Modelling socio-economic effects of implementing reduced-impact logging : a case study of Berau District East Kalimantan Province Indonesia.
Degree GrantorUniversity of Canterbury
Degree NameDoctor of Philosophy
Reduced-impact logging (RIL) was identified as a measure, complementary to other identified measures, which can contribute to Indonesia reducing emissions from forestry and forest degradation (REDD+). In this light, the research was aimed to investigate the economy-wide impact of implementing RIL on the economy, which was studied at the district level. For this purpose, an expert opinion survey method was integrated with Berau computable general equilibrium (CGE) model. The expert opinion survey was utilised to: (i) generate information and confirm the impact of implementing RIL on logging costs, and (ii) obtain an estimate of the incentive required by logging companies to maintain the practice of RIL. Results of this approach provided input to the Berau CGE model. In addition, multiple ways of data gathering were employed to develop the dataset required for the general equilibrium analysis. Simulation results suggest that the economic impact of implementing RIL policy is negative but small on the Berau economy compared to a situation where the RIL is not implemented. Worker households (particularly agricultural worker households) are worse off and non-agricultural households are better off. Furthermore, providing compensation, which was simulated as a logging output- based subsidy, can improve the Berau economy, although to only a lesser degree. The RIL policy causes a significant negative impact on logging output which further leads to output reduction in forest-based and pulp & paper industries. The policy implementation, however, simulates production increase in other agricultural activities, notably in oil palm plantation. Furthermore, results simulations with the logging output-based subsidy suggest the magnitude of economic impacts is reduced from what would otherwise occur in the scenario of implementing RIL only (no subsidy is provided). The RIL policy also seems to result in ̳unexpected‘ emissions leakage indicated by increases in output of some agricultural-based activities such as oil palm plantation, other estate crops, and food crops. Increase in emissions is also expected to occur outside the Berau District stimulated by the increase in the District‘s import of timber.