METHODOLOGY 1 Framework Prosiding INAFOR III 2015 FullIssue low rest

Bogor, 21-22 October 2015 340 preparation and big effort. As indicated that during readiness phase, REDD+ activities in Indonesia are focused on preparation of the methodologies, policies and demonstration activities Masripatin et. al., 2010. Sustainability of REDD+ investments will depend on the ability of developers to maintain forest cover in a long time and prevent negative impacts from development on the economic, social and environmental Peskett Harkin, 2007. Economically, the feasibility of the implementation of REDD+ depends on the profitability of alternative land uses Butler et. al., 2009. The potential benefit of forest resources is very high due to high biodiversity , flora and fauna Rohnstock, 2012 . Merang REDD Pilot Project MRPP located in Musi Banyuasin District is one of the REDD demonstration activities. It was managed by MRPP- GIZ until 2012 MRPP, 2009. Pressure on forests resources are in various activities such as encroachment and illegal logging MRPP, 2009 that occurs as a result of poor socio-economic condition and higher opportunity cost of other land uses such as agriculture and plantation. This paper aims to i identify sources of uncertainty as well as types and levels of risk; ii measure impact of the risks that comes from REDD+; and iii provide alternative strategies to reduce the risk of failure. This paper would be usefull for policy makers and investors. 2. METHODOLOGY 2.1 Framework The success of REDD+ implementation depends on whether or not REDD project developer can prevent deforestation and forest degradation. There are two kinds of risks in REDD project i.e. leakage and non-permanence risks. These risks are highly correlated with the complexity of factors of deforestation and forest degradation Angelsen Kaimowitz, 1999. The risks will affect the flow of benefits and costs. The level of risk that will determine the feasibility of implementing REDD+ at the site. REDD+ risk analysis begins with identifying types of risks Warmink, Jansen, Booij, Krol, 2010. This study identifies all the risks that exist or that may occur due to various uncertainties. In general, the risks that may arise in the implementation of REDD+ can be divided into four 4 groups, namely 1 the risk of the activity level; 2 risk management such as tenure; 3 the risk of carbon markets; and 4 the quality of the developer Ebeling, 2007. In practice, risk assessment is based on the elements of the risks set out in the technical guidance of Verified Carbon Standard VCS, 2008. In order to minimize risks that potentially impact on REDD+ failure, it is necessary to identify sources of uncertainties . These uncertainties are associated with profitability of alternative land use in the area and the socio-economic dynamics in the region. To measure the impact of risks on the feasibility, there are three stages used, as folows: Stage I: conduct a review of the relevant literature on the implementation of REDD+ activities in Indonesia and from other countries; identify potential risks involved in the implementation of REDD+ . Stage II: assessing level and impact of emerging risks in each phase of the implementation of REDD+ based on the technical guidance VCS. Measuring the impact of risk on feasibility of REDD+ by using a matrix effects provided by VCS, as presented in Table 6. Stage III: formulation of risk management strategies for REDD+ implementation. Bogor, 21-22 October 2015 341 Figure 6: Logical Framework Table 6: Impact of risks on feasibility of REDD+ implementation Risk level Impacts of risks on feasibility Low 10 Medium 10-30 High 30-40 Source: VCS, 2008 2.2 Sampling Method and Study Site Primary data were collected from interview with decision makers. Respondent were divided into 4 four groups, namely the group of central goverment, local goverment, manager or practician and public in general. The primary data was collected in 2012 through in-depth interviews , especially to identify potential risks of REDD+ implementation . Determination of respondents from each group was conducted with a purposive approach- snow ball sampling in accordance with the requirements . While secondary data were collected from the management of activities , namely MRPP- GIZ. The site is located in Musi Banyu Asin District – South Sumatra. Figure 2: Map of MRPP in Musi Banyuasin, South Sumatra Source: MRPP 2011 UNCERTAINTIES LAND USE CHANGE AGRICULTURE PLANTATION, FOREST, MINING, SETTLEMENT SOCIAL - ECONOMIC RISKS LEAKAGE AND NON-PERMANENCE BENEFITS OF REDD+ IMPLEMENTATION COSTS FEASIBILITY OF REDD+ MRPP Site Bogor, 21-22 October 2015 342 3. RESULT AND DISCUSSION 3.1 Potential of reducing CO