Sustainable Palm Oil on Low Carbon Degraded Land in Indonesia

Project POTICO: Sustainable Palm Oil on Low Carbon Degraded Land in Indonesia

Diverting oil palm plantations onto degraded lands in Indonesia to combat illegal logging, protect the environment, and create sustainable livelihoods.

http://www.projectpotico.org

Indonesia’s tropical forests are being cleared at a record rate, with oil palm plantations emerging as a major threat. One consequence of this deforestation is that Indonesia is now, according to some estimates, the third largest global emitter of greenhouse gases. Although the country may have 15-20 million hectares of degraded land, oil palm—as well as timber and rubber—plantations continue to push into virgin forests.

• Read our Frequently Asked Questions about Project POTICO

In partnership with NewPage Corporation, WRI is spearheading a new project in Indonesia called “POTICO” to curb new oil palm plantations from clearing virgin or primary forests. The project will convene and lead a number of partners to implement land swaps that divert planned oil palm plantations onto degraded lands and bring the forests that were slated for conversion into sustainable management. The strategy would relieve pressure on virgin forests and curb illegal logging. As a result, the strategy would reduce greenhouse gas emissions, conserve the country’s biodiversity, and enhance sustainable livelihoods of local people.

Dilemma: Deforestation and Development

Spanning 90 million hectares, the forests of Indonesia constitute 10 percent of the world’s remaining tropical forests and provide people with a variety of benefits or ecosystem services. For instance, local communities rely on the forests for food, medicine, freshwater, and building material. The global community relies on them for carbon sequestration, timber, and tourism. In addition, the forests of Indonesia are a biodiversity “hotspot,” with new species discovered every year.

The expansion of oil palm plantations into Indonesia’s forests has led to biodiversity loss and greenhouse gas emissions of global significance. At the same time, continued expansion of oil palm plantations will be necessary to meet rising demand for palm oil and to fulfill Indonesia’s production and poverty alleviation goals.
The planted area of oil palm plantations in Indonesia has increased from about 600,000 hectares (ha) in 1986 to 6 million ha in 2006, with a total of almost 20 million ha planned by 2020. If past patterns continue, the majority of expansion will likely occur at the expense of forests. Many oil palm plantations are already planned on forested land.
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Indonesia’s Degraded Land: A Missed Opportunity?

At the same time, Indonesia has millions of hectares of “degraded land” —areas cleared of forests long ago and now containing low biodiversity and low carbon stocks. If the plantations currently planned on forests were instead diverted to this degraded land, oil palm expansion could continue but significant deforestation, biodiversity loss, and greenhouse gas emissions would be avoided.
Oil palm companies, however, face four obstacles to successfully diverting planned oil palm plantations away from forests and onto degraded lands:

• Technical. There is no publicly available, systematic methodology for identifying degraded land that is biophysically suitable, economically viable, and socially available for sustainable oil palm expansion. Companies lack coherent guidance on what constitutes land suitable for sustainable expansion, stemming from an absence of agreement on a common definition of “degraded” among various interest groups.
• Legal. In many areas, physically degraded land is legally classified as “forest” and therefore is unavailable for agricultural expansion, while forested land is legally classified as “non-forest” and therefore is at risk of conversion.
• Social. Oil palm plantation projects face high risk of costly social conflict due to land tenure issues. This is especially a problem on degraded lands which tend to have more claims than forested areas.
• Financial. Many companies already have concessions to clear forest for oil palm, and forgoing this conversion represents a significant opportunity cost, particularly in cases when the company expected to generate income from the sale of timber that is cleared during plantation establishment. These companies will likely require a financial incentive to change their expansion plans.

Proposed Solution: Project POTICO

Project POTICO links the expansion of sustainable palm oil onto degraded land with avoided deforestation through land swaps. This ensures that oil palm plantations can keep expanding to meet demand—generating local revenues and jobs—while halting deforestation. POTICO harnesses a combination of sustainable revenue streams— e.g. certified palm oil, certified timber, carbon offsets, or other locally appropriate options—to demonstrate the financial viability of this model for developing plantations.
Project POTICO consists of implementing pilot POTICO deals on the ground, and taking the concept to scale by promoting replication.
A POTICO deal diverts a planned oil palm plantation from forest onto degraded land and ensures the sustainable management of the forest previously slated for conversion.
Under a POTICO deal, WRI will partner with a private company with a concession on forested land that has committed not to convert the forest. Instead the company will establish a plantation on a similarly-sized piece of degraded land and pursue certification from the Roundtable on Sustainable Palm Oil. WRI and partners will assist the company in identifying degraded land suitable for sustainable palm oil production, facilitate the process of gaining free prior and informed consent (FPIC) of local people, and engage relevant local and national government officials. For the forest previously slated for conversion, WRI will work with the company to design and implement a locally appropriate business plan to ensure it remains managed as forest.
In addition to facilitating individual POTICO deals, WRI will work with partners to conduct research and other activities to enable others to replicate the concept. These activities include mapping degraded land, legal analysis, documentation of free prior and informed consent process, capacity building for local government officials on land use planning, policy analysis, and engagement with government officials and industry groups.