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reimbursement, possibly through fund sources, in return for lessons which can be used to establish national management principles for each forest industry.
There would be opportunity in negotiation between the Ministry of Forestry and the proponents to agree a set of project management guidelines which applied
the strategic reforms recommended for each forest sector in Chapter . After the implementation of a systematically chosen set of demonstration projects it should
be possible for national management guidelines to be defined, which could then be appended to permits issued nationally to individual projects. Providing the
projects were then implemented according to permit guidelines each could then expect reimbursement on the basis of a statistically established rate of emissions
saving. This national compliance based system would run independently and parallel to
the voluntary market which will always be market-based and where remuneration
of projects will result from direct trading between project sellers and buyers, a situation which will not occur in the compliance market.
6.2.3 Selection of Demonstration Activities
Based upon the above considerations, proposals for specific REDD demonstration activities could be received from any sectoral agency and from any level of
government as well as from civil society. Following the principle that the project should be testing issues associated with implementing the REDD supply chain
and the subsequent distribution of payments as well relevant COP- decision on demonstration activites, successful proposals could, typically require partnerships
among stakeholders representing all the steps in the process. Reduction of emissions, the sale of the credits and the distribution of the resulting
finance involves action at many levels of scale from local to national and from one forest land management sector to another. Demonstration Activities could
therefore be identified which had a primary focus on issues of scale, as well as on issues associated with individual sectors.
Projects selection needs to encompass the range of forest sector uses, viz.: . Protected Areas, including conservation reserves Kawasan Konservasi
and national parks under National jurisdiction; TAURA under Province jurisdiction; and protection forest Hutan Lindung under District jurisdiction.
. Natural Production Forests . ndustrial Plantation Forests, especially for the production of pulp for paper
production; and . Oil Palm Plantation
Selection of geographical locations should also allow for the testing of circumstances in forests that are on:
. Peat soils and . Mineral Soils
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With respect to peat soils sites with deep peat should be given priority. These include districts in the provinces of NAD, Riau, Jambi, East Kalimantan, Central
Kalimantan and Papua. To determine the effectiveness of managing encroachment through alternative
business development community development, site selection needs to encompass locations Districts where the access to the forest by neighbouring
communities is: . igh
. Low Site selection needs to consider locations where REDD benefits can contribute
to a broad range of social and infrastructure improvements, demonstrating the capacity of the new carbon mechanism to address poverty alleviation and
opportunity growth, in return for forest stewardship, not encroachment. Site selection should also consider potential cooperation from forest industries
willing to implement improved management through, for example, adopting Reduced mpact Logging RL ; international benchmark plantation operation;
and certification, as a means of testing opportunity cost incentives. ow these locations are distributed across the country will require detailed
attention to maximize lessons learnt while minimizing confounding influences making the lessons difficult to generalize.
One very significant aspect in relation to this issue is to determine how to deal with the issue of cross-subsidization between regions to take into account the risk
of perverse incentives. Perverse incentives would apply if a regional government were to decide – after following a land use decision making process which had
permitted extensive deforestation and forest degradation - to follow an economic development which conserved all remaining forest. The change in land use would
reflect a large number of REDD credits because of the marked reduction against BAU. Conversely where a regional government had followed a development
pathways which had retained extensive areas of forest, adoption of REDD would result in a relatively smaller number of credits because the land use decisions
would not produce large gains against BAU. n terms of a national screening of approved demonstration activities , an objective
should therefore be the inclusion of regions which: . ad a high forest cover; but high rates of deforestation;
. ad high forest cover and low rates of deforestion; and . ad lower forest cover but low rates of deforestation.
The fourth option: low forest cover and high rates of deforestation, is unlikely to be a significant concern in practice.
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6.3 Achieving Readiness: building the REDD infrastructure
