Reductions in Emissions from Deforestation from Indonesia’s Moratorium on New Oil Palm, Timber, and Logging Concessions

Proceedings of the National Academy of Sciences (Published online before print January 20, 2015; doi: 10.1073/pnas.1412514112) / by Jonah Busch, et al.
http://www.pnas.org/content/early/2015/01/14/1412514112

Our paper is significant in a number of respects. First, we expand the literature on quasi-experimental evaluation of the causal impact of conservation measures to include agricultural concessions. Second, our report is rare in that we use panel data and techniques in a literature on spatially explicit land-use change econometrics that has necessarily relied upon cross-sectional analyses because of data-availability constraints. Third, our report is rare among land-use change scenario analyses in that we calibrate the effect of land-use designations empirically, rather than assuming idealized perfect effectiveness of conservation measures or complete conversion without such measures. Finally, we compare the effectiveness of place-based policies with alternative price-based instruments for climate-change mitigation within a globally significant landscape.

To reduce greenhouse gas emissions from deforestation, Indonesia instituted a nationwide moratorium on new license areas (“concessions”) for oil palm plantations, timber plantations, and logging activity on primary forests and peat lands after May 2011. Here we indirectly evaluate the effectiveness of this policy using annual nationwide data on deforestation, concession licenses, and potential agricultural revenue from the decade preceding the moratorium. We estimate that on average granting a concession for oil palm, timber, or logging in Indonesia increased site-level deforestation rates by 17–127%, 44–129%, or 3.1–11.1%, respectively, above what would have occurred otherwise. We further estimate that if Indonesia’s moratorium had been in place from 2000 to 2010, then nationwide emissions from deforestation over that decade would have been 241–615 MtCO2e (2.8–7.2%) lower without leakage, or 213–545 MtCO2e (2.5–6.4%) lower with leakage. As a benchmark, an equivalent reduction in emissions could have been achieved using a carbon price-based instrument at a carbon price of $3.30–7.50/tCO2e (mandatory) or $12.95–19.45/tCO2e (voluntary). For Indonesia to have achieved its target of reducing emissions by 26%, the geographic scope of the moratorium would have had to expand beyond new concessions (15.0% of emissions from deforestation and peat degradation) to also include existing concessions (21.1% of emissions) and address deforestation outside of concessions and protected areas (58.7% of emissions). Place-based policies, such as moratoria, may be best thought of as bridge strategies that can be implemented rapidly while the institutions necessary to enable carbon price-based instruments are developed.

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