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Reducing Indonesia’s deforestation‐based greenhouse gas emissions

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  • Peter Warr
  • Arief Anshory Yusuf

Abstract

Indonesia has set the target that by the year 2020 its emissions of greenhouse gases will be reduced by 26 per cent relative to business-as-usual conditions. This article analyses the effectiveness of a subsidy to the use of land in forestry as a means of achieving this goal. The analysis uses a general equilibrium model of the Indonesian economy characterised by explicit treatment of land use, disaggregated by industry and by region. The results of the analysis indicate that the subsidy cost of permanently reducing carbon emissions by 26 per cent is a little over US$1 per metric tonne of carbon emissions abated. This cost needs to be compared with that of alternative instruments and with the price of carbon that might be agreed under the proposed Reducing Emissions through Deforestation and Land Degradation (REDD) scheme, to be administered through the World Bank and the United Nations.
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Suggested Citation

  • Peter Warr & Arief Anshory Yusuf, 2011. "Reducing Indonesia’s deforestation‐based greenhouse gas emissions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 297-321, July.
    • Handle: RePEc:bla:ajarec:v:55:y:2011:i:3:p:297-321
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    Cited by:

    1. Disdier, Anne-Célia & Marette, Stéphan & Millet, Guy, 2013. "Are consumers concerned about palm oil? Evidence from a lab experiment," Food Policy, Elsevier, vol. 43(C), pages 180-189.
    2. Lykke Andersen & Jonah Busch & Elizabeth Curran & Juan Carlos Ledezma & Joaquín Mayorga & Mélissa Bellier, 2012. "Environmental and socio-economic consequences of forest carbon payments in Bolivia: Results of the OSIRIS-Bolivia model," Development Research Working Paper Series 02/2012, Institute for Advanced Development Studies.
    3. Cacho, Oscar J. & Milne, Sarah & Gonzalez, Ricardo & Tacconi, Luca, 2014. "Benefits and costs of deforestation by smallholders: Implications for forest conservation and climate policy," Ecological Economics, Elsevier, vol. 107(C), pages 321-332.
    4. Lilia Endriana & Djoni Hartono & Tony Irawan, 2016. "Green economy priority sectors in Indonesia: a SAM approach," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(1), pages 115-135, January.
    5. Arief Anshory Yusuf, 2018. "The direct and indirect effect of cash transfers: the case of Indonesia," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(5), pages 793-807, May.
    6. Lykke Andersen & Jonah Busch & Elizabeth Curran & Juan Carlos Ledezma & Joaquín Mayorga & Pablo Ruiz, 2014. "Impactos socioeconómicos y ambientales de compensaciones por la reducción de emisiones de deforestación en Bolivia: resultados del modelo OSIRIS-Bolivia," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB), issue 22, pages 7-48.
    7. Arief Anshory Yusuf & Peter Warr, 2018. "Anti-globalisation, poverty and inequality in Indonesia," Departmental Working Papers 2018-03, The Australian National University, Arndt-Corden Department of Economics.
    8. Olivia, Susan & Boe-Gibson, Geua & Stitchbury, Glen & Brabyn, Lars & Gibson, John, 2018. "Urban land expansion in Indonesia 1992-2012: evidence from satellite-detected luminosity," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(3), July.
    9. Arief Anshory Yusuf, 2014. "Poverty, food prices and supply shocks of agricultural products in Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 201408, Department of Economics, Padjadjaran University, revised Jun 2014.
    10. Peter Warr & Arief Anshory Yusuf, 2014. "World food prices and poverty in Indonesia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(1), pages 1-21, January.
    11. Patrick Doupe, 2014. "Reduced Deforestation and Economic Growth," CCEP Working Papers 1402, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    12. Yang, Hongqiang & Li, Xi, 2018. "Potential variation in opportunity cost estimates for REDD+ and its causes," Forest Policy and Economics, Elsevier, vol. 95(C), pages 138-146.
    13. Djoni Hartono & Witri Indriyani & Beta Septi Iryani & Ahmad Komarulzaman & Anda Nugroho & Robi Kurniawan, 2023. "Carbon tax, energy policy, and sustainable development in Indonesia," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(4), pages 2332-2346, August.
    14. Peter Warr & Arief Anshory Yusuf, 2011. "Reducing Indonesia’s deforestation‐based greenhouse gas emissions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 297-321, July.
    15. Arief Anshory Yusuf & Ahmad Komarulzaman & Muhamad Purnagunawan & Budy P. Resosudarmo, 2013. "Growth, Poverty and Labor Market Rigidity in Indonesia: A General Equilibrium Investigation," Working Papers in Economics and Development Studies (WoPEDS) 201304, Department of Economics, Padjadjaran University, revised Jan 2013.
    16. Arief Anshory Yusuf, 2014. "International Commodity Prices and Inequality in Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 201409, Department of Economics, Padjadjaran University, revised Jun 2014.
    17. Rafiq, Shuddhasattwa & Salim, Ruhul & Apergis, Nicholas, 2016. "Agriculture, trade openness and emissions: an empirical analysis and policy options," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 60(2), April.

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