Can Indonesia’s HCV Forests be Saved?

Lisa Genasci —  May 18, 2010 — 1 Comment

Babirusa

If I were a pessimist, this might be a moment of total despair over the future of high conservation value tropical forests in Indonesia.

The question we and others have struggled with has been: how to make the economics work for conservation? Logging is profitable business for large landowners; for communities, cutting trees can often represent the only source of income.

Most recently, hopes have rested on the carbon markets and REDD as a source of funding for both communities and landholders, paid for by companies wanting to offset their carbon emissions.

But Copenhagen was a disaster, leaving little hope for any global carbon framework anytime soon, while the weak U.S. Climate Change bill looks like it won’t be up for debate this year.  The carbon markets are in disarray.

Meanwhile, climate science itself is embroiled in controversy over seemingly not very much and last year’s financial markets meltdown has made investors innovation adverse.

When one of our carbon champions returned last week from a tour of the U.S. seemingly distraught over the state of the markets, we knew that was at least not an immediate answer to funding conservation, despite the abundance of REDD carbon projects dotting Southeast Asia!

But what are the solutions? What can possibly compete with the huge profits from logging virgin forests?

For two years, we have been working with Oxford-educated biologist, Dr. Lynn Clayton, who for the past two decades has courageously worked to protect the 62,000-hectares Nantu forest in Sulawesi, Indonesia.

Working with a small team, Dr. Clayton has done an excellent and recognized job keeping hunters from the region’s many endemic species such as the babirusa and anoa, which are described  in Alfred Russell Wallace’s 19th century tome, the Malay Archipelago, which chronicles the naturalist’s journeys in the unique region.

Under consideration has been an off-shore trust fund that would generate resources to support the conservation effort at Nantu and at the same time help promote alternative livelihoods for local communities, which are vital to any such effort.

But trust funds, which involve sizable up front chunks of cash, have fallen out of favour in the rush to carbon thus raising those sorts of resources (we estimate that US$5 million in a loan or donations would help secure Nantu) has proven difficult.

With carbon less certain than ever, the other alternative has been to generate business models around Nantu that potentially could generate funding for conservation as well as support local livelihoods.

Once again, however, the sticking point seems to be the feasibility studies and business planning that involve significant upfront costs with uncertain returns. What are interesting conservation finance models, perhaps from other regions, that are working?

Lisa Genasci

Posts

CEO of Hong Kong-based ADM Capital Foundation

Trackbacks and Pingbacks:

  1. Forest Impact Bonds: « Social Ventures Asia (Lisa Genasci) - January 4, 2012

    […] The multiple challenges around forest conservation is something we’ve written about previously in this blog here and here. […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s