REDD MoU Between Perhutani and Korea SG Consulting

We are pleased to announce that PP (Perum Perhutani) and SG (PG. SG Consulting, JL. MT. Haryono Kav. 62 Jakarta, 12780 Indonesia) have signed a Memorandum of Understanding outlining development and implementation of REDD (Reducing Emission from Deforestation and Forest Degradation) based carbon emission rights products from the forests of PP.

PP and SG feel that it is important for Indonesia to work with such entities as the Government of the Kingdom of Norway and other multinational institutions ranging from IFC to ADB to develop REDD mechanism. It is indeed noble for Norway and other institutions to provide funding to help Indonesia develop REDD mechanism with fund approach.

PP and SG also feel that it is just as important for Indonesia to pursue non-fund based avenues to create and market REDD based carbon emission credits, namely market based approach as was agreed in Copenhagen last year. While there is some uncertainty with the future of post-Kyoto, PP and SG are of the opinion that some form of Kyoto will survive into the post-2012 period, and that post-2012 mechanism will allow creation and trading of market based REDD carbon emission credits. Even if post-Kyoto should fail to materialize, both voluntary carbon market, and bilateral treaty or agreement based carbon emission rights credit markets will emerge to create, purchase and trade REDD based carbon emission credits, be they Indonesia originated or otherwise.

The Government of Japan under the leadership of the Ministry of Economy, Industry and Trade has signed an MOU with Indonesia for development of bilateral carbon emission rights, and one Japanese firm was appointed by the Government of Japan to pursue REDD opportunity in Indonesia. Another Japanese private firm was appointed by the Government of Japan to look into REDD carbon emission rights credits in South America. Although it is still ambiguous as to how this bilateral mechanism will co-exist with or replace post-Kyoto, it is imperative that Indonesia be ready and prepared to create market based REDD carbon emission rights credits not only to reduce carbon emission globally in an effective and economical way but also to ascertain that Indonesia not lose the opportunity to actively participate in this new upcoming market.

PP and SG will jointly develop market based REDD carbon emission rights credits, and will try to market these credits in post-2012 global carbon market, voluntary carbon market including CSR (Corporate Social responsibility) sector, and a number of bilateral carbon markets that are being formed for post-2012.

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