Indonesia is the poster child for REDD, at a time when the scheme is being considered a potential entrant into the UN’s Clean Development Mechanism. Doing so would allow carbon markets to trade carbon offsets from this source, essentially lowering the opportunity cost of conservation for tropical forests; the right incentives, the right amount of conservation.
Sort of. Markets are but one institution, and need other institutions (property right, law enforcement) to work efficiently alongside them. Indonesia, it seems, still has some way to go:
NGOs in Aceh say corruption greases the wheels of the plantation concession system. Officials allegedly pocket millions of rupiah for issuing non-binding “recommendations” to companies lacking official permits, and fail to enforce laws stipulating ten years’ jail and a $500,000 fine for planting in parks.
Forestry officials in the area say confusion, rather than corruption, is the problem.
Conflicting maps, clashing tenure claims, and overlapping authorities mean locals, district chiefs, companies and government officials may not be aware of exact park boundaries, even in UNESCO-listed World Heritage rainforests such as Leuser.
“The boundaries do not match reality in the field,” said Syahyahri, head of Aceh Tamiang Forestry Department.
“Villagers don’t know who the forest belongs to. They may not have seen the maps. We are gathering data for making the boundaries now.”
This all makes it kind of hard to convince polluter to cough up the dough. But there’s more, as pointed out recently in CT:
Waggoner showcases eleven different cases of major discrepancies in forest measures across the globe, including some within IPCC forest carbon accounting guidelines. One of the reasons for such uncertainty, he writes, is related to how forests are defined. The definition Waggoner cites—the Forest Identity—consists of four measures: area, growing stock density, biomass, and carbon. Uncertainties exist in each of these attributes and as they are combined to form the Forest Identity, their uncertainties aggregate and can result in significantly inaccurate final numbers.
Ultimately, we’re dealing with well-defined demand (companies that want to offset a well-defined amount of CO2e emissions, against an uncertain supply of carbon offsets from sinks. No matter investors in the US seem to prefer offsets produced closer to home. And don’t get ne started on biodiversity offsets, where there’s uncertainty on both sides!
Punchline: not sure our economic systems are prepared to deal efficiently with the uncertainty in natural systems.
