- The Indonesian government has decided to terminate a $1 billion deal with Norway under which Indonesia preserves its rainforests to curb carbon dioxide emissions.
- The Indonesian government says the decision is made after thorough consultations and cites lack of progress in the payment by Norway as one of the reasons for the termination.
- The Indonesian government says it remains committed to reduce greenhouse gas emissions despite ending the agreement.
- The Norwegian government says the two governments had been engaged in discussions on a legal agreement for the transfer of the payment, and the discussions were still ongoing and progressing well up until the announcement.
JAKARTA — Indonesia has terminated a long-standing agreement with Norway, in which the latter agreed to pay US$1 billion if the forest-rich tropical country is able to slow its emissions from deforestation.
The Indonesian government cited lack of progress in the payment as one of the reasons to terminate the agreement, enshrined in a Letter of Intent (LOI) signed by the two countries in 2010 under the REDD+ (reducing emissions from deforestation and forest degradation) mechanism.
Indonesia is home to the world’s third-largest span of tropical rainforest, after Brazil and the Democratic Republic of Congo. When these rainforests are destroyed or degraded, large amount of CO2 emissions are released into the atmosphere.
Indonesia has been among the world’s top emitters of greenhouse gases from deforestation, forest fires and peatland destruction, but its deforestation rate has been declining in the past few years.
In 2019, the Norwegian government agreed to pay 530 million Norwegian Krone ($56 million) for Indonesia preventing the emission of 11.23 million tons of carbon dioxide equivalent (CO2e) through reducing its rate of deforestation in 2017.
When the announcement was made, environmentalists lauded it, saying that the funding serves as both an acknowledgement of the years of efforts to reach this stage of protecting the country’s forests, and an incentive to boost measures to combat deforestation.
Therefore, the decision to terminate the agreement took many environmentalists by surprise.
The Indonesian Ministry of Foreign Affairs said it made the decision “after a series of thorough inter-ministerial consultations.”
The Indonesian government also cited the lack of concrete progress on the payment as one of the reasons why it made the decision.
Alue Dohong, the Indonesian deputy minister for environment and forestry, previously said that the Southeast Asian country had fulfilled all of the requirements for the payment to be made.
“What I know is that [the payment] hasn’t been made by Norway,” he told Mongabay. “That’s one of the possible reasons why the LOI is terminated in my opinion.”
Responding to the termination, the Norwegian government said the two governments had been engaged in discussions on a legal agreement for the transfer of the result-based payment, with the contribution planned to be disbursed to the newly established Indonesian Environment Fund (IEF).
“Up until today’s termination announcement, discussions in this regard were ongoing and in Norway’s view constructive and progressing well, within the frameworks set by our two countries’ regulatory limits,” the Norwegian government said in a press statement.
Despite the termination, the foreign ministry said it won’t affect Indonesia’s commitment to reduce greenhouse gas emissions and tackle climate change.
“Indonesia has recorded many significant progress and achievements to fulfil its obligation under the Paris Agreement, which has been ratified, including in attaining sustainable development goals (SDGs),” the ministry said. “Indonesia’s achievement can also be seen, among others, on the lowest rate of deforestation in the past 20 year, including the significant reduction on forest fires.”
The Norwegian government said it would continue to support Indonesia’s efforts to combat deforestation.
“Given our commitments in the Letter of Intent, and Indonesia’s impressive results, we were looking forward to supporting Indonesia’s efforts with similarly significant annual contributions in the years to come,” the Norwegian government said. “We have highly appreciated our collaboration and stand ready to continue supporting – in mutually agreeable ways – Indonesia’s efforts in protecting its forests and peatlands.”
Note: the article has been updated on 9/11/2021 to reflect the Norwegian government’s response.
Banner image: A Sumatran tiger (Panthera tigris sumatrae). Image by Rhett A. Butler/Mongabay.
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