by Dyah Puspitaloka and Yeon-Su Kim Tropical peatlands holds 15-19% of global peat carbon with Indonesia as the largest contributor. However, many of Indonesia's peatlands are degraded into fire-prone and non-forest vegetation. Indonesian government is trying to restore these degraded peatlands within five years. There are also several peatland restoration projects carried out by private companies and non-governmental organizations with public and private investments. However, time required for peatland restoration will vary from a few years to more than a decade depending on the damage level and for that, restoration efforts will need to be sustained beyond project durations. Thus, it is important to assess restoration practices being implemented by different types of project proponents, and analyze their costs and effectiveness. These aspects have been rarely studied, and will be the focus of this study. Using peatland restoration projects in central Kalimantan as case studies, we will assess three different types of peatland restoration projects for 1) different restoration goals and strategies of project proponents; 2) different time required for peatland restoration and its cost-implications; 3) total restoration costs, including indirect costs (i.e. opportunity costs) and direct costs, and their temporal and social distributions. Results of this study can help design future peatland restoration projects in Indonesia. Oral Presentation at Society of American Foresters National Convention, Albuquerque, November 18, 2017

1. Video: Dyah Puspitaloka
This study is funded by USAID (United States Agency for International Development)
& CIFOR (Center For International Forestry Research) through Master Degree
Fellowship Program and the School of Forestry, Northern Arizona University.
THE ECONOMICS OF PEATLANDS
RESTORATION
IN CENTRAL KALIMANTAN, INDONESIA
Dyah Puspitaloka and Yeon-Su Kim
SAF National Convention, Albuquerque, NM November 18, 2017

2. Photo: Dyah Puspitaloka
• Introduction
• Methods
• Preliminary result and
discussion
• Recommendation
Outline

3. What is peat?
Why is it important?
Photo: Dyah Puspitaloka
Introduction

4. This video also available at: https://youtu.be/MbSw5qSRnJw

5. Photo: NASA image Jeff Schmaltz (LANCE MODIS Rapid Response) and Adam Voiland (NASA Earth
Observatory). Caption by Adam Voiland.
• Indonesia pledged to reduce GHG
emission by 26% and up to 41% with
international support against BAU by
2020
• Forest and peat fires in Indonesia
emitted 1.5 billion metric tons CO2
(Field et al. 2016)
• President Joko Widodo formed Peat
Restoration Agency. Peatland
restoration projects were initiated in
several locations at Indonesia.
2009
2015
2016

6. “Ecological restoration is a process of assisting
the degraded, damaged, or destroyed
ecosystem”
—Society for Ecological Restoration (2004)

7. Source: Higgs (1997)
Expanded Conception of Ecological Restoration

8. Knowledge Gap
Peatland restoration projects are being carried out with:
• No clearly defined shared goals;
• Limited consideration of various costs, both direct and indirect;
• No clear consideration of social distribution of costs and benefits;
• No clear plan to sustain the restoration efforts beyond the project
duration.
*Indirect costs may include opportunity costs and costs in addressing
socio-economic challenges.

9. Questions
1. What are the stated goals of different restoration project?
2. What are the planned activities and their durations (planned vs.
necessary)?
3. What are the direct and indirect costs of peatland restoration?
4. How are these costs distributed temporally and socially?

10. Methods
Study area:
Actors Project Location
1. Government & partners Pulang Pisau District
2. Non-Governmental Organization (NGO) Sebangau National Park (Pulang Pisau, Katingan
and Palangkaraya District)
3. Private sector & university East and South Barito District
4. Private sector & NGO Katingan and East Kotawaringin District

11. Legends
Peatlands1
Crowdsource fires and burn scars2
Study visit and interview
Source:
1Indonesia Ministry of Agriculture. 2012. Indonesia peat
lands. Accessed through Global Forest Watch on Nov
13,2017. www.globalforestwatch.org
2Tomnod, Digital Globe and GFW Fires Crowdsourced
active fires and burn scars. Accessed through Global Forest
Watch Fires on Nov 13, 2017. www.globalforestwatch.org
3Global administrative area. No date. Indonesia
administrative area. Accessed through Global administrative
area on Nov 13, 2017. www.gadm.org

12. Data Collection:
• June-August 2017
• Site visit to 4 restoration projects
• Interview with 47 key-informants from
governments, NGOs, communities, private
sectors, and a local university.
• Compiled 18 published and unpublished plans
and reports.
Plan:
January 2018 - On-line survey for estimating project
costs.
Analysis:
• Qualitative analysis and content analysis using
NVivo software.
• Analysis of costs, their components and temporal
and social distribution.
Photo: Yeon-Su Kim
Photo: Yeon-Su Kim

13. Preliminary results & discussion
Drivers and impacts of degradation
Timber concession era
• Built manmade ditch
to transport the log
Forest conversion to
other land use
• Plantation
• Residential areas for
trans-migrants
1970 & 1980 1996 2000
1997/1998 2002 20151982/1983 1987 1991 1994 2006
Forest and peat fires
Source: Cahyono et al. (2015) and data from interview
Mega Rice Project
• Attempt to convert 1
million ha of peatland to
rice field by draining
• Failed and then
abandoned
Open access
• Timber concession era ends
• Dried and degraded peatland
become prone to fires
• Communities continue to use
and/or build the manmade
ditch

14. Preliminary results & discussion
Restoration Proponents
and Their Stated Goals

15. NGO
GOVERNMENT
+ PARTNERS
PRIVATE
SECTOR A +
NGO
PRIVATE
SECTOR B +
UNIVERSITY
Land Class Forest estate. Forest estate
and non-forest
estate.
Forest estate. Forest estate.
Length of
Restoration
(Planned)
11 years (to be
continued).
5 years. 60 years. 25 years.
Funding
source
• NGO.
• Grants.
• Central
government
budget.
• Grants.
• Investors.
• Carbon
trading.
• Investors.
• Carbon trading.
• Grants
(indirect).

16. NGO
GOVERNMENT +
PARTNERS
PRIVATE SECTOR
A + NGO
PRIVATE SECTOR
B + UNIVERSITY
Restoration
Goal
• Reduce peat
drainage and raise
the groundwater
level
• Restore the
peatland
ecosystem
• Reduce poverty of
several thousand
families
• Enhance
livelihoods with
income generating
measures.
• Peatland
ecosystem that
support
sustainable
development of
Indonesia that
sovereign,
independent and
mutual
cooperation.
• Restore
ecological
functions of
tropical peatlands
• Increase carbon
sequestration and
storage; and
sustainable forest
products
• Restoration and
sustainable
natural resource
management.
• Restore forest
condition,
ecosystem and
function.
• Sustainable and
professional forest
management.
• Carbon trading
• Community
welfare.
Planned
Activity
• Rewetting
• Revegetation/ replanting
• Revitalization of livelihood

17. Photo: Yeon-Su Kim
Conduct study and mapping
Free, Prior & Informed Consent
(FPIC)
Construction or other programs
Monitoring & patrol
Overview of restoration activity process
“… it [the community
participation] is important
to maintain [restoration]
facilities that we have
built.”
— Respondent from a government agency
July 6 2017.

18. Preliminary results & discussion
Challenges and Opportunities
of Restoration

19. “…[the illegal logging] still occur… not only
taking ramin (Gonystylus bancanus — valuable
hardwood species), but [they also] taking invaluable
tree. … last April we found a thousand timber
transported outside the company area illegally and
we reported to the law enforcement of Ministry of
Environmental and Forestry. …”
—A respondent from a local university partner with a private
sector, July 26, 2017
Social Challenges

20. “… three, three days later [after built the facility],
their (restoration) facility broke, it’s not because
the canal blocking construction was not strong
enough. It’s because the community did not
understand [about restoration]… because it’s
inhibit their livelihood…”
—A respondent from an NGO, June 19, 2017
Social Challenges

21. NGO GOVERNMENT +
PARTNERS
PRIVATE SECTOR
A + NGO
PRIVATE SECTOR
B + UNIVERSITY
Challenges • Active
settlement
area.
• Community
acceptance.
• Regional
government
spatial
planning.
• Maintenance
of restoration
facility.
• Institutional
complexity
• Asymmetric
information
• Reformation in
institution
• Community
acceptance.
• Maintenance of
restoration
facility.
• Illegal logging
• Community
acceptance
• Unclear revenue
• Illegal logging
• Community
acceptance
• Unclear revenue
• Community
livestock
management.

22. NGO
GOVERNMENT +
PARTNERS
PRIVATE SECTOR
A + NGO
PRIVATE SECTOR
B + UNIVERSITY
Opportunities • Ecotourism
• Approach to
bureaucracy
and religion
leader
• Trees adoption
• Trust fund
• Other parties
involved in
planting
program
(different
project, same
place)
• Support from
government.
• Mainstreaming
restoration in
regional and local
level.
• Free, prior,
informed,
consent.
• Clear boundaries.
• Well-developed
management.
• Inventory and
report.
• Community +
community
business
development.
• Collaboration with
local university.
• New silvicultural
methods.
• Technology in
forest patrol.

23. Preliminary results & discussion
Components of Direct and Indirect Costs
of Restoration

24. Direct & Indirect Costs of Restoration
Direct costs:
• Usually easily to be traced.
• Accommodate within projects’ plan.
• Mostly consists of operational and construction costs.
Indirect costs:
• Usually left out from calculation.
• May include opportunity costs and costs in addressing socio-
economic challenges.
Preliminary result: general identification of direct and indirect costs.
Plan: on-line survey for costs on January 2018.

25. Fixed Costs Variable Costs
Business license fee -
Baseline inventory costs -
Operational costs Transportation costs
Pre-construction study costs -
Community outreach (for agreement of
restoration construction) costs
-
Construction costs of restoration facility -
Community outreach program costs -
Revegetation costs -
Other program costs -
Post-construction study costs/
monitoring
-
Forest patrol -
Direct Costs

26. Fixed Costs Variable Costs
- Additional community outreach
- Maintenance of restoration facility and
or rebuild
- Additional revegetation
- Law enforcement
Indirect Costs

27. Photo: Dyah Puspitaloka
Recommendations
Community engagement:
• Mainstream peatland restoration in community level;
• Special consideration for communities in buffer areas and their
needs
Institutional alignments:
• Align planning efforts across governments to accommodate and
prioritize restoration (e.g. regional planning).
• Use existing national mapping tools and data sharing portal to
monitor the progress (e.g. one map policy).
Economic considerations:
• Develop mechanisms to increase participation of donors and
private investments;
• Use carbon trading as a stimulus for sustaining peatland
restoration.

28. THANK YOU
Photo: Dyah Puspitaloka