For Indonesia, the key to reaching economic prosperity is by using its forest resources. At the same time, Jakarta has stated the government’s commitment to reduce 26% of its greenhouse gas emission by 2020. Keeping forests alive is the best way to achieve that.

For over 40 years, Indonesia has been relying its national income from natural resources. According to Daju Pradnja Resosudarmo, a researcher on forestry governance from the Centre for International Forestry Research (CIFOR),  around 70% of Indonesia’s non-tax revenue comes from natural resources.

The efforts to keep forests alive are facing stiff competition from the flurry of activities surrounding mining and oil palm industry. Daju mentions the increasing trend of expansion in mining activities and oil palm plantations. Oil palm plantations needed land converted from forests. Coal deposits are also mostly stored in forest lands in Borneo.

Both of these industries are backed with a steady flow of foreign investors, low interest rates from banking institutions, and relatively cheap tax on land. Put all these factors together, it’s a no-brainer. Keeping forests dead is still the more profitable option than keeping forests alive.

The way Daju puts it, “Other development sectors are heavily subsidised. If governments make land more expensive, then it lessens the competition on forest land. Therefore the government should start subsidising more environmental projects.”

Indonesia has expressed interest in an economic scheme called REDD or Reducing Emissions from Deforestation and Forest Degradation. The scheme obliges forest-owning developing countries to keep their forests intact. In return, developed countries would pay financial incentives to ecosystem services from the forests of developing countries. Unfortunately for the last five years countries have yet to agree the financial mechanism of the REDD scheme.

In order to benefit from this scheme, Indonesia would need to proof that they really can protect their forests from degradation or excessive logging. Unfortunately, deforestation rates in Indonesia continues to be high. Daju mentions five main factors contributing to the high rate of deforestation, one of them is administration.

In 2010, President Susilo Bambang Yudhoyono has stated a moratorium on granting new licenses to manage primary natural forests and peat lands for the next two years. Although this does not apply to existing licenses.

Forests cover 70% of Indonesia’s land area. All of those forests areas are state-owned. However, a decentralisation programme is returning forest management back to local and regional government. This situation creates many overlapping licenses of forest land management. The five-year political cycle also creates a problem. After the election of regional leaders, there appears to be a trend of issuing new forest licenses to party donors.

Indonesia is now facing a dilemma. On one hand, there is an international commitment and (promises of) economic incentives when forests are protected. On the other hand, forests and its services are still one the country’s main income. The country also has to fulfill its projected growth of 7 percent by 2014.

After decades of relying on its natural resources to build its economic power, Indonesia is now faced with the challenge of thinking about other sources of income.

Chief of the Presidential Work Unit for Development Monitoring and Control Kuntoro Mangkusubroto acknowledges this. As of September 2010, he has also been chairman of REDD+ task force. One of his task is to find the best way to balance reaching economic growth while still protecting forests.

When asked what is the proposed economic model that Indonesia would use to switch from natural resources, his response was that at the moment, his team is still trying to find a model that will address balancing economic growth with finding solutions to the problem.

The two years moratorium, according to him, gives him the time to take pause and review laws and regulations of natural resources that have been there for four decades.

He sees the main problem in forests protection is regulation. “We know there are loopholes, overlaps, and gaps in current legislation. It fails to recognise indigenous rights and it is open for corruption on forestry governance.”

For the first time he announced that Indonesia has a single official map of forests. Before, each ministry, regional government or central government, had their own map of forests. The result is there can be two or three different licenses to manage a single forest.

“To start managing forest, we need to come up with a new set of laws that would address the cross-cutting nature of the issue. There are already two task force assigned by the president. Their job is to produce a new legislation draft to be submitted to house of legislation.”

The World Bank’s Managing Director, and also Indonesia’s ex-finance minister, Sri Mulyani Indrawati, sees forestry as the big test for Indonesia to proove its commitment internationally. “If we can show proof of it (protection) that can be verified internationally, that we are committed to REDD, I see it as a very good for Indoensia’s credibility, especially when (Indonesia is) trying to get more and more funding outside of forestry and REDD itself.” The key to implementing it, she said, is tackling the regional and provincial level, where the most of the main players are.

When Indonesia pledged two years ago to reduce its emissions of greenhouse gases by 26% by 2020, the focus was on forests. And while efforts to reduce deforestation will play a big role in reaching the target, cities are also major sources of emissions.

To date though, there has been little action in the urban centres that are home to half of Indonesia’s population and are themselves highly vulnerable to climate change.

That is set to change as the Ministry of Public Works has called on cities to reduce emissions and adopt green development plans with three main elements: planning and design, increasing the number of green open spaces, and empowering communities.

According to Budi Situmorang, the ministry’s deputy director of national spatial development planning, 60 cities will enact such plans in 2012 and 2013.

Experts warn however that continued reliance on private vehicles could create many ‘new Jakartas’ — cities with poor public transport systems and high levels of pollution.

Avoiding the Jakarta model

The number of cities in Indonesia is increasing — from 45 in 1970 to 98 by 2010 — and many aim to emulate the prosperity of the capital Jakarta.

But Jakarta itself is an inefficient city, from the way it consumes energy and water, to its unresolved waste management challenges.

Its transport system was developed independently of urban planning, and so people there rely heavily on private vehicles. Two-hour traffic jams are a daily occurrence.

Indonesia’s green city initiatives were developed so other cities would avoid the ‘Jakarta model’. As well as planting trees and creating new green spaces, the cities will improve waste management, increase efficiency in water and energy use, and integrate transportation systems into city planning.

But green transportation will not be planned until 2020, and only implemented five year later. Until then, the gap between urban planning and transport will remain.

Why the gap?

Asked why planning and transportation were not being integrated sooner, Budi Situmorang said: “We will not use the conventional transport that we see at the moment. Green transportation is not only a matter of energy efficiency, but of developing fossil fuels with lower emissions.”

His Ministry expects that within 13 years, the private sector will develop the low-emission fossil fuels or a green transportation system that can be adopted by Indonesian cities.

John Christensen, head of the UNEP Risoe Centre on Energy, Climate and Sustainable Development says that local governments should show political will to create low carbon cities by investing more in public transportation.

He warns that cities that fail to integrate urban planning and transportation systems will end up with public transport systems that cannot meet people’s needs for comfort and speed. In this situation, people eventually revert to using private vehicles and this, says Christensen, turns cities into major sources of greenhouse gases.

Stefan Schurig, climate and energy director for the World Future Council, agrees. He says that one of the most important ways to reduce emissions in cities is to think of new, creative ways to change consumption patterns of transportation.

Speaking last week at the UN climate change conference in Durban, he said that promoting public transportation is one way of doing it.

But, most importantly, he says, it is the local government’s political decision that has the ultimate power to determine how a city’s population will efficiently move from one place to another.

However, the index’s first three places remain empty as not one of the 57 nations listed is doing enough to limit temperatures from rising above two degrees Celsius, said co-author Jan Burck from Germanwatch.

The index highlights other large developing nations such as India (9th place), Mexico (11th), Indonesia (23rd) and South Africa (29th). Indonesia for instance has pledged to reduce its emissions by 26 per cent from business as usual by reducing deforestation.

These countries are also engaging actively in international climate-change negotiations, says Matthias Duwe, executive director of Climate Action Network-Europe.

“Their historical role [as emitters] is not as significant, but they are [now] big emitters and they see that climate change is an issue for them,” he said.

Sweden, usually a reliable performer in this index, now sits one spot below Brazil. Duwe said Sweden had failed to secure the top place as it no made any significant policy improvements or actions in the UN climate-change negotiations.

In contrast to the developing countries, European Union members such as Germany (7th), France (8th), and Denmark (17th) have slipped down the scale since last year.

The United States has improved on last year’s performance, largely because of the change in administration, but is still down in 53rd place.

China, the world’s largest emitter of global greenhouse gas, was deemed to be performing worse than last year, because of its rising emissions.

The report ranks all countries that produce at least per cent of global emissions. It is based on data from the International Energy Agency and contributions from 130 experts on national climate policies.

The index was derived from an assessment of each country’s emission trends in various sectors (energy, transport, residential, and industry), total emissions and climate policy.

In the case of Indonesia, although emissions from deforestation were not counted in the performance, the national policy of reducing emission through deforestation contributed to them being the second best among Asian countries, between India and Thailand.

Burck says policy itself is not enough. Indonesia still has to improve its forest protection plan, he said, adding that next year’s index will also take account of emissions caused through land use change.

India and Indonesia have the lowest per-capita emissions of the countries listed. But being the world’s fourth most populous country, says Burck, Indonesia’s emissions are not to be taken lightly.

“In the last five years, the highest growth [among Indonesia’s emissions) is in transportation,” he said.

Burck said that as Java is Indonesia’s most populous island, it has the greatest capacity to reduce its emissions. “Other islands are living in different, more simple standards,” he said.

He added that strong performance of the large developing countries shows there is a window of opportunity for creating a low-carbon economy. “This is the chance for developing countries to avoid making the same mistake that developed countries made in building their economies … to not use coal and go directly to renewable energy.”

The International Energy Agency (IEA) predicts that around 60 per cent of global electricity will need to be produced without emissions in order limit the rising temperature to no more than two degrees. The IEA says this would require 37 per cent to be from renewable sources, 18 per cent from nuclear and the rest from generator that capture and store carbon before it reaches the atmosphere.

The IEA’s executive director Nobuo Tanaka, says that by 2030, all conventional coal power plants in Japan, Europe, and United States would need to close down to achieve the emissions cuts needed to avoid a two degree temperature increase.

Another dramatic change the IEA recommends is to increase the proportion of car sales that are hybrids, plug-in hybrids, and electric cars from one per cent today to 60 per cent by 2030.

The IEA also makes energy efficiency a priority. It says an investment worth US$10.5 trillion by 2030 would deliver a US$8.6 trillion saving through lower energy bills for industry, housing, and transportation.

The IEA says such moves could allow global emissions to decline by 2020 and be lower than current levels by 2030. It warns however that even a year of delay would cost US$500 billion and make it harder to reach the two-degree target.

The agency said current pledges made by nations will not be enough to reach that target but would lead instead to an increase in global average temperature of three degrees Celsius.

In October, the IEA said the financial crisis had caused the growth of emissions from the energy sector to fall by three per cent, buying extra time for the sector to start converting to renewable sources.

Prime Minister of Denmark Lars Løkke Rasmussen said the conference must result in a strong and ambitious outcome.

“It is our mission to come to the aid of those who already suffer, and to deliver a long term solution to the mounting problem of global warming,” he said.

Rasmussen added that for more than a year, he has been conducting intensive consultations with world leaders in preparation for the conference.

He claimed they showed strong political will to support an ambitious agreement to halt climate change.

During next week’s high-level segment of the meeting, 110 heads of state and government will come to Copenhagen to try to ensure a new climate agreement is struck.

“And they come—not to agree to just anything—but to agree to an effective deal based on our fundamental principles,” added Rasmussen.

These legal principles are outlined in the UN Framework Convention on Climate Change (UNFCCC), the Bali Action Plan it created in 2007, and under the UNFCCC’s Kyoto Protocol.

The fact that Rasmussen mentioned the Bali Action Plan and the two negotiating tracks under the UNFCCC and its Kyoto Protocol is noteworthy.

There have been growing concerns among the G77/China negotiating bloc of 130 developing countries that the industrialised countries are trying to junk the second commitment phase of Kyoto Protocol in favor of a new yet less ambitious climate deal.

Developed countries have yet to provide a clear target for reducing their greenhouse-gas emissions to levels that would satisfy the G77/China, nor have they pledged sufficient financial assistance for developing countries to switch to low-carbon economies and deal with the impacts of climate change.

UNFCCC Executive Secretary Yvo de Boer said three elements must be agreed in Copenhagen. First, an agreement that would enable prompt action on mitigation, adaptation, finance, technology, capacity building and REDD — shorthand for reducing emissions from deforestation and forest degradation.

Second, a list of ambitious targets for developed nations to reduce their emissions, and third, around US$10 billion in ‘start-up’ financing to help developing nations adapt to and mitigate climate change in the short-term.

In his speech, de Boer compared those elements to three layers of an “ideal Christmas cake that needs to come out of Copenhagen.”

The European Union has pledged to reduce their emissions to 20 per cent below 1990 levels by 2020, while the United States has committed to a 17 per cent reduction below 2005 level, also by 2020.

Prior to the meeting, several developing countries also pledged to curb the growth in their emissions. China, India, Brazil, South Korea, and Indonesia were recently joined by South Africa, which says it will reduce its emission growth by 34 per cent by 2020.

Meanwhile, head of Indonesian delegation Rachmat Witoelar said in a press briefing that failure is not an option in Copenhagen. He predicts an uphill struggle for the next two weeks due to differences of opinion between developing and developed countries.

“We need to look for common ground among all parties, not to stick to an opinion on what we bring from home,” he said.

Indonesian Environment Minister Gusti Muhammad Hatta has said that Indonesia will be demanding that developed countries reduce their emissions by an average of 40 per cent.

He added that other Indonesian demands were an approval of a REDD mechanism, and that oceans are giving central prominence in the climate change talks alongside forestry.

The negotiating bloc known as the G77 countries and China, the major group comprising developing countries, opposed on Monday a fund using already existing financial institutions like the Global Environment Facility and the World Bank. Indonesia is a member for the G77.

An Indonesian negotiator from the National Council of Climate Change, Ismid Hadad, said that giving the World Bank a key role would ensure domination by rich and developed countries. He favored a scheme that gave decision-making power to all countries participating in the UN climate change negotiations.

He likened the new scheme to a “one dollar, one vote” process, rather than the “one country, one vote” approach favored by the G77+China. The preferred scheme would be a new climate fund created under the UN system. Recipients of the funds would then be guided by and accountable to the UN, not the US-dominated World Bank.

Ismid also opposed Mexico’s addition to this US proposal, which would require that all countries contribute to the global climate fund. He said that money to help developing countries cope with climate change should instead come from developed countries.

European Union climate negotiator Artur Runge-Metzger reinforced the US position on Tuesday, saying that the new climate financial scheme would be better handled by already existing financial institutions. This US proposal, he said in his keynote speech at the Thai Foreign Ministry, will not replace the current financial institution used in distributing the funds, which is World Bank. He said that setting up an entirely new financial institution would take a very long time. He predicted that there will be up to 50 billion Euro in this fund by 2020.

An activist from the Climate Action Network, a global network of hundreds of nongovernmental organizations, Raman Mehta, said this position by the United States and European Union was helping to cause a deadlock in climate negotiations. According to Mehta, this was just one of many ways the developed countries are trying to renege on their obligations to address the effects of climate change.

Although this is the first time the United States clearly stated its position on a climate funding scheme Mehta views this as merely a negotiation tactic in the long run. “With India and China opposed to this proposal, the United States can say, ‘Hey, look, we already changed our position, but now India and China are the bad guys because they are the ones blocking the negotiation process.’”