Abstract

International initiatives for reducing carbon emissions from deforestation and forest degradation (REDD+) could make critical, cost-effective contributions to tropical countries’ Nationally Determined Contributions. Norway, a key donor of such initiatives, has a REDD+ partnership with Indonesia, offering results-based payments in exchange for emissions reductions calculated against a historical baseline. Central to this partnership is an area-based Moratorium on new oil palm, timber and logging concessions in primary dryland and peat-land forests. We evaluate the effectiveness of the Moratorium between 2011 and 2018 by applying a matched triple difference strategy to a unique panel dataset. Treated dryland forest inside Moratorium areas retain at most, an average of 0.65% higher forest cover com-pared to untreated dryland forest outside the Moratorium. By contrast, carbon-rich peatland forest is unaffected by the Moratorium. Cumulative avoided dryland deforestation from 2011until 2018 translates into 61.7-87.1 million tons of emissions reductions, implying an effective carbon price below Norway’s US$5 per ton price. Based on Norway’s price, our estimated cumulative emissions reductions are equivalent to a payment of US$308.4-435.6 million. Annually, our estimates suggest a 3-4 percent contribution to Indonesia’s NDC commitment of a 29% emissions reduction by 2030. As reducing emissions from deforestation is critical for meeting this commitment, REDD+ outcomes could be improved by expanding the Moratorium and reforming its incentives and institutional arrangements, particularly in peatland forest areas.

Title: Carbon emissions reductions from Indonesia’s REDD+ Moratorium are cost-effective yet contribute little to Paris commitments
Speaker: Ben Groom, University of Exeter and London School of Economics and Political Science, UK
Moderator: Johannes Emmerling, RFF-CMCC European Institute on Economics and the Environment, Italy