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Last Updated: Wednesday, 12 December 2007, 16:52 GMT
Pricing the Indonesian forests
By Lucy Williamson
BBC News, Kalimantan

Borneo jungle (Picture credit: Gabriel Eickhoff)
The carbon offsetting scheme aims to protect Borneo's forests
Trees in Setulang village are viewed the old-fashioned way - as building material for boats.

Tucked into the Borneo rainforest, there is not much debate about climate change here. No one reads about carbon stocks in the morning paper - there isn't one.

But a few months ago, something happened on Setulang's doorstep that brought this village face to face with the cutting edge of carbon trading.

A London-based company called Global Eco Rescue has begun setting up a project to offer companies carbon credits in return for protecting the forest.

Until now, carbon trading schemes have focused on replanting trees, rather than protecting those that already exist.

But it is an idea that makes a lot of sense to Setulang village head, Elisar Ipui.

"At first we had no idea what carbon was," he explained, "but we were told that there's carbon in the forest, and it can be sold, and the compensation given to the village. And that's how we're thinking right now."

Illegal logging

Elisar Ipui, village head (Picture credit: Gabriel Eickhoff)
Villages are keen to make money from the forest while preserving it

Like many of the communities here, Setulang could use some extra money.

Usually, the quickest way to get it is from plantation and logging companies.

Making money from keeping the forest intact is a new idea, but Elisar says he has seen other villages hand over their forest to outside investors, and he likes the idea of a scheme that leaves the forest intact.

Whether this works will depend on how much companies in the developed world are willing to pay for the carbon it holds - and also how much they are willing to invest in a remote, largely unpoliced patch of rainforest.

The river up to Setulang is scattered with logs - overspill from a bloated timber industry, much of which is illegal.

And with global demand for timber largely out-stripping supply, that is a powerful lobby to take on.

So how do you protect your carbon investment from people who want to cut it down?

We are able to implement a project on the ground using local people, and also watch it from the sky using satellites
Gabriel Eickhoff, Global Eco Rescue
Gabriel Eickhoff has been working on this problem for Global Eco Rescue.

The organisation's project covers 325,000 hectares - much of it surrounded by logging concessions.

"For the first time," he said, "there's a very solid partnership between the regional government, the local government and an organisation, whereby we are able to implement a project on the ground using local people, and also watch it from the sky using satellites."

Spreading awareness

Logs (Picture credit: Gabriel Eickhoff)
Selling timber is the fastest way to make money from the forest

There is little doubt the government here is on board, but getting the support of everyone on the ground is still a long way off.

A five-hour journey down river, in the provincial capital, the local forestry head, Gerard Silooy, is out planting trees.

It is part of a government drive to raise awareness of deforestation and climate change.

But spreading awareness of the new carbon project has not really taken off yet, and he admits that many of those living inside the area do not even know it is happening.

Setulang is taking a chance on this project - much like the companies who will invest in it.

There is little data as yet, and little idea of how the market will take to it.

But it could mean large amounts of money flowing to the government, and in a remote region like this, that is going to need careful accounting.

To make this scheme work, the rewards will need to be felt here, in Setulang, as well as Jakarta, London or New York.

Pictures by Gabriel Eickhoff

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