The Ulu Masen project covers an area of 770,000 hectares in Aceh province in the north of Sumatra. The project aims to generate 3.3 million carbon credits a year to finance conservation and development projects for local communities. To find out more, REDD-Monitor interviewed Joe Heffernan of Flora & Fauna International and David Gaveau of the University of Kent in England.
The Ulu Masen project was developed by Fauna & Flora International (FFI), carbon trading firm Carbon Conservation and Aceh’s Governor Irwandi Yusuf. Merril Lynch has agreed to provide US$9 million over four years. It was the first REDD project to be accredited under the Climate, Community & Biodiversity Standards. John-O Niles, then-chief science and policy officer for Carbon Conservation, told Bloomberg that the project “will reduce emissions equivalent to Mexico’s annual greenhouse-gas output”. FFI says that the project “is expected to prevent 100 million tonnes of CO2 emissions over the next 30 years, the equivalent of 50 million flights from London to Sydney.”
But research published in November 2009 in Environmental Research Letters found that the project “may not significantly reduce deforestation in northern Sumatra”. The research team used satellite maps and modelled three future deforestation scenarios: no RED project; the Ulu Masen RED project in a new upland protected area; and an alternative arrangement that uses RED across landscapes outside protected areas. (The research did not look at forest degradation – see Gaveau’s comment, below.) The team’s models predicted that Ulu Masen project would save 1,313 square kilometres of upland forest by 2030, but an area of 7,913 square kilometres of forest outside protected areas would be destroyed. The alternative, of implementing REDD across all remaining forest landscapes outside protected areas, would save an area of forest covering a total of 7,824 square kilometres.
David Gaveau, who led the research team, told Environmental Research Web that
“Our study suggests . . . [the] initiative will not significantly reduce deforestation in northern Sumatra and will have little impact on orangutan conservation, because firstly a large amount of forest inside the proposed REDD project area is protected de facto by being inaccessible; and secondly much of northern Sumatra’s lowland forests will remain outside of REDD and will be exposed to the combined expansion of high-revenue oil palm plantations and road networks.”
REDD-Monitor’s interview with Joe Heffernan follows. Heffernan is Project Design Specialist, Environmental Markets Department, at Flora & Fauna International. Below that is a comment from David Gaveau clarifying his position and research findings. Carbon Conservation declined to answer REDD-Monitor’s questions.
REDD-Monitor: On the FFI website is the statement that the Ulu Masen project “is expected to prevent 100 million tonnes of CO2 emissions over the next 30 years, the equivalent of 50 million flights from London to Sydney.” Could you please provide the assumptions underlying this statement and explain how the project came up with this figure.
Joe Heffernan: Carbon Conservation calculated the total avoided emissions tCO2-equivalent (VER equivalent) at 101,095,427, audited by the Rainforest Alliance. This figure is calculated on baseline carbon stocks and determined using a predicted deforestation summary and post-deforestation summary giving us total avoided emissions.
REDD-Monitor: Has the figure of 100 million tonnes of CO2 emissions been independently verified? If so, could you please send me a copy of the Verification Audit.
Joe Heffernan: The figure has been independently verified through a project design audit process under CCBA but we are preparing for a more rigorous audit under VCS and other relevant protocols.
REDD-Monitor: Has the project started trading carbon credits? If not, why not and when do you anticipate that the project will start to trade carbon credits?
Joe Heffernan: The project has not yet started to transact carbon credits. CCB does not accredit projects, so it is necessary to conduct a further validation process under the rigorous VCS guidelines for generating VERs. This work is presently being undertaken.
REDD-Monitor: I understand that FFI played a key role in setting up the Ulu Masen project. Could you please briefly describe how the project came into being and what FFI’s role was.
Joe Heffernan: FFI has been working in Aceh since 1997, through civil conflict and the tsunami. Since the tsunami, we have been supporting the Government of Aceh to mainstream sustainable environmental procedures into the economic and spatial development of the province.
We were approached by Carbon Conservation in 2006 in Australia to suggest suitable areas for piloting the new concept of REDD and were able to introduce their management to the Provincial authorities.
FFI provided support in preparing outline materials and socializing this very new concept within government. Since then, we have been providing financial and technical support to the provincial government to ensure that there will be a transparent, equitable and credible deal between the government and the private sector, whilst continuing to engage in community level consensus building around natural resource use, through the local mukim (adat) structure.
In addition, we have trained community rangers to begin monitoring forest use and assisting communities with issues such as human-wildlife conflict. In policy forums FFI has facilitated the government and key stakeholders to review forest zoning plans for the province and examine how to advance a green vision for the province, under the banner of Aceh Green. This is a government led initiative to provide a balanced approach to management of the environment with sensitive and strategic commercial investment.
REDD-Monitor: What will happen to the forest after 30 years, when the project comes to an end? How does the project address the fact that most of the CO2 emitted as a result of the carbon credits sold by the project will stay in the atmosphere far longer than 30 years?
Joe Heffernan: As part of the REDD process, the Ulu Masen area has been formally designated as a Strategic Use Area under the ‘Law on Governing Aceh (No.11/2006)’, and the Provincial Parliament. This will be a permanent designation. FFI views the Ulu Masen as a priority for Aceh well beyond its carbon value. The watershed, biodiversity and intrinsic values as well as its importance for local communities meant that we had prioritized conservation of this area long before the REDD concept was on the horizon.
REDD-Monitor: Recent research suggests that the Ulu Masen project will do little to reduce deforestation. How do you respond to this?
Joe Heffernan: We would refer you to the original calculations of expected avoided emissions. FFI feels we are able to achieve these reductions in deforestation and degradation. Our understanding is that the author of this report feels he has been misrepresented in the media on this issue. He has made contact with FFI to explain this position.
REDD-Monitor: What is the current status of the project? Is Merrill Lynch financing the project, despite the problems of the financial crisis? Has the Indonesian government approved the project?
Joe Heffernan: Our understanding is that the agreement between Merrill Lynch and the Government of Aceh is still in place. Project development funding is mainly being provided through FFI’s grant from a multi-donor trust fund at this stage. The Indonesian Government is fully behind this project and has been represented at recent International Project Steering Committee meetings. FFI cannot comment on the formal arrangements between the provincial and national authorities but understands the situation to be agreeable to both parties.
REDD-Monitor: Given that the Aceh Forest and Environment Project is running concurrently with the Ulu Masen project (and the AFEP will be extended beyond 2010), how can the Ulu Masen project be considered to be additional?
Joe Heffernan: At this stage, the AFEP project is still active and credits are not being claimed. The project life for AFEP is not decided at this point. We do not have any confirmation that AFEP will be extended beyond 2010. Therefore there is no other secured funding for this project. Demonstrating additionality requires the credit revenue to be the primary reason for reduction of emissions.
REDD-Monitor: Have the logging concessions in Ulu Masen been revoked? What is the latest situation regarding revoking these concessions? How much illegal logging is taking place in Ulu Masen?
Joe Heffernan: Logging concessions in the Ulu Masen are still suspended as a result of the 2007 logging moratorium. Presently, there is a province-wide forest redesign process instigated by the Governor called TIPERESKA. The findings of this process will provide recommendations on next steps for a revised spatial plan for the forest.
REDD-Monitor: At a side event in Poznan, Martin Berg of Merrill Lynch talked about the ownership of the carbon and mentioned that the legal aspects of projects like Ulu Masen is “tricky”. He also said that it’s “highly speculative” to get involved. Who actually owns the carbon stored in the forests of Ulu Masen?
Joe Heffernan: FFI acts to support the Government of Aceh to manage the natural resources of the province. The ownership of the carbon stock is, as ever, complex. I am sure you are aware of the ongoing discussions between local communities, provincial agencies and national governments on this issue and we are not in a position to comment. We are not mandated to make this decision.
REDD-Monitor: Has the project obtained the Free, Prior Informed Consent of the local communities living in and around Ulu Masen? If so, could you please explain how this consent was arrived at. If not, please explain why (and how) the project decided not to apply the FPIC principle.
Joe Heffernan: FFI is a strong advocate of the principle of Free, Prior, Informed Consent and we are promoting this ethos within all conservation partnerships with which we are involved. In Aceh FFI has been engaged in Mukim (traditional Acehnese local Governance system) empowerment and support for the past five years. We have built strong relationships throughout the Ulu Masen area with Mukims and this provides one framework for information and discussion on the options available. Design of community benefit sharing and involvement in project activities will be driven by communities who chose to participate once all the information is available to them.
REDD-Monitor subsequently asked David Gaveau, the lead author of the paper in Environmental Research Letters, to clarify the findings of the research in relation to Ulu Masen:
REDD-Monitor: Your paper in ERL states that “Our predictions suggest that Indonesia’s first RED initiative in an upland PA may not significantly reduce deforestation in northern Sumatra and would have little impact on orangutan conservation because a large amount of forest inside the project area is protected de facto by being inaccessible, while lowland forests will remain exposed to the combined expansion of high-revenue plantations and road networks.” This seems to me to be a pretty unambiguous statement. Could you please clarify how you feel you have been misrepresented in the media and please explain your position.
David Gaveau: I feel the summarizing article may have put too much emphasis on the limitations of Ulu Masen per se and not enough on the broader question of spatial scale (explained below) and on the resulting main argument of the paper that REDD should be implemented across the whole province to drastically reduce deforestation and conserve species in northern Sumatra. I feel, the summarizing article could have been entitled: “REDD schemes must cover more grounds to save forest in Indonesia” whereas the current and perhaps more controversial title: “REDD project unlikely to save forest in Indonesia” may have mislead the reader.
Our ERL paper did not address avoided forest degradation, whereas some parts of Ulu Masen have been logged with logging trail networks (see our maps in google earth format at www.sumatranforest.org). This is the reason why we refer to RED and not REDD in the paper. We are now working to quantify degradation. But, the paper shows statistically that logging trails in the region as a whole did not attract plantations because much of the logging in Ulu Masen occurred on rugged terrain.
The primary aim of our ERL paper was to explore an important policy question for REDD: what is the right spatial scale for REDD implementation? The ERL paper questioned whether REDD should be implemented within well-defined areas of land, or whether it should be implemented across much larger spatial scales, for example a province or a nation. The first approach (often called “project” or “sub-national” approach) follows the most common conservation approach of restricting human access within the boundaries of a defined protected area. We are witnessing the birth of a new generation of REDD-labelled Protected Areas. The second approach follows a landscape level conservation approach. This second approach sees the landscape as a whole and works beyond protected areas and is not as common, because more difficult to implement. The ERL paper used the Ulu Masen REDD project case study and compared it to a landscape level conservation approach to illustrate the broader question of spatial scale and its implications to policy makers. The paper never intended to put the Ulu Masen REDD project in a bad light. As deforestation rates recover to pre-conflict levels of 1990s in Aceh province, any measure that secures the protection of Aceh’s forests from oil palm and illegal loggers deserves support. Ulu Masen is also an important habitat for biodiversity, including large charismatic mammals like elephants and tigers. But, the study did show quite clearly that the Ulu Masen project alone won’t probably be enough to save the vulnerable lowland forests of Aceh province and its flagship species, the Sumatran orangutan because this REDD project alone won’t be able to halt the expansion of oil palm and road networks in the region. Furthermore, large tracts of vulnerable lowland forests will remain outside the project and outside existing protected areas, and open to plantation development (it is already happening), which will increase the likelihood that deforestation might be displaced from the REDD project areas to forests outside projects (leakage), simply because the demand for agricultural products won’t go away. In Aceh, there is a contradiction between the establishment of the prominent Ulu Masen REDD project and the continuing expansion of roads and industrial oil palm plantations in the region. The paper addressed this contradiction. In broader terms, this case study illustrates the flaws of the implementation approach by project. REDD Projects cannot address the broader forces driving deforestation in the wider landscape because they operate at smaller scales. In turn, there is a high risk of leakage. If there is leakage carbon offsets won’t offset anything. Worse, C02 emissions will continue to rise. By contrast, the large-scale approach, whether national or provincial allows pursuit of a broad set of policies to address broader driving forces of deforestation. This approach also deals with leakage. The landscape level conservation approach presented in the ERL paper puts a halt to road and oil palm development outside recognized protected areas through direct compensation to land holders like companies and small-scale farmers.This approach also deals with leakage by securing a conservation deal across all remaining forests in the province.
Clearly, implementing the landscape approach is fraught with technical dificulties. For example, high transaction costs and investment risks appear to be major barriers to establishing carbon concessions across large, heterogeneous regions (Carlson and Curran in ERL 4 (2009) 031003 (3pp)). Identifying who should receive compensation as well as negotiating transparent and effective payment arrangements, is at best challenging especially with ambiguous land use rights and government jurisdiction in Indonesia.
Perhaps, a fatal flaw in the potential implementation of the landscape conservation approach is that carbon offset prices may have trouble competing with prices of agricultural commodities, for example palm oil. Demand for agricultural products won’t go away.
 I wrote to Dorjee Sun, CEO of Carbon Conservation on 27 October 2009. He replied the following day: “Hey Chris, am traveling can u give me a few days to revert?” I asked him to reply by 6 November 2009, if possible. On 10 November 2009, I received an email from Ralph Strebel at Carbon Conservation:
“Thank you for your questions about the Ulu Masen Ecosystem Avoided Deforestation Project. I have just recently returned from Aceh province. It came to my attention there that you had been in touch with other project stakeholders who when notes were compared, had received the same set of questions. It is my further understanding that those questions have been answered or are being answered as FFI is responding.”
I replied the following day (with a copy to Dorjee Sun), pointing out that two of my questions were specifically for Dorjee Sun, or someone else at Carbon Conservation to answer. That was three months ago. I’m still waiting for Carbon Conservation’s response.
Here, for the record, are the questions for Carbon Conservation:
1. To avoid runaway climate change, we need to stop burning fossil fuels AND stop deforestation. Selling forest carbon credits might protect the forests but it will guarantee that an equivalent amount of fossil fuel will be burned somewhere else. Industry is therefore allowed to continue business as usual, rather than making the necessary changes away from burning fossil fuels. How do you respond to this argument?
2. In April 2008, you were reported by ABC as saying that “the forest will be guarded by 1000 heavily-armed former Free Aceh rebels”. Is it true that the forest will be guarded by heavily-armed guards? Against whom are they guarding the forest?