The Potential for REDD+ in Peatland of Central Kalimantan, Indonesia

This chapter investigates the potential for REDD+ in peatland of the Central Kalimantan Province of Indonesia, where a large peatland area captures substantial amounts of carbon. We briefly review the key features of REDD+ that have been discussed in international negotiations as well as evaluate the estimated break-even prices for emission reductions through forest conservation. On the basis of estimation results, we conclude that, while REDD+ would be potentially beneficial for mitigating global climate change as well as beneficial to the local community, many issues need to be better understood before arriving at a workable institutional designs. Our estimates for the Central Kalimantan case show that the break-even price for carbon is USD 15.45 per ton of carbon, which is far below the average price of carbon credits in 2009. This figure would be reduced to USD 0.71 per ton of carbon, when we include carbon captured in peat. On the other hand, the break-even price becomes much higher than the price of the carbon credits when we consider the possibilities of oil palm plantations. We also discuss the significant roles of economic and noneconomic incentives in successfully implementing REDD+ thorough the households’ fire prevention activities.