Improving Economic Solutions for Tropical Peatland Restoration
1. IMPROVING ECONOMIC SOLUTIONS FOR
TROPICAL PEATLAND RESTORATION
- FORMATION OF TROPICAL PEAT ASSOCIATION
Chris Cheng Chin Hsien (Jul 2016)
Advisor to People’s Movement to Stop Haze (Singapore)
Climate Envoy for Oscar M.Lopez Center (Regional, based in Philippines)
Climate Reality Leader (International, chaired by Al Gore)
2. CRISIS DRIVEN MARKET & POLICY
TRANSFORMATION
EXPECTED STRONGER POLICY AND MARKET
TRANSFORMATION ON PEATLAND MANAGEMENT
PAST EXPERIENCE
GLOBAL WARMING & CLIMATE CHANGE PARIS AGREEMENT
2015 HAZE PEATLAND RESTORATION AGENCY & BAN ON NEW PALM OIL & MINING CONCESSIONS
SCIENCE PREDICTION
EXPECTED ACCELERATION OF GLOBAL WARMING DURING THE COMING DECADES (WORSE THAN IPCC
PREDICTION)
EXPECTED CHALLENGE OF PEATLAND MANAGEMENT DUE TO LONGER DROUGHT AND HEAVIER FLOOD
3. WHICH HAS HIGHER CARBON INTENSITY
(CARBON EMISSION / REVENUE) ?
Growing acacia (for paper) on tropical
peatland with no fire but requires drainage
Burning coal for power generation
4. Oil Palm Acacia crassicarpa
Factors
CO2e/$ Scenario
Factors
CO2e/$ Scenario
Fire-free Total emission with Fire Fire-free Total emission with Fire
High
revenue
Low
revenue
Low
(2013)
High
(2014)
Extreme
(2015)
High
revenue
Low
revenue
Low
(2013)
High
(2014)
Extreme
(2015)
Emission per hectare oil palm
plantation (ton CO2e/ ha/
year)
40 40 48 71 83
Emission per hectare acacia
plantation (ton CO2e/ ha/
year)
73 73 83 122 165
Yield (ton palm oil / ha) 5 4 4 4 4
Yield (m3 acacia wood / ha /
year)
23.2 18.4 20.8 20.8 20.8
Yield (ton palm kernel oil /
ha)
0.6 0.5 0.5 0.5 0.5
Yield (ton palm kernel cake /
ha)
0.6 0.6 0.6 0.6 0.6
Market Price (US$/ ton palm
oil)
1,000 500 700 700 700
Market Price (US$/ m3 acacia
wood)
180 180 180 180 180
Market Price (US$/ ton palm
kernel oil)
1,500 800 1,300 1,300 1,300
Market Price (US$/ ton palm
kernel cake)
400 50 200 200 200
Associated revenue per
hectare (US$/ ha/ year)
6,140 2,430 3,570 3,570 3,570
Associated revenue per
hectare (US$/ ha/ year)
4,176 3,312 3,744 3,744 3,744
Emission per associated
revenue (ton CO2e/
million US$)
6,515 16,461 13,445 19,888 23,249
Emission per associated
revenue (ton CO2e/
million US$)
17,481 22,041 22,169 32,585 44,071
Images of drained peatland
for oil palm (left), acacia
(middle), and peat-fire
causing transboundary haze
in 2015 (right)
Allegheny * (worst S&P 500
coal fired utility company)
15,142
Average coal power plant
(Indonesia tariff) ^
~10,000
5. Hotspot Intensity = number of MODIS hotspot (>25% confidence level) per 100 km2
Year
HTI
concessions
Oil Palm
concessions
RSPO
concessions
*
Logging
concessions
Other
Use
Peatland Area
(million ha)
2.2 2.4 0.11 1.4 9.1
On Peatland
2013 17 14 2 1 8
2014 49 31 10 4 20
2015 63 30 20 7 34
Mean 43 25 11 4 21
On mineral Soil
2013 2.7 2.0 0.3 0.8 -
2014 4.6 3.8 0.7 1.0 -
2015 9.3 5.9 2.0 2.2 -
Mean 5.6 3.9 1.0 1.3 -Indonesia’s hotspot intensity for industrial tree planting concessions (HTI), oil palm concessions, RSPO concessions, logging concessions, and other
use, on peatland and on mineral soil.
* Georeferenced formatted RSPO concessions are not available; hence the RSPO peat area and hotspot intensity may be with certain error (likely < 30%).
6. MOST BURNT PEATLAND WILL BE RESTORED BY
BADAN RESTORASI GAMBUT (PEATLAND RESTORATION AGENCY)
7. HOW’S ABOUT EXISTING HTI PLANTATIONS?
Industrial Tree Plantation
(HTI) Group
Concession
Area (km2)
Area on
Peat (km2)
% peat /
total
concession
area
Number of MODIS 5
hotspot
Hotspot Intensity (per
100 km2)
tons CO2e / ha total
concession (2015)
US$ revenue / ha
total concession
ton CO2e /
million US$
wood revenue2013 2014 2015 2013 2014 2015 peat fire Total mineral peat
Sinar Mas / APP 29,200 11266
39% (54%
in Sumatra)
2098 8147 15585 7.2 27.9 53.4 14 78 92
$
1,150
$
722
49,010
RGE / APRIL, Toba, Uniseraya 15,900 5634
35% (63%
in Riau)
2108 3411 1461 13.3 21.5 9.2 13 13 26
$
1,209
$
663
14,051
Marubeni Corp/Inhutani V JV 4,350 7 0.2% 117 454 1125 2.7 10.4 25.9 0 <38 38
$
1,869
$
3
<20,134
PT. Permata Wana Timur
Lestari
2,400 78 3.3% 59 215 613 2.5 9.0 25.5 1 37 38
$
1,811
$
61
20,487
Medco 1,690 149 8.8% 26 242 344 1.5 14.3 20.4 3 30 33
$
1,707
$
165
17,541
PT. Korintiga Hutani 1,618 404 25.0% 26 289 1192 1.6 17.9 73.7 9 107 116
$
1,405
$
467
62,133
PT. Mayawana Persada 1,360 652 47.9% 58 59 57 4.3 4.3 4.2 17 6 24
$
975
$
897
12,605
PT. Mayangkara Tanaman
Industri
1,014 573 56.5% 49 85 96 4.8 8.4 9.5 21 14 34
$
814
$
1,058
18,377
Inhutani I - V 5,350 18 0.3% 121 269 757 2.3 5.0 14.1 0 <21 21
$
1,866
$
6
<11,064
Barito Pacific 2,180 0 0.0% 323 174 286 14.8 8.0 13.1 - <19 19
$
1,872
$
-
<10,198
Korindo 1,190 0 0.0% 10 71 170 0.8 6.0 14.3 - <21 21
$
1,872
$
-
<11,104
PT. Kertas Basuki Rahmat 1,010 9.5 0.9% 33 147 100 3.3 14.6 9.9 0 <14 15
$
1,854
$
18
<7,879
Calon Areal Iuphhk-Ht 10,500 49 0.5% 202 478 972 1.9 4.6 9.3 0 <13 14
$
1,863
$
9
<7,287
9. 0.00
0.25
0.50
0.75
1.00
End of 2013 End of 2014 End of 2015 Now in Process
When “Grid
Parity”
happens in
the Chilean
Solar Market
TotalInstalledSolar(Gigawatts)
11 MW
402 MW
848 MW
10. 0.00
0.25
0.50
0.75
1.00
End of 2013 End of 2014 End of 2015 Now in Process
11 MW
402 MW
848 MW
9.25
9.50
9.75
9.00
10.00
When “Grid
Parity”
happens in
the Chilean
Solar Market
TotalInstalledSolar(Gigawatts)
Chile has an additional
10 GW
of solar projects approved or
under construction.
11. ECONOMIC DRIVEN MARKET TRANSFORMATION?
MARKET LEADERS ON WET-PEATLAND ECONOMICS
PAST & CURRENT EXPERIENCE
GRID PARITY FAST TRANSITION FROM FOSSIL FUEL TO RENEWABLE POWER
R&D + DEMONSTRATION ON IMPROVED ECONOMIC SOLUTIONS FOR WET-PEATLAND
I) IMPROVE PALUDICULTURE PRACTICE & COMMUNITY LIVELIHOOD
II) IMPROVE DOWNSTREAM PROCESS INTEGRATION
III) IMPROVE MARKET RECOGNITION & ATTRACT INVESTMENT
COPY
17. VALUE-ADDED FOOD PROCESSES
IMPROVE ECONOMIC BENEFIT
KUEH, BISCUITS, DESSERTS, AND
MORE…
IMPROVING DOWNSTREAM PROCESS
INTEGRATION
STARCH, NUTS, OIL, FRUITS, MUSHROOM,
HONEY DIVERSIFY FOOD CROPS IMPROVE
SOCIAL BENEFIT & FOOD SECURITY
(ALTHOUGH INDONESIA IS A MAJOR FAT
EXPORTING COUNTRY, IT IS STILL A NET
IMPORTER OF CARBOHYDRATE FOOD)
WOOD, FIBRE, LATEX + PLASTIC BIOCOMPOSITE
MATERIAL ?
RAW MATERIALS ARE NOT LIMITED TO PEATLAND
18. IMPROVING MARKET RECOGNITION &
ATTRACTING INVESTMENT
SUSTAINABL
E
CHALLENGES:
1. THERE IS NO CROSS-CUTTING
STANDARD ORGANIZATION CERTIFY
WET-PEAT FRIENDLY PRODUCTS
2. MOST PEOPLE IN THE WORLD IS
UNAWARE ABOUT THE
ENVIRONMENTAL DAMAGE BY PEAT
DRAINAGE
3. SOME SUSTAINABLE STANDARD
ORGANISATIONS STILL CERTIFY
PRODUCTS FROM DRAINED
PEATLAND
4. DISINCENTIVE MECHANISM AGAINST
PEATLAND DRAINAGE IS NOT WELL IN
PLACE
19. TROPICAL PEAT ASSOCIATION
THREE TASKFORCES
I) IMPROVE PALUDICULTURE PRACTICE & COMMUNITY LIVELIHOOD
ORGANIZATIONS:
INDIVIDUAL RESEARCHERS:
II) IMPROVE DOWNSTREAM PROCESS INTEGRATION
ORGANIZATIONS:
INDIVIDUAL RESEARCHERS:
III) IMPROVE MARKET RECOGNITION & ATTRACT INVESTMENT
ORGANIZATIONS:
INDIVIDUAL RESEARCHERS:
ID #3735.MET - Can be used in noncommercial online and TV broadcasts of your presentation, but not modified.
Grid parity means there’s a line where the cost of solar electricity is cheaper than that of coal, even if you take into account that the sun isn’t shining all the time. Like the difference between zero and one degree Celsius; between ice and water. That line represents the difference between markets that are frozen and those where capital flows liquid into investments. We are crossing that threshold.
DESCRIPTION: Image of ice cubes and cold water illustrating the difference that a single degree can make
ADDITIONAL TALKING POINTS: The analogy between ice and cold water is useful for conceptualizing the idea of economic “tipping points”. Despite being separated by only one degree, the two forms of water are in completely different states. A similar large-scale change in state can occur in economies when the cost of a new technology falls low enough to compete with more-established technologies.
ID #3778 - Can be used in noncommercial online and TV broadcasts of your presentation, but not modified.
In one year they reached 400 MW, at the end of last year they had almost 850 MW. They signed new contacts and look at what the nation of Chile is doing…
DESCRIPTION: Graph showing the growth of solar power in Chile in megawatts of capacity, 2013-2015
ADDITIONAL TALKING POINTS: According to the Chilean government’s renewable energy department (CIFES—Centro Nacional para la Innovación y Fomento de las Energías Sustentables), Chile registered 402 megawatts of solar photovoltaics capacity in 2014, an astounding jump in capacity compared to the previous year.* They installed more than twice as much solar capacity in 2015 as they did in 2014, reaching a total of 848 MW installed solar photovoltaic capacity!***
Why is solar taking off so suddenly in Chile? The country has a number of characteristics that are driving this rapid growth, including a need for new electricity supply, high marginal power prices, strong solar insolation levels (i.e., a lot of sunlight), a transparent power market, clear regulations, and a mandatory target for renewable energy generation. These factors are converging to create a highly attractive market.**
REFERENCES:
* Diana Hristova, “Chile Reaches 400 MW of Solar Power at End-2014,” Seenews, January 16, 2015. http://renewables.seenews.com/news/chile-reaches-400-mw-of-solar-power-at-end-2014-458839
** Adam James, “3 Charts that Explain Why Obama is Talking About Chilean Solar,” GreenTech Media, July 17, 2014. http://www.greentechmedia.com/articles/read/3-charts-that-explain-why-obama-is-talking-about-chilean-solar?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GreentechMedia+%28Greentech+Media%29
*** Joshua Hill, “2015 Solar Installation Figures Continue Rolling In: Algeria and Chile,” CleanTechnica, January 19, 2016. http://cleantechnica.com/2016/01/19/2015-solar-installation-figures-continue-rolling-algeria-chile/
ID #3779 - Can be used in noncommercial online and TV broadcasts of your presentation, but not modified.
…it is so good, and affordable, and easy. No fuel costs, no pollutions to foul the air. Absolutely astonishing...they have 10GW in the pipeline to be built. Many other small nations are awakening to the promise of solar PV and wind. Coupling this cheap energy with batteries is going to be transformational.
DESCRIPTION: Animated graph showing the rapid expansion of the Chilean solar market
ADDITIONAL TALKING POINTS: Installed solar photovoltaic (PV) capacity in Chile has shown enormous growth over a very short period of time. Installed solar PV capacity in the country was near 848 megawatts at the end of 2015 and is expected to grow to approximately 10 gigawatts based on approved projects that are currently in the pipeline.*
REFERENCES:
* Joshua S. Hill, “2015 Solar Installation Figures Continue Rolling In: Algeria & Chile,” Clean Technica, January 19, 2016. http://cleantechnica.com/2016/01/19/2015-solar-installation-figures-continue-rolling-algeria-chile/
