Obama Set to Reveal $700m Indonesian Forest Funding

Jakarta Globe, Fidelis E. Satriastanti & Reuters | November 03, 2010

Jakarta. US President Barack Obama is expected to use his brief visit to Indonesia next week to announce hundreds of millions of dollars in funding to help the nation tackle climate change, a senior official said on Wednesday.

US President Barack Obama, seen in this file photo,
is expected to make an announcement vowing
hundreds of millions of dollars to help Indonesia tackle
climate change when he visits the country.
(AP Photo/Alex Brandon)

Obama, who is scheduled to visit the country on November 9, is likely to announce $700 million for the Millennium Challenge Corporation, a development fund formed under the Bush administration.

The foreign aid fund, which provides poorer countries with large grants to fund domestic poverty reduction through sustainable economic growth, can also include funding for climate change and forest conservation.

Indonesia’s forests and seas are widely expected to be at the heart of coming efforts to boost ties between Washington and Jakarta and to step up the fight against climate change, officials and other sources said.

Agus Purnomo, a presidential staffer focusing on climate change, said that if Obama did publicly announce the funding commitment, it would mark the country’s first concrete action to contribute to Indonesia’s battle against climate change and would affirm Washington’s seriousness in contributing to the issue.

“The US and Norway had each made a pledge for $1 billion dollars in fast-track funding committed in the Copenhagen Accord, but for a year the US side has not acted. No numbers [for climate change funding] at all,” he said.

Indonesia has some of the world’s most complex and diverse forests but also one of the highest deforestation rates.

Saving them from illegal logging and unsustainable clearing for agriculture and mining could help the country meet its goals to cut greenhouse emissions — the third-highest globally according to the World Bank, taking into account deforestation and land use.

It would also help the United States in its goal to fight climate change, and help Indonesia become a source of tradeable forest carbon offsets that would help polluting US industries meet future targets to cut emissions.

Although Agus said he was not sure about the funds that would be committed, he estimated that the country could get $200 million from the MCC and maybe another $200 million from another, unspecified fund.

Meanwhile, Teguh Surya, head of advocacy at the Indonesian Forum for the Environment (Walhi), said the funding commitment should wait until Indonesia was ready to manage the money.

“Obama’s good intention should be appreciated; however, we still don’t have any clear mechanism to manage this money. It would be open to misuse,” Teguh said.

He added that what the country needed most was funding for climate change adaptations — such as weather early warning systems for fishermen — rather than mitigation efforts.

Furthermore, he said, Yudhoyono should push the United States for radical emissions reductions of its own, to show that US funding was not simply a way of preparing Indonesia to enter the carbon market.

The visit could also reveal details about implementing a four-year program worth up to $40 million to fight deforestation, reduce the loss of biodiversity and improve land management.

That scheme was announced earlier this year.

Details may also emerge of a further $20 million for marine conservation, a source said, while steps to promote clean energy development could also be announced.

The United States has an interest in protecting Indonesia’s forests not just because of the valuable role they play sucking greenhouse gases out of the air, but also as a key part of a potential future forest offsets trading industry, observers say.

“They are trying to find a way to protect their future offsets but they have also seen how important Indonesian forests are for the global climate crisis,” said Jakarta-based Greenpeace forest campaigner Bustar Maitar.