1. OPPORTUNITY AND RISK
of REDD+, GREEN ECONOMY, AND
SUSTAINABLE DEVELOPMENT
Dr. Irfa Ampri
Center of Climate Change Financing and Multilateral Policy
Fiscal Policy Agency, Ministry of Finance
Jakarta, 25 July 2012

2. Outline
• The Future Economic and Development agenda
• New Business Opportunities
• Challenges (Risk)
• Risk Mitigation
• Conclusions

3. The Future Economic and Development Agenda
• REDD+
Rewarding actors that maintain and protect forests in both the forest area and
other land use area (Area Penggunaan Lain - APL)
– contribute significantly (85%) to achievement of national commitment (27/41)
• Green Economy (GE)
One that results in improved human well-being and social equity, while
significantly reducing environmental and ecological risks
• Sustainable development (SD)
Development that meets the needs of the present without compromising the
ability of future generations to meet their own needs (Economic Growth,
Environmental Aspect, Social Aspect)
• REDD+ correlates closely to the effective implementation of GE with
later contributing to the SD goals

4. New Business Opportunity
• If managed properly according to the country’s specific,
REDD+ and GE will not be the threats for the
achievement of national agenda (maintain high growth
and reduce poverty level)
– The issue is how to effectively use the resources availability in
order to compete with the traditional ways
• On the contrary, REDD+ and GE can provide new
economic and business opportunities while at the same
time conserve the environment and ecology
– Business providing added value and resource efficiency
• New industries and clean and renewable energy will arise

5. Global total New investment in clean energy, 2004–11
($bn) 5%
5%
$260bn
$247bn
31%
1%
22% $187bn $189bn
35% $153bn
51% $113bn
39% $0bn $0bn
$75bn $0bn
$54bn $0bn
$0bn
$0bn
2004 2005 2006 2007 2008 2009 2010 2011
Note: Includes corporate and government R&D, and small distributed capacity. Adjusted for
re-invested equity. Does not include proceeds from acquisition transactions Source: Bloomberg New Energy Finance

6. New Business Opportunity (Indonesia Case)
• New ways of doing business in forest areas and APL will reduce carbon
emission to 778.15 Million Ton CO2e by 2014.
– Assuming carbon price of US$4 per ton CO2e, new business in forestry
sector will produce revenues of USS 3.2 billions.
• 2% investment in green economy in Indonesia will provide 4,4-6,3 million
new job opportunity, in 5 years a head (report by Green and Decent Job dari
International Trade Union Confederation)
• Ecotourism can create jobs and provide revenue to support the conservation
of natural capital. Ecotourism in Indonesia is growing by 8% per yea
• Banning in exporting raw rattan and other forest raw materials will expand
and create industries providing value added with better price. At the same
time, reduce the exploitation of forest and ecology.

7. Estimate Carbon Credit
Carbon Value (assume
Emission US$4 per ton
No Activities/Targets Location
Reduction CO2e)
(Million Ton
(US$ million)
CO2e)
Penataan Batas Kawasan Hutan Seluruh
1 123.41 493.64
sepanjang 25.000 Km provinsi
2 HTI/HTR seluas 3 juta ha 26 provinsi 110.1 440.4
Lahan pertanian baru seluas
3 11 provinsi 103.98 415.92
325.000 ha
Optimalisasi Lahan gambut
4 terlantar dan lahan non tanaman 9 provinsi 100.75 403
pangan seluas 250.000 ha
Hutan Kemasyarakatan
5 (HKm)/Hutan Desa (HD) seluas 25 provinsi 91.75 367
2.500.000 ha
Kemitraan usaha dalam hutan
6 11 provinsi 9.18 36.72
rakyat seluas 250.000 ha
7 Kelapa sawit seluas 860.000 ha 19 provinsi 74.53 298.12
8 Karet seluas 105.200 ha 14 provinsi 2.38 9.52
9 Kakao seluas 687.000 ha 16 provinsi 5.42 21.68
Seluruh
Opportunity 10
Rehabilitasi lahan kritis pada DAS provinsi
71.71 286.84
prioritas seluas 1.954.000 ha kecuali DKI
and Risk Jakarta
Attachment 11
Ekosistem esensial sebagai
17 provinsi 41.5 166
penyangga kehidupan sebesar 10 %
forestry.docx konservasi dan perlindungan hutan
12 12 provinsi 49.77 199.08
pada 12 provinsi prioritas
2 provinsi:
REDD di kawasan konservasi
13 Jambi dan 3.67 14.68
(hutan gambut)
Kalteng
Total
788.15
3,152.60

8. Challenges (Risk)
• REDD+ and GE will threat the achievement of national development
goals
– of As developing Country ---- Grow now, clean up later (prefer short term
achievement > long term goal
– Some studies show that moratorium of new licenses for logging and plantation
brings negative economic impacts to certain local communities
• Sustainability of international commitment is not clear
o Grant, technology transfer, voluntary carbon market, and countries’
commitment in achieving emission reduction goals
• Sustainability of Government commitment:
o Moratorium, Financial support (BLU, K/L DIPA, grants), & Fiscal incentives
o Licensing for carbon businesses

9. Challenges (Risk continue..)
• The limitation of public funding
o Public funding to leverage private participation
• Private business involvement in green environment and forest
sectors are still limited
• Sustainability of local government support:
o Moratorium, Licensing for carbon businesses
o Benefit and incentives for local economy
• Mitigation of tenure conflict in degraded lands including peat lands
o Benefits and incentives for local community
o Protection for carbon businessmen
• The sustainability of carbon prices and participation parties

10. Risk Mitigation
• Change the culture from the recipient to the owner of REDD+
• 4 Pilllar of development strategy (pro growth, pro poor, pro job, pro environtment)
should work simultaneously and equally
• Prioritize education and R&D
• Manage appropriate public finance support (budget, fiscal incentives, and regional
Transfer)
• Provide a comprehensive incentive support for the participation of private and
financial sectors
• New institutions in managing REDD+ (REDD+institution and Dana Perwalian)
should show best practices and concerted collaboration with related parties
• Active participation in multilateral fora showing our best examples in attracting other
countries increase commitment
• Donors assistance is still relevant in the area where Indonesia has the limitation in
implementing REDD+ and GE

11. Conclusions
• REDD+ correlates positively with GE and SD
• REDD+ and GE will not be the threats for the achievement of
national agenda (maintain high growth and reduce poverty level)
• REDD+ and GE can provide new economic and business
opportunities while at the same time conserve the environment and
ecology
• Challenges in effective implementation of REDD+ and GE are
abundant, and can be mitigated through, among others, change the
culture, education, sustainability of public finance, improvement of
investment climate for private and financial institution
participation, and active diplomacy in international fora

12. THANK YOU