Deal Narrative 5: Implementing carbon offset projects in Indonesia’s rainforests – a win-win for climate and local communities?

Although land-intensive investment projects have shaped economies and societies for centuries in low- and middle-income countries (LMICs), renewed global attention surfaced in the 2000s due to surges in investments in agriculture. Placing even more pressure on land in these regions over the last two decades, global climate change mitigation efforts have seen a deluge of land-intensive projects — including those for reforestation/afforestation and avoided-deforestation (often subsumed under the term “nature-based solutions”) — drive up land acquisitions financed through the voluntary carbon market (VCM) across the globe. While these projects undoubtedly have the potential to deliver climate benefits and create economic opportunities for local communities, it often remains unclear whether they live up to their promises in practice.

Tracking emerging pressure on land from climate action and the increasing importance of the VCM, the Land Matrix Initiative has already registered nine million hectares (ha) of concluded land acquisitions for carbon offsetting, with multiple hotspots across the globe. Naturally, the associated risks are greatest in the countries in which these deals are highly concentrated, such as Indonesia, the top hotspot, where many large-scale projects access land through the country’s well-established concession system.

This deal narrative, based on research supported by the Lincoln Institute for Land Policy, examines two land deals (#10906 and #10888) that are emblematic of the land-intensive carbon offsetting system in Indonesia’s forest sector to investigate whether these projects deliver on mitigation activities and if meaningful community engagement and benefit sharing are upheld in line with offset standards, project descriptions, and global frameworks that are of relevance for land-intensive carbon offset projects.

Authors: Christoph Kubitza, Grace Art, Mohammad Izzudin, Sofyan Ubaidi Anom, M. Asrori, Nikka Rivera

WHAT ARE DEAL NARRATIVES?

Deal narratives are investigations of specific LSLAs by the Land Matrix regional and global partners that provide an in-depth and detailed analysis of single deals in addition to its global database. This deal narrative focuses on Land Matrix deals #10906 and #10888. By making this information available, the Land Matrix aims to support broad engagement and information exchange, facilitating the continuous improvement of the data. The information on the deals is based on both secondary research and in-depth field research in the region involving the relevant stakeholders.

Acknowledgements

The Land Matrix would like to acknowledge the Asian Farmers’ Association for Sustainable Rural Development (AFA) and Aliansi Petani Indonesia (API)for their valuable contributions to this publication.