necessary due to panel data

13. Designation Average effect of concession designation
on deforestation (ha/yr), controlling for
year fixed-effects and site fixed-effects
Timber concession +110%
(109-111%)
Oil palm concession +60%
(57-64%)
Logging concession +61%
(59-63%)
Protected area - 4.4%
(1.2-7.5%)
Poisson regression; number of 3km x 3km site-years = 1,268,690

14. 1. How much of Indonesia’s 2000-2010 emissions from deforestation
occurred within oil palm concessions (kebun) and timber
concessions (HTI)?
2. How much did the designation of a concession between 2000-2010
increase the annual deforestation rate at a particular site, relative to
if that site hadn’t been designated a concession?
3. How much would Indonesia’s moratorium on new concessions
have reduced emissions if applied from 2000-2010?
4. What carbon price would have achieved an equivalent reduction?

15. Oil Palm Concessions Timber Concessions
Total: 10.6 mha Total: 8.6 mha
post-2000
pre-2000
undated
Logging Concessions Protected Areas
Total: 13.2 mha Total: 14.8 mha

16. Aggregating impact to national level
Scope of moratorium Reduction in Reduction in
deforestation emissions from
deforestation
New oil palm concessions 117,000 ha/10yrs 153 MT/10yrs
in high-carbon forests (>150tC/ha) and (-1.3%) (-2.2%)
peat lands
New oil palm + timber concessions 414,000 ha/10yrs 578 MT/10yrs
in high-carbon forests (>150tC/ha) and (-4.7%) (-8.3%)
peat lands
New oil palm + timber concessions 550,000 ha/10yrs 628 MT/10yrs
in all forest (-6.3%) (-9.0%)
New oil palm + timber + logging 628,000 ha/10yrs 676 MT/10yrs
concessions in all forest (-7.2%) (-9.6%)
New + existing oil palm + timber + 1,486,000 ha/10yrs 1367 MT/10yrs
logging concessions in all forest (-16.9%) (-19.5%)
Uninformed extrapolation of concession dates to undated concessions; no leakage
Caveats: No exemptions; no temporal shifting

17. 1. How much of Indonesia’s 2000-2010 emissions from deforestation
occurred within oil palm concessions (kebun) and timber
concessions (HTI)?
2. How much did the designation of a concession between 2000-2010
increase the annual deforestation rate at a particular site, relative to
if that site hadn’t been designated a concession?
3. How much would Indonesia’s moratorium on concessions have
reduced emissions if applied from 2000-2010?
4. What carbon price would have achieved an equivalent reduction?

18. Comparing incentive structures for
REDD+ using OSIRIS-Indonesia
(Busch et al, PNAS, 2012)
Click-of-a-button decision support tool to
estimate and map the impacts of alternative
REDD+ policy decisions on:
-deforestation (ha/yr)
-emission reductions (tCO2e/yr)
-national and local revenue ($/yr)
Benefits:
-free
-MS Excel interface
-transparent
-open-source
-peer-reviewed, published, scientific
-online: http://www.conservation.org/osiris

19. 1. OBSERVED DEFORESTATION, 2000-2005
(Hansen, 2008)
Deforestation: 687,000 ha/yr
Emissions: 860 million tCO2e/yr
KALIMANTAN
SUMATRA
SULAWESI
PAPUA
JAVA
2. LIKELY DEFORESTATION WITHOUT RED
(unofficial “reference scenario”)
Deforestation: 693,000 ha/yr
Emissions: 803 million tCO2e/yr
KALIMANTAN
SUMATRA
SULAWESI PAPUA
JAVA
3. LIKELY DEFORESTATION WITH RED ($10/tCO2e)
KALIMANTAN
KALIMANTAN Deforestation: 557,000 ha/yr
SULAWESI Emissions: 581 million tCO2e/yr
SUMATRA SULAWESI
Revenue: $2.2 billion.yr
PAPUA
JAVA
SUMATRA
SULAWESI PAPUA

20. Carbon price needed for equivalent reduction
(OSIRIS v1.5; Busch et al, PNAS, 2012)
Scope of moratorium Reduction in Voluntary Voluntary Mandatory
emissions from incentives incentives incentives (e.g.
deforestation (simple) (improved) cap-and-trade)
New oil palm concessions in 153 MT/10yrs $2.60/tCO2e $1.10/tCO2e $0.50/tCO2e
high-carbon forests (-2.2%)
(>150tC/ha) and peat lands
New oil palm + timber 578 MT/10yrs $9.40/tCO2e $2.75/tCO2e $2.05/tCO2e
concessions in (-8.3%)
high-carbon forests
(>150tC/ha) and peat lands
New oil palm + timber 628 MT/10yrs $10.20/tCO2e $2.95/tCO2e $2.25/tCO2e
concessions in all forest (-9.0%)
New oil palm + timber 676 MT/10yrs $11.00/tCO2e $3.15/tCO2e $2.45/tCO2e
+ logging concessions in (-9.6%)
all forest
New + existing oil palm + 1367 MT/10yrs $24.40/tCO2e $7.05/tCO2e $5.60/tCO2e
timber + logging (-19.5%)
concessions in all forest

21. 1. How much of Indonesia’s 2000-2010 emissions from deforestation
occurred within oil palm concessions (kebun) and timber
concessions (HTI)?
19% in oil palm concessions; 26% in timber concessions
2. How much did the designation of a concession between 2000-2010
increase the annual deforestation rate at a particular site, relative to
if that site hadn’t been designated a concession?
on average, oil palm concessions increased deforestation by 60%,
and timber concessions increased deforestation by 110%,
controlling for year- and site- specific effects
3. How much would Indonesia’s moratorium on new concessions
have reduced emissions if applied from 2000-2010?
by 578 MtCO2e/10 yrs (8.3%) assuming no leakage, extrapolating
rates from dated to undated concessions
4. What carbon price would have achieved an equivalent reduction?
a carbon price of $2.05 (mandatory) or $9.40 (voluntary)

22. Conclusion:
A moratorium on new oil palm concessions and timber
concessions in high-carbon forests (>150 tC/ha) and
peat lands would have had a substantial impact on
reducing emissions from deforestation:
578 MtCO2e/10yrs (8.3%)
Modest carbon gains could have been achieved by
expanding the scope of the moratorium to include
secondary forests and new logging concessions
For Indonesia to achieve its 26-41% emission reduction
target, it would have had to expand the scope of the
moratorium to address conversion within existing
concessions or non-concession areas, or have put
price-based instruments in place

23. Terima kasih!
Thank you!
Thanks to:
World Resources Institute
Woods Hole Research Center
David and Lucile Packard Foundation
Comments and feedback welcome:
http://www.conservation.org/osiris
jbusch@conservation.org

26. REDD+: an overview
Payments ($)
Developed countries provide finance
through funds or markets
Emission reductions (tCO2e/yr)
•Developing countries reduce 15% of global
GHG emissions from deforestation, etc
•Co-benefits: biodiversity, clean water…
•UNFCCC sets basic rules
•Timeline: agreement by 2015; implementation by 2020
•Forest countries decide how to achieve reductions
•Price-based mechanisms or place-based policies

27. Palm oil in stove
Palm oil in food
Palm oil in car

28. Source: World Resources Institute

29. Data (~200,000 3km x 3km cells)
Dependent variables:
• Forest cover, 2000, 60m Landsat (Margono, Hansen et al, in prep)
• Annual deforestation, 2000-2010, 60m Landsat (Margono, Hansen et al, in prep.)
• Oil palm distribution, 2010, 250m Modis (Miettenen et al, 2011)
Explanatory variables:
• Oil palm concession boundaries and dates (Ministry of Forestry, WRI, 2009/2010)
• Timber concession boundaries and dates (Ministry of Forestry, WRI, 2009/2010)
• Logging concession boundaries and dates (Ministry of Forestry, WRI, 2009/2010)
• Protected area boundaries (WRI) and dates (various)
Emission factors:
• Forest biomass, 463m (Baccini et al, 2012)
• Soil carbon (FAO, 2008)
• Peat distribution and emissions (Wetlands International; Hooijer, 2010)

30. Well-structured voluntary REDD+ PES Well-structured CAT
Voluntary
nearly as effective as cap-and-trade
(1) Basic PES-style voluntary incentives
Site-scale accounting;
historical reference levels
(2) District-scale accounting;
historical reference levels
(3) District-scale accounting;
projected reference levels
(4) District-scale accounting;
projected reference levels
+20% revenue sharing Shortfall
(5) Well-structured voluntary incentives
District-scale accounting;
projected reference levels Surplus
+20% revenue sharing
+20% responsibility sharing
(6) District-scale accounting
projected reference levels minus 10%
+20% revenue sharing
+20% responsibility sharing
(7) Mandatory incentives, e.g. Cap & Trade
District-scale accounting;
projected reference levels minus 10%
0% revenue sharing
100% responsibility sharing
(8) District-scale accounting;
projected reference levels minus 26%
0% revenue sharing
100% responsibility sharing

31. Geographically prioritizing pilot programs:
Expected abatement under REDD+ at $10/tCO2e
KALIMANTAN
SULAWESI
PAPUA
SUMATRA
JAVA
Where is forest carbon, AND where can money change behavior?

32. Sensitivities
• Functional form
• Included variables
• Policy decisions
• Model parameters
-Carbon price
-Price elasticity of demand
for frontier agriculture
(intranational leakage)
-Exogenous agricultural price
increase (international leakage)
-Peat emission factor
-Carbon data set
-Social preference for
agricultural revenue
-National reference level
-District level start-up costs
-Per-hectare transaction costs

33. Economic incentives
are just one
important component
of a national
REDD+ strategy

34. The road ahead
• Analysis in other regions:
Peru, Madagascar, Bolivia, Mexico
• IDRISI GIS interface (w/ Clark Labs)
• Agricultural concessions and policies
• Degradation and reforestation
• Safeguards for REDD+
• Market integrity mechanisms:
risk buffers, offset trade ratios,
conservative accounting
• Matching payments for biodiversity,
water and other ecosystem services
• Community conservation contracts
and green economic development