In new climate deal, Norway will pay Indonesia $56 million for drop in deforestation, emissions

Norway has agreed to pay Indonesia $56 million in a climate agreement between the two countries, as Indonesia has succeeded in reducing carbon dioxide emissions by preserving its vast tropical rainforests.

The contribution agreement, signed Oct. 19 by both governments, is a follow-up to both countries’ new climate deal, which was struck on Sept. 22.

In the deal, the Nordic country will pay Indonesia, home to the world’s third-largest tropical forests, to keep its forests standing, thereby reducing its emissions.

In 2016-2017, Indonesia was able to reduce 11.2 million tons of carbon dioxide equivalent by curbing deforestation and forest degradation.

And for that, Norway will pay $56 million.

“During 10 working days after today’s signing of the contribution agreement, Norway will deliver its first results-based contribution of $56 million in support of the ongoing implementation of Indonesia’s FOLU Net Sink 2030 Operational Plan,” Indonesian Environment and Forestry Minister Siti Nurbaya Bakar said during the agreement signing ceremony in Jakarta.

This is the same amount of money that Norway agreed to pay back in 2020 under a previous Norway-Indonesia climate deal, which was similar to the current deal and was signed in 2010.

The money was initially expected to be paid in June 2020.

However, Norway had failed to pay the agreed-upon money, as Indonesia said the Nordic country changed the goalposts and made fresh demands.

The Indonesian Ministry of Environment said Norway, after agreeing to pay the $56 million, set additional requirements that had not been established in the agreement, such as requesting Indonesia to show documentation on how the money would be spent.

The ministry said the Norwegian government also sent a due diligence team to assess the Indonesian Environment Fund, or BPDLH, a government agency tasked to manage the environment and climate funds from domestic and international sources.

All of this resulted in Indonesia’s unilaterally terminating its previous climate deal with Norway.

On Aug. 5, Norway sent a letter to Indonesia, stating its intention to establish a new climate deal.

This culminated in the signing of the new climate deal in September, which both countries said is built upon lessons learned from the previous agreement.

While the previous deal focused on reducing emissions from deforestation and forest degradation, a mechanism known as REDD+, the new deal encompasses a broader engagement on climate and forest issues in Indonesia.

Under the new agreement, Norway will help Indonesia to achieve its FOLU Net Sink 2030 goal.

The goal is an ambitious bid to transform Indonesia’s forests into a major carbon sink by 2030, absorbing 140 million metric tons more CO2 than they emit into the atmosphere.

“This new partnership is an equal partnership based on our mutual ambition and respect, and we hope that together we can also give a beacon of hope to the rest of the world and a good example of international cooperation leading to the climate summit COP27 that will take place in Egypt [in November],” Rut Krüger Giverin, Ambassador of Norway to Indonesia, said during a press conference after the signing of the contribution agreement.

To support Indonesia’s bid, Norway will provide further payments for a portion of verified emissions reductions for the coming years, she said.

Agencies