ecosystem valuation based strategic...

Muaro Jambi SEA Case Study 1 Abt Associates Inc.

D

Ecosystem Valuation Based Strategic Environmental Assessment: Muaro Jambi Case Study

February, 2014


Muaro Jambi district is home to the Berbak National Park, a protected area in Indonesia’s Ramsar Site and an internationally recognized waterfowl habitat. The national park has a total peatland area of about 110,000 hectares while a forest park (Taman Hutan Raya or Tahura) covers 60,000 hectares. Land use in the district is dominated by dry agricultural land (293,256 hectares) followed by oil palm plantations (87,992 hectares) and wet agricultural land suitable for rice (17,000 hectares). Agriculture and mining (largely petroleum mining) are the main economic sectors, respectively contributing 30% and 26% of gross regional economic product (BPS, 2012). Oil palm plantations are the largest contributor of GDP in the agriculture sector. High returns from oil palm and other agricultural uses put pressure on the forests in Muaro Jambi. Other factors in forest degradation are: a legacy of ineffective land use licensing prior to the establishment of the new district (pemekaran in Indonesian); confusing forest boundary demarcation; land disputes; illegal logging; and peat fires due to drainage. Between1990-2000, average annual deforestation rates were 2.44% within Berbak National Park and 4.66% outside the park (although these rates include spikes due to fires in the late 1990s).

Changes in the land cover of Muaro Jambi play a critical role in the quantity of greenhouse gases emitted from the district, notably carbon dioxide and methane. Peat forests store an immense quantity of carbon. These forests have historically covered greater than 40% of the district. As the land use map below shows, the forest cover has reduced in recent years. Forests have been subject to increased rates of deforestation from forest fires exacerbated by illegal logging and land clearing for plantation agriculture: peat forest area in Muarjo Jambi has reduced from 68% in 1989, to 25% in 2007 (Chen et al. 2008).

Land Use Map of Muaro Jambi


Objective of this Strategic Environmental Assessment (SEA) case study is to inform potential for low-emissions investment in Muaro Jambi:

Assess the current land use allocation and potential land use changes in Muaro Jambi.

Estimate the financial and economic returns to land and how they are distributed by stakeholder groups at different institutional scales.

Evaluate the pressure that different land uses exert on forests to aid in formulation of ecosystem management plans.

Evaluate potential options to reduce future emissions.

Assess the demand for renewable energy investments by examining electrification rates.

Assess socio-economic and political landscape that may impede or enhance investments.

Win-win policies for reducing greenhouse gas (GHG) emissions from the use of alternative energy sources and forest conservation are not easily achieved when the full social benefits of forest conservation and financial returns from land use accrue at a different institutional scale (i.e., society versus local communities). The financial returns to land indicate the direct returns to land to its stakeholders, and economic returns indicate the full social returns to land (including the impact on GHG emissions). A significant difference in these returns would result in overuse of resources that do not give direct returns to stakeholders, i.e. forests and peat lands. Another circumstance leading to natural resource degradation is when local communities do not have adequate information on the value that natural resources provide to their community. Both these aspects – economic value of natural resources not accruing to the community, or accruing but not recognized by the community – are discussed in detail in the context of Muaro Jambi.

To inform resource management decisions this analysis assesses the current land uses and, based on the current land conversion patterns, future land use changes, the financial and economic returns to land from various uses, and the entities to which those returns accrue.


Economic Returns to Land

Economic returns to land include other values from ecosystem services (in addition to the direct use of land), including (Hein et al. 2006):

Indirect use values: Benefits from ecosystems’ regulation of climate, carbon sequestration, hydrological, and other processes.

Option values: Having the option to use a resource in the future.

Non-use values: Inherent attributes of an ecosystem, including existence value, bequest value (future benefits to a person’s descendants), and altruistic value (knowing that someone else benefits).

When accounting for carbon sequestration value of peat, and methane emissions from oil palm, the net returns to land in agricultural use are negative, implying that peat forests should ideally not be converted to alternative uses.

See Technical Appendix for details on the calculation of financial and economic returns to land.

Economic returns to land from forest in Muaro Jambi are the highest. Financial and Economic Returns from Land Uses

Financial Returns to Land

Key land uses in Muaro Jambi each yield direct financial returns to their stakeholders. The map below presents annualized values (using a 10% discount rate) of private, financial returns to land in its various uses in Muaro Jambi. Financial returns from protected and production forests include their direct uses:

Visitation fees Logging (only legal logging was estimable) Non-timber forest products(only legal

extraction was estimable)

Oil palm plantation, rubber plantation, and crops such as rice and corn each have higher financial returns than forest. Forest areas that are not national parks are under particular threat from the pressure exerted by agricultural use.

When considering only financial returns, peat forest has very low returns to land, and as a result agricultural use exerts pressure on the forest.


Carbon Sequestration

Economic returns from protected peat forests are 968,604 rupiah /hectare/year. The core component of these returns is the carbon sequestration value of the forests (an indirect use value) that is net carbon emissions resulting from land use changes valued at the social price of carbon. The carbon emissions from peat conversion accounts for positive emission from drainage, net of carbon sequestration provided by alternative land use, for example palm plantations. The social cost of carbon reflects the true cost of carbon to society, while the price of carbon is what market may be willing to provide for mitigation activities. Given that we are interested in estimating the economic value, we use an estimate of the social cost of carbon. Based on three integrated assessment models (DICE, PAGE, and FUND), the U.S. Government’s Interagency Working Group (2013) calculated a central estimate that ranges from $33-$71 per ton (in 2007 dollars) for 2010-2050. We use the midpoint of these values: $52/ton, or 636,481 Rp/ton. Since production forests are expected to be less dense than protected forest, we assume that carbon sequestration from production forests are 40% of the sequestration from protected forests, valued at 370,450 rupiah/hectare/year. The total economic return from production forest (1.3 million rupiah/hectare/year) is higher than economic returns from protected forests because of the financial returns they provide.

Critical Habitats

Berbak National Park also provides habitat for critically endangered Sumatran tigers and other flora and fauna.

Beukering et al. (2003) estimated that the net present value for forest conservation in the Leuser Ecosystem (in Northern Sumatra) is $171-828 million (2.1-10.1 trillion Rp) (using a 4% discount rate and a 30-year time period). This value is based on willingness to pay for conservation of wildlife species habitat, including the Sumatran rhinoceros, tigers, primates, mammals, and birds. Chadès et al. (2008) extrapolated from this value and estimated that the value Leuser Ecosystem provides for supporting the population of tigers is 1,836 billion Rp. This is equivalent to an annualized value of 106 billion Rp for conservation of tigers’ habitat. Since the area of the Leuser Ecosystem is 2,500,000 hectares (van Beukering et al. 2003), we estimated that the per-hectare value of providing tiger habitat is 42,470 Rp/hectare/year. We use this value as an upper bound, since the willingness-to-pay for tiger habitat in Muaro Jambi was not calculated directly.

Climate Regulations and Hydrologic Function

Data were not available to value these critical functions that are provided by peat land and results in returns to the

community and particularly agriculture and fishing. To this extent, our estimate is a lower bound of the true value.

Valuing Benefits from Peat Forests

Emissions Net of Sequestration

Economic values for palm oil, rubber, corn, and rice production include the net social value of carbon sequestration and carbon (CO2) dioxide emissions. For each of these three agricultural uses, emissions are greater than sequestration, resulting in net social costs. We used the following estimates of net annual CO2 emissions per year from peat forest conversion to each land use type (Agus et al. 2009): 64 tons/hectare on palm oil plantations; 41 for rubber plantations tons/hectare; and 45 tons/hectare for paddy farming. For corn, we calculated net annual emissions of 24 tons/hectare based on drainage depth from Agus (2008), accounting for emissions from drainage calculated from relationship established in Hooijer et al. (2010), and carbon sequestration calculated from Agus et al. (2009). We used an estimate of 636,481 Rp/ton of carbon (as described above) to value the social cost of these emissions. Agricultural land uses can have other negative environmental impacts, including methane emissions and fertilizer runoff. Other than carbon emissions, we have only quantified the impact of methane emissions from palm oil plantations (annualized value of 1.1 million Rp/hectare/year) due to data limitations.

Valuing Social Costs from Agricultural Use


Assessing how returns to land are distributed among stakeholders determines the stakeholders’ incentives for keeping land in its current use, as well as incentives to convert, and the land’s consequent degradation. Cropland, palm plantations (large or small estates), and rubber plantations yield financial returns that accrue to farmers and producers (see Technical Appendices for details). While most returns from palm oil plantations goes to their parent companies, the returns also provide sustenance to the community either in the form of wages from working on the plantation or by directly growing the palm. For example, in the Kumpeh subdistricts of Muaro Jambi, 70 percent of the community is employed at palm plantations. The government also collects taxes on the returns from agriculture. Most palm oil produced on large estates is exported; the export tax rate for palm oil was 9 percent in January 2013. (See Technical Appendix B for further details on estimation of returns to land by stakeholder group.)

For national forests, financial returns to government are in the form of park visit fees. The returns from carbon sequestration are accrued only to global interests, and not to the community, implying that the community will lack the incentive to manage the forests. Forests have high economic returns resulting largely from the carbon sequestration function it serves and preservation of biodiversity. However, these returns do not accrue to the local stakeholders.

This divergence in financial and economic returns to land and their skewed distribution among stakeholders puts pressure on land conversion from forests (which have high economic returns that accrue to stakeholders outside the community) to agriculture (which has high financial returns that accrue directly to stakeholders in the country).

Distribution of Returns by Stakeholders

Communities realize high returns to land from oil palm

plantations and other agricultural crops but receive relatively

lower financial returns from forests.

Returns to Land by Stakeholders


Peatland Forest

Hydrologic Functions

•Water Supply and Flows

•Flood and Drought Mitigation

Agriculture

•Palm oil

•Rubber

•Corn

•Rice

Another reason for degradation of natural resources is that the benefits from ecosystem services provided by these resources do not visibly accrue to stakeholders and thus are not recognized by responsible parties. In Muaro Jambi, communities do not yet recognize that in addition to providing clean air and reliable rains like other forests, peatland hydrology is fundamental to the water needed for their crops. Their decisions about peatland and forests (e.g. logging) are based on short-term economic interests rather than the long-term environmental, social, and economic impacts of hydrology changes (Parish et al. 2008).

Undisturbed peatland has soil water content as high as 80%, providing valuable water supplies. However, subsidence (the lowering of the surface of the peatland) enables the water table to reach and rise above the new surface level more quickly and frequently, while water runoff becomes faster (Page et al. 2009; Schrier-Ujil et al. 2013). This leads to flooding of adjacent and downstream lands, causing damage to homes, businesses, agriculture, and other economic losses. Maintaining water flows necessary for agricultural productivity on degraded peatlands can be difficult and costly, often leading to declining water quality and overall smaller harvests (Otham et al. 2011; Parish et al. 2008).

The economic values of flood mitigation and water supply functions of peatlands are substantial:

Whiteman and Fraser (1997) estimated the value of these functions at $91.60 per hectare per year, or 925,253 Rp per hectare per year.

Suyanto et al. (2005) estimated that households near Lore Lindu National Park in Indonesia have a willingness-to-pay of $2 to $3 (20 to 30 thousand Rp) annually to preserve the drought mitigation services provided by the hydrological functions of the park.

Drained peatlands are also very susceptible to destructive fires during dry periods. The 1997 fires that burned 2% to 3% of the land area in Indonesia had an economic impact of at least $9 billion, equivalent to 90,909 billion Rp (Van Eijk and Leenman 2004). These fires lead to adverse economic impacts through destruction of commercial timber, plantations, and farmland, reduction in tourism, the temporary shutdown of commerce, industry, and travel, and an increase in health care costs (Sastry 2000). In addition to the fire’s destruction, the smoke and haze impair photosynthesis, lowering agricultural and forestry production in unburned areas. Fires also eliminate seeds and seedlings, further degrade hydrologic functioning, and cause soil erosion (Schrier-Uijl et al. 2013; Tacconi 2003). Finally, repeated fire events lead to soil subsidence and risk of flooding, which destroys crops and increases carbon emissions.

Forests do generate some direct benefits for agriculture in

their surrounding areas, but these benefits are not recognized

by the community.


Emissions from Land Use Changes in Muaro Jambi Changes to the land cover of Muaro Jambi play a pivotal role in the quantity of greenhouse gases emitted from the district. As noted above, peat forests store an immense quantity of carbon, but have been subject to increased rates of deforestation from land clearing for plantation agriculture and forest fires (Chen et al. 2008). To model the effects of this land transition on CO2 emissions, we took GIS data on land cover and data on land use changes in Muaro Jambi from 1989 to 2007 and developed projections of future land use in the district, according to the existing patterns and historic deforestation rates – i.e., the baseline land use. Table 1 below shows estimates of current and projected land uses for this baseline land cover scenario. We used these data, along with estimates of carbon stock and CO2 emission rates found in existing literature, to estimate the emissions using the REDD ABACUS SP emissions estimation model (see Technical Appendices for details). Due to variability in carbon stock and emissions factors, land cover data for settlements, mining sites, and bodies of water are excluded from the model. Excluding these categories means that the model most likely underestimates overall CO2 emissions for the district.

Table 1. Initial and Projected Land Uses in Muaro Jambi, Assuming Historic Rates of Change

Land Use 2011 Acreage Percent of Total

2031 Acreage Percent of Total

Primary Peat Swamp Forest 50,456.0 10.0% 16,175.0 3.2%

Secondary Peat Swamp Forest 51,131.4 10.2% 47,577.4 9.5%

Degraded Forest/Shrub 52,473.9 10.4% 20,368.5 4.1%

Field/Clearing 37,577.3 7.5% 35,378.9 7.0%

Swamp 57,724.7 11.5% 44,359.1 8.8%

Oil Palm Plantation 141,565.7 28.2% 174,927.1 34.8%

Rubber Plantation 63,017.7 12.5% 92,750.4 18.5%

Coffee Plantation 105.4 0.0% 154.2 0.0%

Cocoa Plantation 615.1 0.1% 902.4 0.2%

Other Plantation 1,456.3 0.3% 2,125.9 0.4%

Rice 11,847.1 2.4% 17,909.0 3.6%

Corn 767.3 0.2% 1,190.1 0.2%

Other Agriculture 33,467.8 6.7% 48,381.0 9.6%

At historical rates of conversion, by 2031 land area under primary peat swamp forest will reduce by more than half. Land area under oil palm plantation will be as much as 35 percent of the total land area, as compared to 28 percent in 2011.


Tropical peatlands, such as those found in Muaro Jambi, contain a thick layer of carbon-dense plant matter, which is either partially or completely submerged in water. Draining peat forest for agriculture causes the peat layer to decompose. As the peat decomposes, carbon dioxide is released into the atmosphere (Hooijer et al. 2010). Therefore, keeping this layer of peat inundated is key for reducing future CO2 emissions. Cumulative emissions account for differences in plant biomass from land use changes, emissions from peat decomposition, and emissions from palm oil mill effluent (POME).

We created several potential scenarios for the reduction of CO2 emissions for the 2011-2031 period of analysis by limiting future degradation of both primary and secondary peat forest. These four scenarios range from a 50% reduction in deforestation of primary peat forest to a combined 100% reduction in deforestation of primary peat forest and 50% reduction in deforestation of secondary peat forest. All alternative scenarios also assumed that 15% of methane emissions from oil palm are captured. Reductions in cumulative CO2 emissions in the alternative scenarios compared to the baseline range from 14 to 31 percent. Table 2 gives an overview of the area of forest preserved compared to the baseline scenario, cumulative CO2 emissions, and percent reduction for each scenario over this time period. All alternative scenarios assume a period of three years of deforestation at historic rates before reduced deforestation rates are enacted. Each alternative scenario also assumes that officials in Muaro Jambi will be able to effectively stop any future deforestation within the limits of Berbak National Park.

A 50 percent reduction in conversion of primary peat forest to

other uses will result in 14 percent reduction in cumulative

emissions as compared to no action.

Table 2 Cumulative Emissions for Deforestation Reduction Scenarios in Muaro Jambi (2011‐2031)

Scenario Additional

Forest Preserved

(ha)

Cumulative Emissions

(106 tons CO2)

Emissions

Reduction

(tons CO2)

Emissions

Reduction (%)

Baseline Scenario ‐ 79.0 ‐

Scenario 1: 50% Reduction in Deforestation (Primary Peat Forest Only) 15% capture of methane from oil palm

13,240.7 67.9 11.2 14.1%

Scenario 2: 100% Reduction in Deforestation (Primary Peat Forest Only) 15% capture of methane from oil palm

30,882.9 60.3 18.8 23.8%

Scenario 3: 50% Reduction in Deforestation (Primary & Secondary Peat Forest)

38,697.8 62.0 17.0 21.5%

Scenario 4: 100% Reduction in Deforestation of Primary Peat Forest & 50% Reduction in Deforestation of Secondary Peat Forest 15% capture of methane from oil palm

47,745.5 54.5 24.5 31.0%


0

10

20

30

40

50

60

70

80

90

2010 2015 2020 2025 2030 2035Cu

mu

lati

ve E

mis

sion

(m

illio

n t

ons

CO

2yr

-1)

Year

BaselineScenario

Scenario 1

Scenario 2

Scenario 3

Scenario 4

0 5 10 15 20 25

Oil Palm

Degraded Forest/Shrub

Field/Clearing

Other Agriculture

Rubber

Rice

Swamp

Other Plantation

Corn

Cocoa

Coffee

Cumulative CO2 Emissions from Deforestation (tons CO2 ha-1)

Scenario 4

Scenario 3

Scenario 2

Scenario 1

BaselineScenario

Agricultural land use, particularly oil palm plantations, and deforestation contribute the largest portions of overall CO2 emissions. The figure below shows cumulative emissions per hectare from deforestation of peat forests in each scenario.

Figure 2 Cumulative Emissions Levels by Land Use in Muaro Jambi.

Figure 1 Cumulative CO2 Emissions for selected Deforestation Scenarios


Table 3 Major Land Uses and Values in Muaro Jambi

Areaa Annualized Returns(Rp/hectare/year)b,c Low Emissions

Allocation (hectares) Financial Economicd Development Options

Swamp forest (primary and secondary)

101,601 7 968,604

Maintain forest size by reducing pressure from conversion, improving incentives and payments for preservation through payment for ecosystem services (PES); encourage community management of Tahura.

Swamp or shrub swamp 100,045 0 700,129 Maintain swamp area through community‐based management, ecologically sustainable use of land such as wetland paddy.

Shrubs/thicket 10,154 0 ‐ 11,456,658

Forest plantation 10,948 892,848 1,263,298 Maintaining forest plantation.

Plantation 83,941 Encourage more environmentally friendly rubber, cocoa over palm, capture methane from palm plantation to reduce emissions impact. Limit expansion of plantation area and reduce incentives to convert licensed areas to plantation.

Oil palm 130,260*

12,189,404 ‐ 15,037,643

‐16,569,104 ‐

‐13,535,336

Rubber 57,985* 3,348,425 ‐13,610,659

Cocoa 566*

Other plantation

Dryland farming (primary and secondary) 157,953

Reducing pressure to convert forests and swamps to Increase returns to existing uses through agricultural intensification.

Rice paddy 9,466* 5,456,000 ‐23,185,645

Corn 738* 5,753,333 ‐9,522,211

Coconut 928*

Cassava 392*

Soy 160*

Sweet potato 141*

Other non‐plantation farming 29,142*Field or clearing

37,577 0 ‐ 11,456,658 Encourage community management of land to reduce degradation.

Settlement 11,528

Other 7,776

a. Land use areas in 2009 are from GIS outputs. The 2012 areas are marked with an asterisk, and were taken from the 2012 Muaro Jambi Provincial Databook.

b. Values were calculated using a 10% discount rate for financial returns, and 3% for economic returns. c. The range of values for oil palm is for the two types of plantations: smallholders and estate. d. Carbon sequestration and emissions are valued at the social cost of carbon.

Low Emissions Development Options

Low emissions development should account for current land use, existing land use development plans,

returns to land uses, and an understanding of the stakeholders benefits from these realized returns. Table 3

below presents the change in land use, the annualized financial and economic returns from each use and

the potential low emission development options.


Other Considerations for Low Emissions Investment Options Inappropriate Boundary-Setting and Spatial Issues can impede any plans for investment.

Lack of clarity about the boundaries between the protected forest, Berbak National Park, and the surrounding communities has given rise to land disputes. The community does not know the boundaries of the land that can (and cannot) be used for agriculture.

Unresolved land conflict simmers between farmers and a concession company in Muaro Jambi. PT Wira Karya Sakti (WKS) holds an acacia concession covering 3,400 hectares, while farmers from Danau Lamo Village have claimed the land as their own.

A draft local regulation on the Muaro Jambi Spatial Plan (Perda RTRW) is in process. Similar to other districts and provinces, the processing of a spatial planning regulation can be lengthy due to the need to synchronize the land use map with the Ministry of Forestry and the Provincial Spatial Plan.

At the local level, however, government agencies and village communities welcome clarification of inter-village boundaries to increase the likelihood of local positive action through enhanced rights and responsibilities from greater spatial certainty, ranging from farming to water resource protection through better canal management. Note that village boundaries are informally recognized and generally align along canals and waterways.

Electrification Rate determines the demand for off-grid electricity generation investments.

In 2005, the electrification rate in Muaro Jambi was 62.72% and increased to 86.73% by 2011. Un-served households are scattered in places that are difficult for the electricity grid to reach. The community uses

diesel generators for both consumption and production, implying benefits from off-grid electricity generation projects.

Low electrification (indicated by darker shading) in forested areas and where the settlement density is small implying that the population benefiting from these may be sparse.

The map below shows electrification rates in Muaro Jambi in 2011.


Table 4 Summary of Critical Issues Relevant to Low Emissions Investment in Muaro Jambi

Critical Issue Location

Spatial, land use and other cross-cutting issues

Local Regulation on Muaro Jambi Spatial Plan (Perda RTRW) in process

Muaro Jambi District

Unclear forest between boundaries and settlements

Areas adjacent to forests and Berbak National Park (Kumpeh Ilir and Kumpeh Ulu Subdistricts)

Conversion of land use from agricultural crops to oil palm plantations

(No data are available because there is no formal requirement to report this)

Land Conflict Kecamatan Sungai Bahar

Unemployment Throughout the region

Low level of women’s empowerment Throughout the region

Infrastructure and transportation issues

Lack of flood control infrastructure Subdistricts of Jaluko, Sekernan, Marosebo, Taman Rajo, Kumpe Ulu and Kumpe Ilir

Development Plan for Trans Sumatra Highway Primary arterial road on Muaro Jambi

Renewable energy issues

Low electricity service coverage Throughout the region

Potential for renewable energy other than hydro power not yet optimally developed (geothermal, biomass, biogas)

Throughout the region

Sustainable natural resource management issues

Communities highly dependent on natural resources in forest area

Kumpeh Ilir and Kumpeh Ulu Subdistricts

Expansion of oil palm plantation development Kumpeh Ilir and Kumpeh Ulu Subdistricts

Canal development Kumpeh Ilir and Kumpeh Ulu Subdistricts

River pollution caused by domestic and industrial waste

Along the riverbanks of Batanghari River

Shortage of human resources to manage natural resources

Throughout the region

Unregistered mining Throughout the region

Peatland fires Peatland in Muaro Jambi Decline of natural habitat Tahura, Berbak National Park

Infrastructure, transportation, and renewable energy potential are important to consider before making low emissions investments. Table 4 presents a summary of critical issues relevant to these investments.


Conclusion

In Muaro Jambi, one of the main sources of emissions is the conversion of peatland forest to other land uses. Conversion of forests to oil palm plantations has the highest impact on cumulative carbon emissions. At the same time, the incentives for conversion are high because the benefits of keeping land in forests do not accrue to the entities engaged in conversion. Incentives schemes such as payment for environmental services (PES) may be needed to align the private incentives with the social incentive. (It is possible, however, that the price of carbon that the market is willing to provide for mitigation may not equal the social cost of carbon.) In addition, some services that the forest provides to the communities – clean air, regular rains, maintaining water table and controlling droughts and floods – are not recognized by the communities. This issue will require activities that generate awareness. Arguably, the greatest potential for raising actionable awareness at the local level and in the near term is through making arguments that resonate best locally, namely, the critical need to maintain water resources – i.e., the blue thread (benang biru) generally resonates more than the carbon threat (benang hitam). Intensification of agriculture can also reduce the pressure on land in the short term. In the long term, however, alignment of private and social incentives is needed as higher returns in alternative uses will continue to put pressure on forests.

Finally, limiting deforestation is only one aspect of potential emission reduction schemes for Muaro Jambi. In fact, avoiding future deforestation accounts for only a small fraction of emission reduction when compared to reforestation or restoring peat lands. Because of the lengthy growth period required before a forest can be considered primary, models used in this project did not account for any reforestation of primary peat forest. Primary peat forests hold the largest carbon stock of any possible land use in the district; land management practices that would promote reforestation and allow secondary forest to mature to primary forest could help mitigate some of the long-term CO2 emissions that come from agricultural land use. Using lands with low carbon content, such as degraded forests, for agricultural use could also help to reduce future emissions.

Methane capture for energy generation from palm oil plantation waste also has potential to reduce the emissions impact of palm cultivation. However, insofar as additional returns from energy generation increase the returns from these plantations, it can put further pressure on land to convert to this use.

Communities in Muaro Jambi will need information and incentives to protect the peat forests that surround them. This includes greater awareness about the neighborhood effects of peat land exploitation, especially upon water resource flows that influence the risk of damaging fires and soil subsidence while providing opportunities for increased agricultural productivity.


References

Agus, F., E. Runtunuwu, T. June, E. Susanti, H. Komara, H. Syahbuddin, I. Las, and M. van Noordwijk. 2009.

Carbon Dioxide Emission in Land Use Transitions to Plantation. Jurnal Litbang Pertanian 28(4): 119-126.

BPS-Statistics of Muaro Jambi Regency. 2012. Muaro Jambi Regency in Figures. BPS Catalog No. 1102.1505.

Chadès, I., E. McDonald-Madden, M.A. McCarthy, B. Wintle, M. Linkie, and H.P. Possingham. 2008. When to stop managing or surveying cryptic threatened species. PNAS 105(37): 13936-13940.

Chen, P., J. Miettinen, S.C. Liew, and L.K. Kwoh. 2008. A Remote Sensing Case Study of Land Use/Land Cover Changes in the Peatlands of Muaro Jambi, Indonesia, Between 1989 – 2007. Centre for Remote Imaging, Sensing and Processing, National University of Singapore.

Hein, L., van Koppen, K., de Groot, R. S., and van Ierland, E. C. 2006. Spatial scales, stakeholders and the valuation of ecosystem services. Ecological Economics 57: 209-228.

Hooijer, A., S. Page, J.G. Canadell, M. Silvius, J. Kwadijk, H. Wosten and J. Jauhiainen. 2010.Current and future CO2 emissions from drained peatlands in Southeast Asia. Biogeosciences, 7: 1505–1514.

Interagency Working Group on Social Cost of Carbon, United States Government. 2013. Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf

Otham, H., A.T. Mohammed, F.M. Darus, M.H. Harun, and M.P. Zambri. 2011. Best Management Practices for Oil Palm Cultivation on Peat: Ground Water-Table Maintenance in Relation to Peat Subsidence and Estimation of CO2 Emissions at Sessang, Sarawak. Journal of Palm Oil Research 23: 1078-1086.

Page, S., A. Hoscilo, H. Wosten, J. Jauhaiainen, M. Silvius, J. Rieley, H. Ritzema, K. Tansey, L. Graham, H. Vasander, and S. Limin. 2009. Restoration Ecology of Lowland Tropicla Peatlands in Southeast Asia: Current Knowledge and Future Research Directions. Ecosystems 12: 888-905.

Parish, F., Sirin, A., Charman, D., Joosten, H., Minayeva, T., Silvius, M. and Stringer, L. (Eds.) 2008. Assessment on Peatlands, Biodiversity and Climate Change: Main Report. Global Environment Centre, Kuala Lumpur and Wetlands International, Wageningen.

Sastry, N. 2000. Forest Fires, Air Pollution, and Mortality in Southeast Asia. Rand DRU-2406-FF.

Schrier-Uijl, A.P., Silvius, M., Parish, F. Lim, K.H., Rosediana, S. and Anshari, G. 2013. Environmental and Social Impacts of Oil Palm Cultivation on Tropical Peat – A Scientific Review. Final Report. Roundtable on Sustainable Palm Oil.

Suyanto, S. B. Leimona, R.P. Permana, and F.J.C. Chandler. 2005. Review of the Development Environmental Service Market in Indonesia. World Agroforestry Centre.

Tacconi, L. 2003. Fires in Indonesia: Causes, Costs and Policy Implications. DIFOR Occasional Paper No. 38.

Van Beukering, P.J.H., S.J. Herman Cesar, and M.A. Janssen. 2003. Economic valuation of the Leuser National Park on Sumatra, Indonesia. Ecological Economics 44: 43-62.


Van Eijk, P. and P. Leenman. 2004. Regeneration of Fire Degraded Peatswamp Forest in Berbak National Park and Implementation in Replanting Programmes. Water for Food and Ecosystem Project on: Promoting the River Basin and Ecosystem Approach for Sustainable Management of SE Asian Lowland Peatswamp Forests.

Whiteman, A., and A. Fraser. 1997. The value of forestry in Indonesia. Indonesia-UK Tropical Forest Management Programme, Jakarta.

Prepared by a diverse team lead by Dr. Tulika Narayan. Team members included Dr. Elena Besedin, Matt Hyson, Jacqueline Haskell, Kelly Peak, Dr. Arief Wicaksono, Dr. Rizal Bahtiar, and several URDI staff.

Prepared for: Millennium Challenge Corporation 875 15th St., NW Washington, D.C. 20005

Submitted by: Abt Associates Inc. 4550 Montgomery Avenue Suite 800 North Bethesda, MD 20814 In Partnership with: URDI, Indonesia ICRAF, Indonesia

ecosystem valuation based strategic...

Documents