252
A. P. Sari et al.
Estimates of Restoration Costs
The second Indonesia’s Biannual Update Report (BUR) to the Paris Agreement
submitted by Indonesia in 2018 shows that the country requires about US$5.5 billion
until 2030 to finance activities to achieve the conditional emission reduction targets
in the forestry and other land use sectors and around US$2.2 billion in the agriculture
sector under the NDC (e.g. BRG 2016).
Few studies have tried to estimate funding needs for BRG to deliver its restoration mandate. These studies present facts that a substantial amount of funding gap
still remains to achieve BRG’s target. The World Bank estimates that an amount of
US$2 billion is needed to fund the 2 Mha restoration target (Beat 2016). Meanwhile,
Hansson and Dargusch (2018) find that a minimum amount of US$4.6 billion is
required to restore the 2.49 Mha BRG’s target (see Table 12.3). The existing funding
pledges from overseas governments and donors are still insufficient in narrowing
down the funding gap.
The figures presented by Hansson and Dargusch (2018) were mainly built upon
interviews and discussions with BRG’s technical staff and senior leaders. As such,
some suggest that the figures are too high—and indeed these are among the higher
estimates at the moment. As a result, BRG is currently reviewing these cost figures
and commencing a process that is expected to produce a better insight into not only the
costs of restoring peatlands but also the strategic means to close down the financing
gaps.
By now, the review process is still ongoing, and the figures are entirely preliminary, but a more realistic estimate has come closer. The review is carried out by
matching the license types of the land uses within the 2.5 Mha with two principal
indicators, namely peat ecosystem regulation and the peat burnt frequency. Based
on spatial analysis, it is found that the restoration targets are mainly concentrated in
private licensing areas such as industrial timber estate plantations (Hutan Tanaman
Industri—HTI) and business utilization rights (Hak Guna Usaha—HGU). Among
them, six concessionaire areas made up more than 84% of the total area within
the 2.5 Mha.
3 In the meantime, the remaining target is located under non-licensed
production and conservation areas.
The cost calculation is estimated based on the 3Rs (rewetting, re-vegetation, and
revitalization) intervention approach. Peat rewetting (R1) is implemented through
the construction of rewetting infrastructures such as canal blocking, canal backfilling, and deep well. Meanwhile, re-vegetation (R2) is carried out by providing
seedlings production and seed banks, seeds transplanting, enrichment planting as
well as promoting natural succession. Finally, revitalization of local livelihoods (R3)
is developed on three principal bases, namely those based on land, water, and environmental services. Apart from the 3Rs, other costs for socialization and educating
local people are also being considered.
3 Preliminary results to determine the costs required for BRG to fulfill its mandate in the 2.5 million
ha restoration area carried out by SystemIQ and Landscape Indonesia.
A. P. Sari et al.
Estimates of Restoration Costs
The second Indonesia’s Biannual Update Report (BUR) to the Paris Agreement
submitted by Indonesia in 2018 shows that the country requires about US$5.5 billion
until 2030 to finance activities to achieve the conditional emission reduction targets
in the forestry and other land use sectors and around US$2.2 billion in the agriculture
sector under the NDC (e.g. BRG 2016).
Few studies have tried to estimate funding needs for BRG to deliver its restoration mandate. These studies present facts that a substantial amount of funding gap
still remains to achieve BRG’s target. The World Bank estimates that an amount of
US$2 billion is needed to fund the 2 Mha restoration target (Beat 2016). Meanwhile,
Hansson and Dargusch (2018) find that a minimum amount of US$4.6 billion is
required to restore the 2.49 Mha BRG’s target (see Table 12.3). The existing funding
pledges from overseas governments and donors are still insufficient in narrowing
down the funding gap.
The figures presented by Hansson and Dargusch (2018) were mainly built upon
interviews and discussions with BRG’s technical staff and senior leaders. As such,
some suggest that the figures are too high—and indeed these are among the higher
estimates at the moment. As a result, BRG is currently reviewing these cost figures
and commencing a process that is expected to produce a better insight into not only the
costs of restoring peatlands but also the strategic means to close down the financing
gaps.
By now, the review process is still ongoing, and the figures are entirely preliminary, but a more realistic estimate has come closer. The review is carried out by
matching the license types of the land uses within the 2.5 Mha with two principal
indicators, namely peat ecosystem regulation and the peat burnt frequency. Based
on spatial analysis, it is found that the restoration targets are mainly concentrated in
private licensing areas such as industrial timber estate plantations (Hutan Tanaman
Industri—HTI) and business utilization rights (Hak Guna Usaha—HGU). Among
them, six concessionaire areas made up more than 84% of the total area within
the 2.5 Mha.
3 In the meantime, the remaining target is located under non-licensed
production and conservation areas.
The cost calculation is estimated based on the 3Rs (rewetting, re-vegetation, and
revitalization) intervention approach. Peat rewetting (R1) is implemented through
the construction of rewetting infrastructures such as canal blocking, canal backfilling, and deep well. Meanwhile, re-vegetation (R2) is carried out by providing
seedlings production and seed banks, seeds transplanting, enrichment planting as
well as promoting natural succession. Finally, revitalization of local livelihoods (R3)
is developed on three principal bases, namely those based on land, water, and environmental services. Apart from the 3Rs, other costs for socialization and educating
local people are also being considered.
3 Preliminary results to determine the costs required for BRG to fulfill its mandate in the 2.5 million
ha restoration area carried out by SystemIQ and Landscape Indonesia.