Climate Governance and Decentralization in Indonesia

10
Climate Governance and Decentralization in Indonesia

monica di gregorio and moira moeliono
10.1 Introduction
Indonesia represents an interesting case for analysis of the relationship between
multi-level governance and climate governance for three main reasons. It is a
highly decentralized country; it is a major contributor to land-based greenhouse
gas emissions; and it is extremely vulnerable to climate change. The chapter first
provides a broad overview on Indonesia’s climate governance in the context of
decentralization, and then focuses on sub-national governance of climate change
mitigation in the land use sector, the largest contributor to greenhouse gas
emissions in the country.
Indonesia illustrates key advantages of highly decentralized polity structures.
Political autonomy has facilitated sub-national climate action through direct
engagement of provinces with transnational climate initiatives, and the multiplicity
of forums for policymaking has allowed certain provinces to champion sub-national
engagement in climate change policy. Decentralization has also facilitated
experimental policies in the form of innovative sub-national jurisdictional approaches
to climate action in the land use sector. At the same time, though, peculiarities of the
decentralization approach in the land use sector have led to perverse incentives that
hamper forest-based climate change mitigation action. Drawing on in-country
expertise and interviews with provincial government officials from ten highly
forested provinces, this chapter explores the relations between national and provincial
governments in the processes of forest-based climate change mitigation.
10.2 Climate Change and Land Use Emissions in Indonesia

As a tropical archipelago with a large population chiefly dependent on agriculture,
Indonesia is particularly vulnerable to climate change, due to both sea level rises
and worsening of extreme weather events leading to the increased frequency and
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Climate Governance and Decentralization in Indonesia 199
intensity of floods, droughts, and landslides (ICCSR 2009). El-Niño events and
carbon rich peatland compound risks of increased emissions from forest fires due
to droughts and to human- and climate-induced soil disturbance (Sloan et al.
2017). Climate change has already led to increased food insecurity (Boer and
Subbiah 2005).
In 2014 Indonesia became the sixth largest greenhouse gas emitter in the world,
and the largest forest-based emitter, due largely to conversion of forest into
agriculture (WRI 2020). Since the 1990s, land-use change and forestry has emitted
three to four times as much greenhouse gases as the energy sector. Rainforests
remove atmospheric carbon and are major stores of carbon, so disturbances lead to
release of carbon. Indonesia still contains the third largest tropical rainforest area
after Brazil and the Democratic Republic of Congo, but it had one of the highest
rates of deforestation worldwide of around 0.7 per cent between 1990 and 2015.
Since 2016, primary forest loss has been declining (Global Forest Watch 2020).
Forest conversion is the highest priority for mitigation action and requires an
integrated approach across forestry and agriculture (Di Gregorio et al. 2017).
Carbon emissions by province reveal differences in levels and sources
suggesting the need for distinct jurisdictional approaches to reduce emission
reductions. The two very highest emitting provinces are in Sumatra (North
Sumatra and Riau) and their emission are more than double over any other
Indonesian province. They are followed by East Java and Central Kalimantan and
a number of other outer island provinces (Utami et al. 2016). The main source of
emissions also differs across provinces. In the more extensive but less populated
outer islands, land use change and forestry largely outstrip any other source. In
highly populated regions, such as Java, energy production tops the charts.
Forest conversion into agriculture is driven largely by oil palm expansion.
Indonesia supplies nearly 50 per cent of palm oil worldwide; demand is predicted to
increase and will contribute to drive deforestation in the absence of improved
sustainable practices (Schebek et al. 2018). The pressure on forests and the extent
and rate of conversion differs across regions. The highest emitting provinces in
Sumatra contain the most extensive areas of oil palm plantations. Central and West
Kalimantan follow, with some of the highest rates of deforestation and contain a mix
of extensive oil palm areas closer to the coast and large tracts of natural forest inland.
Finally, Papua and West Papua are among the lowest emitting provinces, contain the
most intact areas of primary forest, and are at the early stages of deforestation.
10.2.1 Climate Change Mitigation Commitments in the Land Use Sector

Indonesia developed its first National Action Plan Addressing Climate Change
(RAN-PI) in 2007, the same year it hosted the 13th UNFCCC Conference of

200 Monica Di Gregorio and Moira Moeliono
Parties (COP) in Bali. COP13 led to the inclusion of avoided deforestation as a

carbon sink approach to account for greenhouse gas reductions. The resulting
incentive mechanism of REDD+ (Reducing Emissions from Deforestation and
forest Degradation) entails that developed countries compensate developing
countries for carbon sequestration in tropical forests. In 2009 President
Yudhoyono announced Indonesia’s pledge to reduce greenhouse gas emissions
by 26 per cent from business-as-usual (BAU) by 2020 and up to 41 per cent
subject with international support.
In 2011 Indonesia passed a moratorium on deforestation in primary forest and
peatland, which became permanent in 2019 (InPres6/2017). The main National
Action Plan for the Reduction of Greenhouse Gas Emissions (RAN-GRK), which
indicates forests and peatland as main target for emission reductions, was also
released in 2011 (PerPres 61/2011). Provincial level plans (RAD-GRK) followed.
The RAN-GRK Secretariat at the Ministry for National Development liaises with
the provinces on greenhouse gas emission reductions, follows reviews, monitoring
and reporting, and in 2019 developed the guidelines for the Provincial Low Carbon
Development Plans.
The 2016 Indonesia’s National Determined Contribution (NDC) extended the
deadline and revised the mitigation commitment to 29 per cent emission reductions
and 41 per cent with international support, against a 2030 BAU scenario of 2.87
GtCO2e (GOI 2016; Wijaya et al. 2017). The 2020 NDC confirms the target and
indicates 2060 as the net zero target date. It revised the per cent contribution
coming from forest emission reductions to 24.5, and the per cent from the energy
sector to 15.5. It also committed to forestry becoming a net carbon sink by 2030
(Ibun Aqil 2021). Sectoral mitigation targets are clearly specified in various
national regulations. They include the restoration of 5.5 Mha of degraded land
between 2015 and 2019; the restoration of 2.4 Mha of peatlands in seven priority
provinces in Sumatra, Kalimantan, and Papua; and the allocation of 12.7 Mha to
community social forestry by 2020 (BAPPENAS 2014; InPres 6/2017 2017;
PerPres 1/2016, 2016).
By December 2021, official MoEF figures suggested that 4.7 M of social
forestry areas had been allocated (MoEF 2021). Expected emission reductions in
forest and land use by the 2030 deadline for BAU is 650 MtCO2. They are
expected to cost 77 billion IDR – much cheaper than energy-based reductions, and
deliver 1.5 times the emission savings. There is little question that, at least on
paper, forestry and land use are the low hanging fruit to reach emission reduction
at the least possible cost (MoEF 2018a). In 2018 in a bid to leverage private
climate finance, the Indonesian government introduced the first green bonds to
carbon markets in 2018, and a draft of a presidential decree on carbon pricing was
released in 2021. At the same time, the targets need to be understood within the

context of major economic development plans, which include a planned expansion

of oil palm and forest plantations and mining in Kalimantan (ROI 2011).
10.3 Changing Features of Decentralization in Indonesia:

From Decentralization to Recentralization
Indonesia has undergone distinct phases in terms of decentralization and
recentralization processes and the level of devolution is not uniform across
sectors. Below we present the major shift since democratization. At the time of
President Suharto Indonesia was considered one of the most centralized of nations
(Butt 2010). After Suharto’s fall in 1998, Indonesia embarked on a extensive
democratization and decentralization process, which has been labelled as quasi-
federalist (Bertrand 2007). Overall, there are five levels of government in
Indonesia, consisting of the national government; thirty-four Provinces (propinsi);
close to 500 districts (kabupaten/kota); followed by sub-districts (kecamatan); and
villages (desa/kelurahan). Because of concerns that devolution to provinces might
strengthen pre-existing secessionist movements in Aceh and Papua,1 the
1999 regional autonomy law devolved most powers to the then-292 district
governments. This resulted in a very unusual type of decentralization, where 3rd
tier district governments enjoyed much greater autonomy than 2nd tier provincial
governments (Ferrazzi 2000). A scramble for the creation of new districts ensued,
leading to a 50 per cent increase within a decade (Pierskalla 2016).
Regional autonomy brought direct elections of heads of district government, the
creation of local legislative assemblies, increasing fiscal transfers and increased
local responsibility for public services (Lewis 2013). Political decentralization is
extensive with the first three tiers of government all having elected heads of
government and legislative assemblies. Second and third tier governments have
broad autonomy to legislate in matters not reserved for central government and are
responsible for public administration and investments, policing, infrastructure,
health, education, the labour force, small and medium enterprises, development
planning, agriculture and land management, and the environment.2 However,
whenever a regional law conflicts with a national law, the latter prevails. Central
government can also invalidate laws on national interest grounds and decisions on
local budgets, and taxes and spatial planning require central approval (Butt 2010).
Fiscal decentralization has resulted in an overall increase in public investment
spending towards social goods at the local level (Pal and Wahhaj 2017), although
being somewhat limited as revenue collection remain centrally managed. Funds are
transferred to 2nd and 3rd tier governments through a ‘general allocation grant’
indexed according to population and poverty levels. In practice, overlapping and
conflicting legislation and practices across governance levels are extremely

common (Butt 2010). However, decentralization was neither accompanied by

sufficient resources and capacity building for local governments to effectively
deliver public goods and substantially promote economic development, nor by
sufficient central government capacity to monitor local implementation effectively
(Nasution 2016). In practice, however, local government retained a very high level
of authority for a unitary state (Bertrand 2007; Shair-Rosenfield et al. 2014).
Major revisions to regional autonomy introduced in 2014 shifted many major
functions from district to province. Provinces gained oversight over district
governments restoring the first-second-third tier government hierarchy and
reversing the decentralization to districts. Environmental responsibilities in the
mining, forestry, maritime affairs, and fishery sectors were moved from district to
provincial level. At the same time central authorities introduced new administrative
penalties for mismanagement leading to the potential dismissal of heads of regional
governments, imposing increased central control over all lower tier governments.
Provincial governments are only responsible for implementing and assessing
policies, expressed as ‘educating, supervising, monitoring and evaluating and
facilitating’ (UU23/2014), while policy formulation in those sectors was
recentralized. District level forestry and mining offices have been closed as
responsibilities shifted to the province and central ministries. The 2021 law on job
creation (Law 11 2021), also called the ‘Omnibus Law’, underpins further
centralization. Intended to facilitate business development at the regional level, it
recentralized the allocation of land use permits.
10.4 Climate Governance in the Context of Decentralization

Climate change governance evolved in this changing context of decentralization
and recentralization. After outlining the main responsibilities of the central,
provincial, and district jurisdictional levels, we present some major instances of
horizontal and vertical competition, then illustrate how distinct levels of
decentralization in the forestry and agricultural sectors leads to perverse incentives
that hamper forest-based climate change mitigation processes.
10.4.1 Central Government Climate Change Architecture in the

Land Use Sector
Recentralization tendencies have affected most sectors including climate change.
In the central government, a number of departments share responsibilities around
climate change policymaking, while provincial governments are involved mainly
in implementation. The Ministry of Environment and Forestry (MoEF), and its
Directorate General for Climate Change, have a major national climate change

mandate. The ministry has a coordination role around environmental matters, but is
also a line ministry for forestry, which leads to inconsistencies and diverging
interests within the ministry. With respect to land use, most climate related work
focuses on forest-based mitigation. While the three highest levels of government
have shared mandates on the environment, forestry is much more firmly under
central control of the ministry, and even more so since the 2014 recentralization
drive. Recentralization processes are particularly relevant in the forestry sector.
Recently, these are also driving further deforestation. First, a 2020 MoEF
regulation permits clearing of forest for large scale food estates allowing the
reassignment of forest areas to ‘forest areas for food security’. Second, the
2020 Omnibus Law and associated MoEF regulations remove the requirement to
maintain at least 30 per cent of any watershed and island territory as forest lands.
In this way, the MoEF reasserts its control over state forest lands – the most
extensive land classification in Indonesia. In contrast, the Ministry of Agriculture
has a very minor role, being responsible for mainstreaming climate change into
agriculture and developing climate-smart solutions. Its main focus is on climate
change adaptation.
The coordination Ministry of National Development Planning (BAPPENAS)
has the mandate to mainstream climate change into development planning and
oversees provincial climate change plans and reporting. It is also responsible for
the national level Nationally Appropriate Mitigation Actions, which facilitate
access to multi-lateral funding, as well as for national adaptation and mitigation
policy plans and their implementation. The ministry has a major climate policy
integration role, both horizontally, working primarily on implementation in close
collaboration with all sectoral ministries, and vertically, across governance levels.
Further, the Ministry of Finance has responsibility for the overall budget and has
been claiming a mandate over any form of payments related to climate change,
including benefits-sharing mechanisms. It controls the Environment Fund
Management Agency (BPDLH), which is responsible for the management of
multi- and bi-lateral climate finance (Pham et al., 2021). Infights between the
MoEF, BAPPENAS, and the Ministry of Finance on who has jurisdiction on
climate change responses has been evident from the start as they compete for
control over the climate change agenda. In practice, the former two have
overlapping climate mandates, which are not clearly reconciled (Di Gregorio et al.
2017). The Ministry of Foreign Affairs also plays a key role – particularly in
relation to global climate change processes under the UNFCCC, because the
majority of the climate change related funding comes from international sources.
Given the cross-sectoral nature of climate change, most of the ministries work
through multi-sectoral platforms (Di Gregorio et al. 2017). The first national
committee on Climate Change and Environment was established in 1992 and

included three inter-ministerial working groups led by the Agency for

Meteorology, Climatology, and Geophysics, the Ministry of Environment, and
the Ministry of Agriculture. Under the Yudhoyono presidency the DNPI included
seventeen ministries and seven working groups, as did the REDD+ Task Force and
the REDD+ agency. BAPPENAS National Coordination Team on Climate Change
has a similar multi-agency set up (Di Gregorio et al. 2015). During Yudhoyono’s
tenure, the president’s Delivery Unit for Development Monitoring (UKP4) had a
major supervisory role across all government ministries. Notably, none of the joint
committees include sub-national agencies.
10.4.2 Provincial and District Level Climate Change Planning and

Implementation
Provincial level and district level governments are involved in local climate change
policy development and implementation. By 2013, all thirty-four provinces had
developed and enacted, through governor’s regulation, their Local Action Plans for
Greenhouse Gas Emissions Reductions (RAD-GRK). Such progress was largely
achieved first with the support of the National Climate Change Council, and later
the guidance of BAPPENAS, as well as with international programmes. Yet,
provincial plans remain vague and contain contradictory aims, with mineral and
natural resource development plans not being reconciled with climate mitigation
aims (Wijaya et al. 2017).
BAPPENAS oversees the local mitigation action plans and its regional branches
are responsible for implementation. Provinces have also developed REDD+
Provincial Action Plans. The earlier REDD+ district level strategies were repealed
following the 2014 regional autonomy changes, effectively ending any district
autonomy on REDD+ policies and shifting control over climate change to the
provinces. Aceh, West Sumatra, Jambi, South Sumatra, West Kalimantan, East
Kalimantan, Central Kalimantan, Papua, and West Papua developed their REDD+
plans with the support of the REDD+ Agency. By 2019, eleven out of thirty-four
Provinces had provincial REDD+ strategies, and five had established ad hoc
provincial levels REDD+ Working Groups (Papua, Riau, East Kalimantan, and
South Sumatra) or Joint Secretariat in South Kalimantan (Ekawati et al. 2019). For
REDD+ implementation there are four key policy features to be developed in
addition to the provincial REDD+ strategy itself: provincial reference levels,
monitoring, reporting, and verification, safeguards, and benefit sharing mechanisms.
So far, most provinces have only developed their reference level. Yet, monitoring,
reporting, and verification is necessary for carbon accounting, and safeguards and
benefit-sharing institutions are crucial to reduce trade-offs between climate change
mitigation and livelihoods and to enhance transparency (Ekawati et al. 2019).

10.4.3 Decentralization and Perverse Land Use Incentives Undermining

Forest-Based Mitigation
Policy actors responsible for land use decisions play a key role in climate change
policy outcomes in Indonesia, given that land use change is the main source of
greenhouse gas emissions and the main target for emission reductions. Two-thirds
of the Indonesian territory, 120.6 million ha, was classified as ‘forest area’ in
2017 – designated as ‘permanent forest’, although 28 per cent of state forest land is
actually not forested and 8 per cent of forest is located outside of this classification.
State forest land is divided in production (68.8 mill ha), protection (29.7 mill ha),
and conservation forest (22.1 mill ha in 2017) (MoEF 2018b).
In 2014 regional autonomy law shifted responsibility for the management of
production and protection forest from district to provincial government and
retained conservation forest management under central government authority. As a
consequence, district governments lost any authority over forestry decisions, and
provincial governments now manage forests through the Forest Management Units
(FMUs) established by the ministry. FMUs have long been the MoEF’s preferred
approach to manage the state forest estate, because they maintain substantial
central control over allocation and uses of forest lands. This leaves local
government mainly responsible for residual planning and implementation (Sahide
et al. 2016). Indeed, FMUs are the main instrument the ministry uses to secure
rights to forest areas (Nugroho 2014), and are therefore fundamental means of state
territorialization (Peluso and Lund 2011). In practice, however, only fifty-three
FMUs had an approved Long Term Forestry Management Plan in 2016 (Santoso
et al. 2019). Only a small number of FMUs are fully operational in terms of staff
and activities, and many face institutional and capacity constraints. Overlapping
claims across levels of government and between the state and local farmers remain
largely unresolved (Jodoin 2017). Thus, many FMUs remain such on paper only,
with social forestry and REDD+ projects operating in ignorance of existing
FMU areas.
Social forestry represents a very small percentage of official management
schemes, and in 2017 only 4.1 per cent of the forest estate was in fact managed by
local communities (Damarjati 2018). The MoEF simplified social forestry projects’
application processes in 2016, with the aim of facilitating achieving social forestry
targets. Issuing of permits remains centralized under the Directorate General for
Social Forestry, with FMUs having only a supporting role. Thus, the acceleration
of social forestry programmes is occurring with limited devolution to forest users.
While the MoEF interacts with NGOs implementing the schemes, local community
engagement lags behind, resulting in communities benefiting only limitedly from
social forestry designations (Suharjito and Wulandari 2019). One of the social

forestry schemes, hutan desa, has contributed slightly to avoided deforestation

between 2010 and 2015; however, deforestation rates fluctuated from positive to
negative across the years (Santika et al. 2017). In addition, the total area of hutan
desa and other social forestry schemes remains a very small fraction of the state
forest lands. Finally, new MoEF regulations in line with the 2021 ‘Omnibus Law
on Job Creation’ (Law 11/2020) allow for the first time the participation of the
private sector in social forestry schemes, which would in practice privatize the
management of some schemes. There is also evidence of alliances between MoEF
and districts against further devolution, such as resistance against the establishment
of customary forests (hutan adat), which fall outside state forest areas (Sahide et al.
2016). Further alliances have emerged between provinces and central government
against decentralization of forest management to districts. This also means that
districts experiencing overlapping claims to forest land have no authority to solve
related conflicts. In practice, the MoEF uses tactics reminiscent of a divide-and-
rule approach to retain central control over forestry (Sahide et al. 2016).
That said, the level of decentralization or recentralization is not uniform, as
districts try to maintain the autonomy they enjoyed in previous decades and
political alliances across government levels lead to a whole variety of outcomes
locally. Further, the Indonesian indigenous movement, which supports devolution
of forests to indigenous communities, has become a major political player in
decentralization processes and has achieved significant legal victories in the
constitutional court (Sahide and Giessen 2015).
Land outside forest lands remains administered by the Land Agency. Much of
this land, classified as ‘land for other uses’ (APL) is devoted to agricultural use and
district governments have extensive control over these areas. They are responsible
for issuing land use licences, while provinces are responsible for areas that span
across more than one district (Irawan et al. 2019). Consequently, district
governments have very strong incentives to lobby the MoEF to release land from
the state forest estate to ‘land for other uses’. This combination of centralized
control over state forest land and decentralized control over agricultural land, leads
to perverse incentives whereby local government has a strong interest in
accelerating conversion of forests into agriculture, which drives deforestation.
Thus, district governments play a crucial role in emissions from forest conversion,
yet they are hardly involved in climate change decisions. It is within this context of
shifting autonomy from districts to provinces and attempts by the MoEF to retain
central control of forests that the innovative sub-national developments to forest-
based mitigation have emerged. Below we present the analysis of jurisdictional
approaches to REDD+ and assess the complex national–local relations that
underpin them.

10.5 Decentralization, Forest-Based Mitigation, and Jurisdictional

Approaches to Climate Change
10.5.1 REDD+ and the Rationale for Jurisdictional Approaches
At the 2005 UNFCCC COP meeting in Montreal, Papua and Aceh – two
Indonesian provinces that have special regional autonomy status – pushed for the
introduction of a new global forest-based mitigation mechanism, later known as
REDD+. Other forest-rich provinces supported the mechanism in the hope that it
would help to finance forest conservation policies and low-carbon
emission development.
To be effective, REDD+ requires a nested approach – in other words a
substantial integration of activities and monitoring across levels of governance. In
particular, a nested approach facilitates verification of carbon accounting to avoid
double counting of emission reductions (Pedroni et al. 2009; Wertz-Kanounnikoff
and Angelsen 2009; Wunder et al. 2020). A jurisdictional approach to REDD+
integrates efforts within subnational jurisdictions to deliver emission reductions
and co-benefits across the whole territorial boundaries (Boyd et al. 2018). In
practice, jurisdictional approaches are led by sub-national governments – province
or district in Indonesia – and should include integrated land use plans, and carbon
monitoring, reporting, and verification at the scale of the jurisdiction. It is
considered a useful step to facilitate climate policy integration within jurisdictions
and make it easier to control leakage of carbon emission, which occurs when
greenhouse gases are displaced elsewhere instead of being suppressed (Irawan
et al. 2019). On paper, a decentralized political structure should facilitate nested
approaches leading to effective climate governance. Below, we investigate both
opportunities and challenges in REDD+ implementation from the perspectives of
leading provinces and assess them within the context of Indonesia’s decentralized
governance system. After presenting the main developments in jurisdictional
approaches, we investigate GCFTF’s role in facilitating provincial level
jurisdictional approaches to REDD+ in the next sections. The analysis is based
on interviews with GCFTF’s delegates from Indonesian provinces, its secretariat,
and supporting organizations undertaken between 2017–18 and the analysis of
climate change policy documents.
10.5.2 Jurisdictional REDD+ in Indonesia

In Indonesia jurisdictional approaches to REDD+ were introduced in 2008. The
World Bank and The Nature Conservancy were the first to support district level
REDD+ jurisdictional approaches (Fishbein and Lee 2015), while forest-rich

provincial governments started to engage in provincial level jurisdictional

approaches through the Governors Climate and Forest Task Force (GCFTF).
GCFTF is a transnational climate change governance initiative that brings together
sub-national governments interested in soliciting international funding for
jurisdictional implementation of REDD+ and associated Low Emission Develop-
ment (LED). Seven forest-rich Indonesian provinces – West, Central, East and
North Kalimantan, Papua and West Papua, and Aceh – are part of the thirty-eight-
member transnational network (Di Gregorio et al. 2017). Funding for jurisdictional
approaches comes primarily from multi-lateral sources and to a much smaller
extent from the private sector. In 2009, The Nature Conservancy established the
first district level jurisdictional REDD+ project in Berau district in East
Kalimantan. In 2014, after the revision of the regional autonomy law, it started
to build stronger linkages at provincial level, supporting the East Kalimantan
Green Growth Compact, which brings together 150 partners to tackle landscape
challenges, and collaborating with the Provincial Council on Climate Change
(Hovani et al. 2018). The REDD+ national strategy discusses the role of pilot
provinces, but not specifically jurisdictional approaches. Central Kalimantan
became the first REDD+ pilot province in 2011, with efforts concentrating at
provincial level. In 2020 the World Banks’ Forest Carbon Partnership Facility
agreed to support jurisdictional REDD+ in the province of East Kalimantan
through its Carbon Fund, while the Bio Carbon Fund supported the jurisdictional
scheme in Jambi province. District level REDD+ jurisdictional schemes have been
underway in Kapuas Hulu and Kubu Raya in West Kalimantan with the support of
GIZ, NICFI, and UNDP. Finally, Unilever ‘s private scheme supports sustainable
sourcing of palm oil in Central Kalimantan (Seymour et al. 2020).
The drive towards jurisdictional approaches to address climate change started
largely outside of the national climate change policy processes through the
collaboration between sub-national governments and international and domestic
non-state actors. Over time, the discourse shifted from purely REDD+
jurisdictional approaches to broader Low Emission Development (LED)
approaches – although in practice the focus remains largely confined to forest-
based mitigation (Di Gregorio et al. 2020; Seymour et al. 2020). GCFTF supports
primarily provincial level jurisdictional approaches, which fit well the latest legal
provisions on regional autonomy. That said, district level jurisdictional initiatives
can be accommodated within these.
After just over a decade of REDD+ readiness activities in Indonesia, the first
performance-based payments for emissions reduction were agreed in 2020. In May
that year Norway approved a payment of US$56 million for emissions reductions
achieved between 2016 and 2017. In August the Green Climate Fund approved a
further US$103.8 million for the years 2014–16. The funds are managed centrally

through the Environmental Fund Management Agency (BPLDH) established in

2019, which is also responsible for evaluating and approving submission of
proposals for funding, including from sub-national governments or non-state
actors. A substantial amount is earmarked to extend and enhance social forestry
(US$47 million) and FMUs (US$47 million), while the rest supports Indonesia’s
broader REDD+ architecture (Yong 2020). As social forestry and FMUs are
subject to substantial central control by the MoEF and are managed and
implemented through its provincial offices, the MoEF is likely to have access to
substantial funding. Still, at present it remains uncertain how exactly the funds will
be disbursed across levels of governance, across different actors, and how they will
contribute to the funding of jurisdictional REDD+ schemes at provincial or district
level. We do know, though, that part of the performance-based REDD+ payments
will support three pilot provinces of Aceh, West, and Central Kalimantan to
implement deforestation-free agriculture (GCFTF 2021; Seymour et al. 2020).
10.5.3 The Scramble for Control Over the REDD+ Policy Mandate
at National Level
Within the national government, REDD+ is considered a ‘national plan with
regional implementation’ (Ekawati et al. 2019). It is thus similar to the largely
recentralized sectoral approach in forestry, and reflects attempts on the part of the
MoEF to retain control of climate change policy decisions related to land use and
associated budget lines. A clear indication on the part of the MoEF to claim the
mandate to control forest-based mitigation policy has been evident since the very
beginning. The MoEF used its power to challenge and ultimately change the
organizational climate change and land use policy architecture.
Under the Yudhoyono presidency, and in line with Norway’s pressure, the
climate change policy mandate fell under the semi-independent entities of the
National Council on Climate Change (DNPI), the REDD+ Task Force, and later
the REDD+ Agency, who held the mandate for climate change and land use policy
development. The office of the president had strong oversight on integration of
REDD+ in ministerial policies and action plans through the president’s Delivery
Unit for Development Monitoring (UKP4). The ministries, in particular the
Ministry of Forestry, strongly contested being side-lined from major REDD+
policy decisions and lobbied for control over the climate change policy mandate.
In practice, the Ministry of Forestry already had a very strong influence on the
national REDD+ policy domain (Brockhaus and Di Gregorio 2014) through its
control over forest land. And it used FMUs and social forestry as a means of
further strengthening its territorial control. With the election of Widodo to
president in 2014, the tables turned and ministries regained full control over

climate policy, as the semi-independent REDD+ agencies and UKP4 were

dismantled. The merger of the Ministry of Forestry and Ministry of Environment
the same year consolidated the control under the newly established Directorate
General of Climate Change of the MoEF.
The increased interest of the Government of Indonesia in carbon finance denotes
a major intention to raise international private funds to fund REDD+ activities. The
national government aims to control carbon finance centrally, and in 2017 the
MoEF contacted forest licence holders indicating that they could not independently
engage in carbon trading activities (Pham et al. 2021). Further, the 2020 pre-
sidential decree draft states that only designated organizations (the BPDLH, the
Steering Committee of Carbon Pricing, the MoEF, and connected agencies) would
be authorized to engage and manage carbon markets. There are already
organizations, including Ecosystem Restoration Concessionaires, that engage in
voluntary carbon markets, and if the decree is adopted it will affect their ability to
directly engage in such transactions (MMIA 2020; Pham et al. 2021). At the same
time, there are also important countervailing tendencies that push for a more
decentralized approach to climate policies, such as the push on the part of the
GCFTF for jurisdictional approaches to be largely under the control of provincial
governments.
10.5.4 The Governor’s Climate and Forests Task Force and Jurisdictional
REDD+
For the first decade of its existence GCFTF was largely a transnational network
that facilitated information sharing, capacity building, and target setting among its
thirty-eight sub-national jurisdictions across ten countries. Its main aim was to
solicit international funding for provincial level jurisdictional REDD+ as well as
broader Low Emission Development. California’s membership denotes the attempt
to link REDD+ to future sub-national carbon markets. At present, however, REDD
+ funding opportunities are mainly realized through overseas development aid
(Angelsen 2017). In 2020, Norway agreed to fund the implementation of
jurisdictional approaches pledging 25$ million to be managed by the UNDP (Di
Gregorio et al. 2020). This infusion of funds has increased the relevance of GCFTF
to national climate change interests.
According to Indonesia’s provincial delegates, the GCFTF enhances the
opportunities for provinces to engage in climate change action in a number of
ways. It provides opportunities for provincial government to pursue a bottom-up
governance approach to climate action that draws on the vision of governors
themselves, and it helps both to put and to keep the climate change and forest on
the provincial policy agenda. It also strengthens the visibility of provinces as

climate change leaders, raising the profiles of provinces at the national level.
Finally, GCFTF also facilitates interactions among the various Indonesian
provinces that are engaged in forest-based climate change mitigation. All
Indonesian provincial GCFTF member governments value the platform’s
contributions around these functions.
10.5.5 Provincial Governments’ Visions on Climate and Forest

Provinces’ visions on climate and forests revolve largely around achieving
sustainable development outcomes through green growth, illustrating a clear
ecological modernization approach, in which forest conservation and greenhouse gas
emission reductions go hand in hand with economic development opportunities. The
final aim is to enhance economic benefits and improve local standards of living.
Among the ten provinces, only West Kalimantan included the aim of reducing
greenhouse gas emissions themselves at the core of its vision for climate and forests.
East Kalimantan and West Papua put more emphasis on the practical aim of
leveraging carbon offset finance. Only two provinces, Aceh and West Papua,
highlighted that the final aim of improving forest management and reducing
emissions is to provide benefits for local communities. Thus, there is a clear
discrepancy between the global REDD+ discourse that aims to reduce emissions,
and the visions of provinces, which put much more emphasis on economic co-
benefits. At the global level, REDD+ climate discourse includes safeguards that are
limited to avoid detrimental effects on livelihoods, while the REDD+ national
strategy includes the creation of additional benefits for local people’s welfare in the
main scope of REDD+ alongside emission reductions. Thus, the global, and to some
extent also the dominant national REDD+, discourse differs from that of the
provinces, which have a stronger focus on local economic development objectives.
According to delegates, the main challenge that provinces face in achieving their
vision for climate and forest is the pressure from the drivers of land use change in
terms of the conversion of forest into agriculture – in particular plantation
agriculture – and to a smaller extent mining. They suggest that the latter in
particular is largely driven by powerful national level actors. The new Omnibus
Law and the MoEF regulation on food estate in forest areas also suggest that
national level drivers are becoming more dominant. Papua and West Papua are the
only provinces to mention poverty as being a major driver of deforestation, and
lack of institutional capacity and weak community participation as major
challenges. Thus, despite the general adoption of ecological modernization ideas,
provincial governments are much more aware and concerned than national and
global actors about real trade-offs between achieving economic development and
environmental sustainability.

10.5.6 Relations between the National and Provincial Governments

Although predominantly a global platform, delegates indicate that GCFTF creates
visibility for provincial governments at national level. As an example, with
GCFTF’s support West Papua was able to organize a meeting bringing together all
seven Indonesian member provinces and the MoEF, providing an opportunity to
showcase provincial interests and efforts, enhance the visibility, and consequently
the influence of provinces on national climate action. The main challenges
mentioned by provincial delegates in terms of national–provincial relations are
national level resistance to jurisdictional approaches; major bureaucratic burdens
imposed by national government; and the misalignment of policy goals between
national and provincial visions. National resistance takes shape in many
different forms.
Provincial delegates – in particular those from the provinces with special
status – denounce the lack of autonomy in relation to institutions around climate
change as a major challenge. Others, however, also indicated that a higher level of
autonomy, such as would exist in a federal system, might translate in more
competition among federated entities and diverging policy agendas that might lead
to lack of alignment across jurisdictional approaches. A main challenge to develop
and implement jurisdictional REDD+ approaches at provincial level was uniformly
identified by all delegates as insufficient funding. Limited resources, in particular
extremely limited environmental budgets, constrain the ability of provinces to take
climate action.3 Any large-scale funding has to go through central government
institutions, and delegates talked about the bureaucratic burden of the disbursement
process, and the high levels of uncertainty about the level of funding for provinces.
In Indonesia, as in many other REDD+ countries, there is an institutional vacuum
that is reflected in the lack of rules on the distribution of REDD+ benefits across
jurisdictional levels, which fuels uncertainty and leaves decisions largely at the
discretion of central government.
It also seems that GCFTF fills functions left vacant by national government in a
number of areas. First, it facilitates linkages between provinces and international
donors. In a well-functioning multi-level governance system, central government
should facilitate such linkages. Instead, several Indonesia provinces indicated that
GCFTF played an important role in facilitating direct contact with Norway and the
World Bank, which are major funders and supporters of jurisdictional approaches.
Second, it facilitates interactions across the various Indonesian provinces. GCFTF has
assigned coordinators for countries such as Indonesia, that have a number of member
provinces. This also comes with a budget for joint activities as prioritized by the
provinces. Delegates suggest that such joint activities build and strengthen in-country
blocks of like-minded jurisdictions, which enhances their power in subsequent
interactions with national government. Third, GCFTF has helped provinces connect

to private sector actors willing to funds jurisdictional initiatives. For example, the
GCFTF Indonesia coordinator facilitated Unilever’s connection with Central
Kalimantan government, which is the first public–private climate initiative on
smallholder oil palm certification, operating in two districts in the province.
10.6 Conclusion
In a country as diverse as Indonesia, it would be expected that decentralization
supports and facilitates climate action – although it might also create coordination
challenges between central and provincial governments. Our evidence showed
how provinces are attempting to design climate plans that cater to their specific
contexts and needs, but are limited in their ability to experiment. In the land use
sector, the institutions and processes of decentralization have created some serious
obstacles that hamper forest-based mitigation action. First, a legacy of limited
decentralization of the forestry sector in an otherwise highly politically
decentralized polity, have created a set of institutional legacies leading to perverse
incentives that fuel further deforestation and reduce the ability of provinces to lead
forest-based climate mitigation action. Further, districts have largely been
excluded from climate change decision making, although they might host major
climate mitigation projects. As the sector is attracting substantial international
climate finance for mitigation action, recentralizing tendencies of forestry
bureaucrats have become more pronounced, as has the competition among
sectoral ministries for the control of the climate policy agenda. Districts, and some
of the provinces, perceive these developments as a loss in regional autonomy, and
an institutional failure in fully adopting the subsidiarity principle. But these
recentralizing tendencies do not remain unchallenged.
Sub-national governments have been able to facilitate policy innovation and
diffusion, but largely with the help in international processes. New transnational
climate governance initiatives support collective action institutions linking
provincial governments, facilitating learning and socialization of climate action
across provinces. Such support also enhances the visibility of provinces in the
national climate change domain. Provincial governments have been using these
platforms to develop and disseminate their own ideas and visions for climate and
forests. Provinces are increasingly leading jurisdictional approaches to REDD+
and Low Emission Development, despite evidence of resistance by the central
government to devolve resources and decision-making power. As implementation
of these approaches is just past the pilot phase, it remains to be seen how
effectively they will contribute to emission reductions. Constraints on regional
autonomy, institutional bureaucratic burdens, limited and uncertain access to
funding, and misalignment of national policies with local needs remain some of the
key challenges that provinces face vis-à-vis the central government.

At the same time, both national and sub-national governments experience high,
although distinct, pressures from private forestry and agribusiness interests driving
deforestation that historically contributed to economic development to the detriment
of the environment. National and provincial governments will only overcome such
pressures if they collaborate more effectively. Instead of working together,
bureaucratic national interests seem to be competing with provincial governments
in a scramble for control of land, forests, and climate change mandates. Cooperation
is further hampered by the distinct ideas on the future of climate and forests between
national and provincial interests. More inclusive national climate change institutions
willing to devolve resources and decision-making power to localities would be more
conducive not just to global and national climate change emission reduction targets,
but also to important sustainable development targets that are central to the visions
and ideas of localities.
There seem to be major differences between decentralized polities, such as
Indonesia, and federal systems in the governance of climate change. In
decentralized systems, institutions and policies underpinning devolution are more
likely to be in flux, and change in response to changes in government, changes in
policy agendas, and in the constellation of power across governance levels. This is
particularly true in emerging policy domains, such as forest-based climate change
mitigation. Decentralization in Indonesia is subject to ongoing political
negotiations between the centre and the periphery, and competition over the
climate agenda and the associated uncertainty hamper effective forest-based
climate change mitigation. Whether a more extensive form of devolution in the
climate change arena would translate in enhanced emission reductions remains an
open question. It would, however, likely reduce competition across governance
levels, which currently hampers effective climate action.
Notes
1 Aceh and Papua gained special autonomy in 2001.
2 Central government is responsible for foreign affairs, defence, national monetary and fiscal matters,
and religion. The law, however, also states that central government retains authority to legislate on
any area not mentioned in the law.
3 Although interviews were done before the 2020 disbursement of funding, at the time delegates
knew that Norway had committed 25 $Mill to support jurisdictional REDD+ implementation at
provincial level.
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Climate Governance and Decentralization in Indonesia

10.2 Climate Change and Land Use Emissions in Indonesia

https://doi.org/10.1017/9781009249676.011 Published online by Cambridge University Press

10.2.1 Climate Change Mitigation Commitments in the Land Use Sector

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Parties (COP) in Bali. COP13 led to the inclusion of avoided deforestation as a

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context of major economic development plans, which include a planned expansion

10.3 Changing Features of Decentralization in Indonesia:

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common (Butt 2010). However, decentralization was neither accompanied by

10.4 Climate Governance in the Context of Decentralization

10.4.1 Central Government Climate Change Architecture in the

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included three inter-ministerial working groups led by the Agency for

10.4.2 Provincial and District Level Climate Change Planning and

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10.4.3 Decentralization and Perverse Land Use Incentives Undermining

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forestry schemes, hutan desa, has contributed slightly to avoided deforestation

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10.5 Decentralization, Forest-Based Mitigation, and Jurisdictional

10.5.2 Jurisdictional REDD+ in Indonesia

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provincial governments started to engage in provincial level jurisdictional

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through the Environmental Fund Management Agency (BPLDH) established in

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climate policy, as the semi-independent REDD+ agencies and UKP4 were

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10.5.5 Provincial Governments’ Visions on Climate and Forest

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10.5.6 Relations between the National and Provincial Governments

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Bertrand, J. 2007. ‘Indonesia’s Quasi-federalist Approach: Accommodation amid strong

https://doi.org/10.1017/9781009249676.011 Published online by Cambridge University Press

https://doi.org/10.1017/9781009249676.011 Published online by Cambridge University Press

ROI (Republic of Indonesia). 2011. Masterplan: Acceleration and expansion of Indonesia

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