Sustainable forest management that aims at Reducing 
Emissions from Deforestation and forest Degradation (REDD+) includes 
payments to landowners and can provide economic benefits over 
alternative land uses such as oil palm plantations. If certain key 
factors are resolved, REDD+ can simultaneously achieve economic and 
social success while bringing ecological benefits and contributing to 
climate change mitigation.
    
  
 
  
  
  
      The objective of REDD+ is to provide an economic incentive to 
landowners to manage their land in such a way that forests remain intact
 and the carbon stays stored in the plants. Using the forests’ natural 
ability to remove carbon from the atmosphere is a relatively affordable 
and convenient way to contribute to climate change mitigation. Depending
 on local ecosystem dynamics, socio-political conditions and relevant 
alternative land uses, such as agriculture or oil palm plantations, 
REDD+ payments can be economically competitive. The benefits of REDD+ 
are especially visible in cases where – besides payments for carbon 
storage – other ecosystem services such as clean water provision and 
biodiversity are considered in the equation. These findings are 
particularly relevant for the local implementation of REDD+ projects 
that rely on the support of the affected people.
In a recently published article in 
Environmental Sustainability, researchers
 from Wageningen University examine the economic costs and benefits from
 several land use alternatives in secondary forests and oil palm 
plantations in Kalimantan, Indonesia over a 20-year period. The 
researchers quantify and compare revenues from sustainable timber 
harvesting, palm oil production, and non-timber forest products like 
rattan, a plant used for its fiber. They use data from peat land and 
from land on mineral soils. Peat soils have a significantly higher 
carbon content as compared to other soils, which makes land conversion 
on peat land particularly impactful for the climate. The researchers 
look at the amount of CO
2 that is either (a) released into 
the atmosphere in cases where land is converted from forest into palm 
oil plantations, or (b) absorbed into plant biomass through the growth 
of vegetation. To calculate costs for carbon emissions, an amount of 
five dollars per ton of released CO
2  ($/t CO
2)is used. This price is a conservative estimate given that the average carbon price in 2011 for REDD+ projects was $12/t CO
2.
The researchers find that REDD+ payments of only three dollars per ton of avoided CO
2 emissions
 makes sustainable forest management on peat lands financially more 
attractive than establishing oil palm plantations. Conversion of peat 
land forests through logging leads to ongoing CO
2 emissions 
from the exposed soil. Most oil palm plantations in Kalimantan are 
established in exactly these areas.  Another finding is that even on 
less carbon-rich mineral soils, REDD+ payments of $7/t CO
2 will incentivize landowners to keeping and maintaining the forest than compared to converting the land to oil palm plantations.
Decades of intensive logging have led to vast areas of degraded 
grasslands in Indonesia. The researchers find that converting these 
degraded grasslands into oil palm plantations can have significant 
benefits for society. Cultivating these areas constitutes a big 
opportunity to both satisfy the demand for palm oil and withdraw carbon 
from the atmosphere. In this scenario, no deforestation takes place and 
biologically less valuable areas turn into productive lands that yield 
economic revenues while having a positive effect on the climate by 
absorbing carbon.
There is enough degraded land in most of Indonesia on non-peat mineral 
soils to swap the currently unused palm oil licenses from peat land 
forests to degraded grasslands. However, ownership of such land on 
mineral soils is more dispersed than ownership of peat land. This, among
 other factors, leads to higher costs, and has so far impeded political 
initiatives to switch locations for large-scale plantation licenses. 
Therefore, oil palm plantations are currently planted on the 
economically least attractive and ecologically most vulnerable sites – 
the peat land forests. This shows that investment decisions are not 
solely made based on economic calculations but that other factors such 
as the accessibility of land and political conditions drive land use 
change.
Four major insights came out of the study. First, REDD+ is instrumental 
to promote better land use. However, other measures need to be included 
to reach socially optimal land use. Aggregated economic incentives for 
multiple ecosystem services, not only carbon storage, will lead to 
increased competitiveness over other land uses. Second, an institutional
 framework for effective local land management is necessary to ensure 
clear land tenure, monitoring of land use changes, and enforcement of 
regulations. Third, local stakeholder interests need to be taken into 
account. Potential impacts on the ability of local people to use the 
forest through REDD+ projects need to be communicated to them. 
Furthermore, timing is essential since the affected people may not be 
able to forego revenues from forest use until they receive the first 
REDD+ payments. Fourth, designing and implementing REDD+ projects needs 
to be done in accordance to local ecosystem dynamics. For instance, if 
an area on a peat dome is drained in order to be prepared for an oil 
palm plantation, the groundwater table in the adjacent peat land forest 
will drop as well. This leads to forest degradation and increased CO
2 emissions outside the plantation boundaries.
REDD+ payments can offer a competitive land use alternative that 
provides social, ecologic, and economic benefits to all stakeholders 
while contributing to climate change mitigation. However, there is a 
need for a locally adapted regulatory framework that takes into account 
the complex ecosystem dynamics for REDD+ to fulfill its climate 
objective. Awareness of cultural and institutional factors is essential 
for the effective and successful planning of REDD+ projects for local 
ecosystem management as economic incentives. Mechanisms other than 
carbon payments need to be included to yield the societally optimal land
 use scenario. While only speaking for the researched area in 
Kalimantan, Indonesia, this paper shows that economic models can serve 
local land use planning processes. This insight is particularly relevant
 for policymakers who can contribute to grounding political 
decision-making on clearly defined factors that illuminate economic, 
ecological, and social impacts of land use policies.
http://environment.yale.edu