Overview

Indonesia, with over 120 million hectares of forest, has the third-largest tropical forest area in the world, after Brazil and the Democratic Republic of Congo. To achieve long-term economic and social development goals, Indonesia has committed to participating in global efforts to address the negative impacts of climate change and limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels. The Indonesian government aims to reduce Greenhouse Gas (GHG) emissions by 31.89% unconditionally and up to 43.20% conditionally by 2030. Approximately 97.2% of the Nationally Determined Contribution (NDC) target comes from the forest and other land use (FOLU) and the energy sectors.

The FOLU sector, which includes Reducing Emissions from Deforestation and Forest Degradation, sustainable management of forests, conservation and enhancement of forest carbon stocks (REDD+), is expected to contribute 17.4% to 25.4% of the overall NDC target. 

In this context, Indonesia, with support from the United Nations Development Programme (UNDP), is implementing a REDD+ Results-Based Payment (RBP) project funded by the Green Climate Fund (GCF) from 26 May 2021 to 26 May 2025. The project received a RBP of USD 103.78 million from GCF as payment for 20.25 million tco2eq of emissions reductions achieved from deforestation and forest degradation under its REDD+ program for the period 2014 to 2016. 

The project is managed by the Project Management Unit (PMU) of the Indonesian Environment Fund and overseen by the Ministry of Finance, the Ministry of Environment and Forestry, and UNDP. 

Objectives

The main objective of the project is to contribute to the achievement of NDC and National REDD+ Strategy (STRANAS) goals by reducing GHG emissions from the FOLU sector, in line with Indonesia's Medium-Term National Development Plan 2019-2024, and to support decentralized sustainable forest governance by enhancing Social Forestry and Forest Management Units (KPH) programs, which are two strategic and innovative national priority programs. The aim is to to achieve the double objectives of sustainable forest management and rehabilitation, as well as community empowerment and poverty alleviation.

The Theory of Change (TOC) and project interventions are highly relevant to the Indonesian Government's objectives of ensuring that the agriculture and FOLU sectors contribute to national economic development and the implementation of the updated NDC submitted to the UNFCCC in 2022. The project also aims to contribute to the strategic goals of the FOLU Net Sink 2030. It supports the update through the development of REDD+ architecture, strengthening REDD+ implementation capacity in key thematic areas such as the National Forest Monitoring System (NFMS), updating the STRANAS, Subnational REDD+ Action Plans (SRAPs), benefit-sharing mechanisms, the Safeguard Information System for REDD+ (SIS-REDD+), and policy and regulatory reforms.

Key Milestones in Indonesia

The GCF REDD+ RBP project contributes to the set up of a supportive framework for Indonesia's climate goals. Key achievements include submitting an updated Forest Reference Emission Level (FREL) to the UNFCCC and revising the STRANAS. These steps are crucial for reaching the country’s NDC and FOLU Net Sink 2030 targets.

The project has improved the National Registry System for Climate Change (SRN PPI) and integrated it with other monitoring systems, making it easier to track and manage climate actions. It has also enhanced the NFMS, which supports better forest management and policy.

In terms of policy and capacity building, the project has developed new tools and systems for REDD+ and strengthened safeguards and benefit-sharing mechanisms.

It has also trained government staff on social, environmental, and gender issues and updated the Adat Community Plan to align with current policies.

The project the Indonesian Environment Fund to prepare for Green Climate Fund (GCF) accreditation and improve data management through the E-office system. Continued collaboration with development partners has facilitated the exchange of knowledge and best practices.

Looking ahead, the project on track for more significant achievements, with progress achieved so far setting a strong foundation for meeting climate goals from the FOLU sector.

Importance of Result-Based Payments in REDD+ Implementation in Indonesia

The REDD+ RBP initiative is crucial for Indonesia as it enables the country to reduce carbon emissions and meet its NDC targets within the FOLU sector, while simultaneously enhancing the livelihoods of forest-dependent communities.

Through the ongoing GCF REDD+ RBP project, Indonesia has been focusing on two major outputs, which are nearing completion:

1. Strengthening REDD+ Coordination and Overall Architecture

The project continues to enhance the overall REDD+ architecture, including the National REDD+ Strategy, the Forest Emission Reference Levels, National Forest Monitoring Systems, Safeguard Information Systems, and MRV (Measurement, Reporting, and Verification) capacity. Additionally, the capacity of both national and sub-national governments has been strengthened to ensure effective coordination and implementation of REDD+ activities.

2. Supporting Decentralized Sustainable Forest Governance

The initiative has also been advancing decentralized sustainable forest management by operationalizing Forest Management Units (Kesatuan Pengelolaan Hutan, KPH) and enhancing community access to forest resources through social forestry programs. Significant progress has been made towards aligning social forestry with KPH operations, maximizing synergy between the two approaches. Ongoing activities include supporting the operationalization of KPH and granting social forestry licenses, alongside investments in sustainable forest management and livelihoods, both within and beyond KPH areas.

As this intervention progresses towards its final stages, Indonesia is closer to achieving a significant development impact, contributing to climate goals while ensuring sustainable benefits for forest-dependent communities.