Simulation Impact of REDD Policy: Case Study of Forest Area in Indonesia

Indonesia's forests in different periods have been deforested at different levels. Deforestation caused carbon emissions. The purposes of this study were :1) to measure deforestation and carbon emissions in period of 2005-2010 in Indonesia and 2) to find out the incentive value to be paid by the government. One method for measuring emissions from deforestation and forest degradation is GeOSIRIS model. A modeled GeOSIRIS policy used a carbon payment system to incentivize emission reductions. Data used in this study were maps of forest cover in 2005 and 2010, map of deforestation 2005-2010, carbon and agricultural price and driver variables for deforestation such as slope, elevation, logarithmic distance to the nearest road, logarithmic distance to the nearest provincial capital, the amount of area per pixel included in a national park, a timber plantation. The result of this study showed rate of deforestation was 4.65 million ha/5 years. The REDD policy could decrease deforestation in Indonesia by 0.66 million ha (17.45 %). Assuming that international carbon price was US$ 10/tCO2e, the change of emissions due to REDD was 24.75%, or reduced emissions by 1.09 million tCO2e/5 years. Finally, Gross National Revenue from carbon payments (NPV 5 years) was US$ 10.917 billion, where incentivize emission reductions to sub-national entities (NPV, 5 years) was US$ 9.178 billion and net central government surplus from carbon payments was US$ 1.739 billion (NPV, 5 years).