ABSTRACT: IMPLEMENTATION OF CARBON MARKET FOR REDUCING FOREST DEGRADATION AND DEFORESTATION IN ASEAN: PROSPECT AND OBSTACLES

By: Addinul Yakin, Faculty of Agriculture, Mataram University

Jl. Majapahit 62 Mataram, NTB, Indonesia 83125

Presented at National Seminar on Optimalizing Integrated ASEAN Community in 2015, Collaboration between ASEAN Secretariat and Mataram University at Grand Legi Hotel, Mataram, 10 December 2011.

ASEAN forests have vital roles for social, economic, and ecological development regionally and globally. However, this area still faces significant pressures due to ongoing alarming rate of deforestation and forest degradation. International and regional collective efforts have been developed substantially in the last two decades, particularly since the emergence of Kyoto Protocol and Clean Development mechanism in 1997 under UNFCCC. Aforestation and reforestation projects (A/R CDM) and REDD+ provides various benefits for ASEAN countries when they participate both in timber market and in carbon market. Collectively, ASEAN countries have developed a series of policies either strengthening internal institutions in ASEAN such as ASEAN Multi-Sectoral Framework on Climate Change: Agriculture and Forestry Towards Food Security (AFCC), the Forest Monitoring for Action -FORMA) under the Center for Global Development (CGD), or strengthening positive interactions with the United Nation Forum on Forests (UNFF) ASEAN, among others, establishing Caucus on Forestry under the UNFF, and optimal use of available bilateral and multilateral mechanism in preparing, implementing, and realizing carbon payments in the contex of REDD+. Under Scenario 50% avoided degradation with US$ 5 per ton CO_2, ASEAN area would receive about US$ 2,696.82 million (96% out of 10 countries with the highest REDD potency). Estimation of global financing allocation both through multilateral and bilateral mechanism for the year of 2010-2012, ASEAN countries would receive about US$ 701.70 million where about US$527.88 million (75.23 %) will go to Indonesia. Results of literature review show that implementation of programs and policies on REDD through application of carbon market instruments would have environmental and economic benefits, however it still needs to carry on study and analysis on its implementation feasibility. Various problems either in global, regional, or in local scales such as ongoing international controversy on the contribution of deforestation to global warming, feasibility of A/R CDM projects, complexity of data and information, the existence of CER, and viability of small farms to gain carbon benefits, have to resolve in proper way in order to establish sustainable forest management and development.