Market demand for forestry products and services The Clean Development Mechanism Research and development

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d. Market demand for forestry products and services

Global demand for plywood, sawn timber, moulding, and furniture will continue to rise. In 2010 panel based timber consumption is expected to reach 320.4 million m 3 , or up 256 from 1990. This provides an important opportunity for the Indonesian forestry industry to supply this market demand FAO 1990. Based on the amount of resources available, and current capacity, as well as continuing efforts to develop the forestry sector, Indonesia will be able to benefit from this opportunity Figure 25.

e. The Clean Development Mechanism

The rate of forest degradation in the last five years was 2.8 million ha per year, and the area of Forest Area to be rehabilitated has reached 59.17 million ha. At the same time, the government’s ability to carry out rehabilitation is limited and alternative funding sources are needed. The Clean Development Mechanism CDM is one option for financing the rehabilitation of damaged areas within the Forest Area. This mechanism has been simplified and provides incentives linked to carbon trading. Indonesia is able to offer non-forested areas that are eligible for funding through the CDM. The form of rehabilitation through the CDM can be as community or industrial forests. However, to qualify for CDM funding, several conditions need to be met, including clear land rights. Meeting these conditions will be a challenge for the forestry sector in the future.

f. Research and development

By 2004, the Forest Research and Development Agency FORDA had developed various innovations that can be used to support forestry development. Among key research results is a patented palm oil processing method right no. H3. HC. 04.02. D5265. Timber Source: WWW. FAO.orgFAOSTAT 2005 Figure 25. Global import trends of forest products 5 10 15 20 25 30 35 40 45 98 99 00 01 02 03 04 B ill io n U S D Plywoods Sawn Timber Pulp Furniture 27 from oil palms is a potential alternative source of raw material for forestry industries in the future. Other research results involve genetic engineering, bio-diesel production, mycorrhizae, and a registered computer program for a timber atlas registration number 026347. These research results can contribute to future forestry development Figure 26.

g. Environmental services and non-timber forest products