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Indonesia; Norway: Deforestation Agreement

(June 7, 2010) Indonesia and Norway have established a partnership through which Norway will grant the equivalent of US$1 billion in aid to Indonesia for forest preservation and climate control. Indonesia had said in 2009 that it plans to reduce greenhouse gas emissions at least 26% by the year 2020; that reduction could be as much as 40% with international help. Indonesia's Environment Minister Gusti Muhammad Hatta stated in advance of the conclusion of the pact, “[i]f we get the funding from Norway, we will channel it for activities on peatland areas, considering that these areas have a bigger impact [in the release of more carbon dioxide].” (Camelia Pasandaran & Fidelis E Satriastanti, Indonesia, Norway to Sign $1b Forestry Deal, JAKARTA GLOBE, May 24, 2010, available at

The agreement between the countries was announced during the Oslo Climate and Forest Conference, held in Norway on May 26-27, 2010. Co-chaired by Indonesia's President Susilo Bambang Yudhoyono, the conference was devoted to creating a nonbinding framework for the carbon trading mechanism Reducing Emissions from Deforestation and Forest Degradation, which is backed by the United Nations. Since trees absorb carbon dioxide, deforestation results in over 83% of Indonesia's greenhouse gas emissions, according to the World Wildlife Fund. (Achmad Sukarsono, Norway Pledges $1 Billion for Indonesia Climate, Council Says, BLOOMBERG.COM, May 17, 2010, available at

Norway's Prime Minister Jens Stoltenberg spoke about the two countries' plans, stating:

Indonesia is a key country in terms of reducing deforestation, therefore this agreement and Indonesia's commitment is a great step forward in achieving large scale reductions in greenhouse gas emissions. I look forward to cooperating with President Yudhoyono and Indonesia on this important issue. (Deforestation Agreement with Indonesia, NORWAY POST, May 26, 2010, available at

The aid will be given over the next few years and will be funding efforts to build and institutionalize the capacity to monitor, report, and verify reduced emissions, as well as establishing reformed policies. New concessions to permit converting forests and peat lands for agricultural use will be suspended for two years. (Id.)