Incentives and disincentives for reducing emissions under REDD+ in Indonesia

Nurfatriani, Fitri and Salminah, Mimi and Cadman, Tim and Sarker, Tapan ORCID: (2018) Incentives and disincentives for reducing emissions under REDD+ in Indonesia. In: Pathways to a Sustainable Economy: Bridging the Gap between Paris Climate Change Commitments and Net Zero Emissions. Springer, Switzerland, pp. 191-207. ISBN 9783319677019


This chapter explores the fiscal incentives and disincentives that contribute either positively or negatively to reducing emissions from deforestation and forest degradation (REDD+) in Indonesia. Indonesia is an important participant in the UN Framework Convention on Climate Change programme on REDD+. The programme is funded through financial contributions from developed to developing countries, which can eventually be part of a country's nationally determined contribution to reducing emissions, either domestically, or via international emissions trading. Our study finds that there are a number of formal charges, fees and taxes that apply on forest-related activities in Indonesia, which are stipulated within regulations promulgated by various government departments. A range of informal subnational charges also apply to forest-related activities, which has often provided a monetary incentive for local government, especially forest-rich districts, to exploit their timber resources. However, this has been proven as a disincentive for REDD+ implementation in Indonesia. We also find that there is a need for improved financial governance in future fiscal policy reform, which should include the removal of perverse incentives for forest conversion, the equitable and accountable distribution of financial incentives, the prevention of corruption and fraud, and the strengthening of economic benefits for smallholders. We recommend that in implementing the REDD+, the Government of Indonesia should consider providing incentives for the nonexploitation of forests by businesses engaged in the provision of environmental services as well as carbon transactions. This could take the form of private investments, private-public partnerships or civil society engagement in forestry and land use change, and may include incentives such as payment for ecosystem services and for forest ecosystem restoration.

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Item Type: Book Chapter (Commonwealth Reporting Category B)
Refereed: Yes
Item Status: Live Archive
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Faculty/School / Institute/Centre: No Faculty
Faculty/School / Institute/Centre: No Faculty
Date Deposited: 03 May 2022 22:40
Last Modified: 26 May 2022 04:25
Uncontrolled Keywords: Climate change; Fiscal incentives and disincentives; Indonesia; REDD+
Fields of Research (2020): 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350201 Environment and climate finance
Socio-Economic Objectives (2020): 19 ENVIRONMENTAL POLICY, CLIMATE CHANGE AND NATURAL HAZARDS > 1903 Mitigation of climate change > 190301 Climate change mitigation strategies
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