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Indonesian peatland restoration: Economic indicators

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Presented by Budi Wardhana, Deputy for Planning and Cooperation of Peatland Restoration Agency (BRG), at Webinar "A Synthesis and Way Forward", 17 December 2020.

The presentation offered an extensive review of environmental goods and services provided by peatlands. This presentation showed the general economic model for restoration used to understand relevant indicators of the economic aspect of peat restoration. In this session speaker shared some potential criteria and indicators related to the costs saving and value of avoided environmental disaster and emissions; the value of ecosystem services; short-term and long-term growth; and return to investment capital.

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Indonesian peatland restoration: Economic indicators

  1. 1. 1 Indonesian Peatland Restoration - Economic Indicators Budi Wardhana – Deputy Head of BRG for Planning and Cooperation Badan Restorasi Gambut Republic of Indonesia
  2. 2. 2 To understand relevant indicators of peat restoration economy, we can relate it back to a general input - output economic framework Peat Restoration Rewetting, Revegetation of degraded peatland Educating, socialisation, training, empowering Revitalizing peoples livelihood and transformation to sustainability Peatland, raw materials/crops, land, financial capital, labor, technology Peatland local communities, communities/people, labor, culture, knowledge, wisdom, cooperation, societal values and norms Peat degradation halted. Avoided emissions from fire and decomposition, avoided floods and loss of landmass Land & materials, labor, capital and technology. These main factors provide the ingredients for a product INPUTS PROCESSES OUTPUTS General Economic Model Economy Peatland ecosystem services: provisioning, regulating, controling, cultural Production. Manufacturing or other activities to generate products. Goods and services. The products and services that could be enjoyed by consumer/public. INCOME VALUE Better and more sustainable products. Avoided loss from product destruction, avoided long term loss of productivity People and community’s safety and health. Avoided health issues, avoided disruption to life, livelihood and activities Social Environment
  3. 3. 3 ENVIRONMENT SOCIETY ECONOMY Two key focus areas Filling the gap on economic indicators of peatland restoration • how to measure values created out of the outputs of peat restoration, as well as • how these outputs and values relate to the initial inputs. These two areas should give key insights on how peat restoration has effectively performed in accelerating the general economy, and how efficient the process has been. Revenue from sustainable products and services: Rp-$ Contribution to GDP: % Sustained long term growth of revenue/ prevention of productivity loss: Annual % growth Return to invested capital: % Cost savings from avoided environmental disaster: Rp-$ Value of emissions avoided: Rp-$, based on carbon costs/prices Rp-$ invested per ton avoided emissions: Rp-$ /tCO2e Ecosystem services generated per hectare: Rp-$ /hectare Larger total workforce: # people Improvement to human capital value: Rp-$ /capita, based on assessment of skills, education and health Increased farmer household’s annual savings: Rp-$ /household Avoided health costs Rp-$ /capita The key indicators describe values that are generated from peat restoration activities for the environment, people, and the economy These indicators are for illustration purposes and are not exhaustive