SIIA Haze Outlook 2021: Opportunities for Climate Action and Green Recovery

The SIIA Haze Outlook 2021, published last month and co-authored by the Singapore Institute of International Affairs (SIIA) and Segi Enam Advisors, has something a little different than last year’s report—a segment exploring opportunities for climate action and green recovery, with particular focus on nature-based solutions (NBS) and carbon markets.

Theoretically, nature-based projects could lead to carbon emissions reduction and carbon offsets, while providing opportunities for investments. While the sector is still in its early stages of development, interest in carbon credits generated form Indonesia-based NBS projects is growing. The Katingan Mentaya Project managed by PT Rimba Makmur Utama illustrates this interest—a forest restoration and protection initiative located in Central Kalimantan, it generates an average of 7.5 million triple gold certified carbon credits a year, and carbon credits generated from the project have already been purchased by major global multinational firms.

Accordingly, many plantation companies that spoke to SIIA have expressed some interest in generating carbon credits from their own conservation projects, both current and future. Ultimately however, it is still too early to assess how willing project developers are to sell credits internationally compared to domestically.

Our previous posts on the SIIA Haze Outlook 2021: (1) Reviewing 2020; and (2) Issues to Watch in 2021

Read the full report here: SIIA Haze Outlook 2021

SIIA Haze Outlook 2021: Issues to Watch in 2021

Continuing from previous posts on SIIA’s Haze Outlook 2021, of which Segi Enam was the co-authors, there are several relevant issues that bear watching in 2021.

On the meteorological front, Indonesia is expected to enter into its usual June–September dry season following a wet spell that was in large part caused by La Niña. Meteorological departments generally expected this dry season to either remain normal or drier than it was in 2020 but much less so than the droughts in 2015 and 2019. Both the Indian Ocean Dipole and El Niño-Southern Oscillation phenomena are forecasted to stay neutral throughout the third quarter of 2021. Overall, however, meteorologists warn that there are still some uncertainty in these forecasts, since it is difficult to make predictions during the transition seasons from April to May.

Given the favourable weather conditions, policy and human factors become decidedly important in the evaluating the risk of a severe transboundary haze. On one hand, the relevant policies in effect are sending a strong message of commitment to sustainability on the part of the Indonesian government, particularly in the areas of peatland and mangrove conservation, net zero emission goals, and haze prevention in the midst of the pandemic. On the other, there are concerns that the more recent policies, namely the Omnibus Law and food estate programme, would leave adverse environmental consequences.

Source: Segi Enam Advisors based on data from The World Bank (2021) for palm oil and rubber prices, GFW (2021) for tree cover loss and primary forest loss, KLHK (n.d.) and KLHK (2017) for official estimated burned area in 2015, 2019, and 2020.

That being said, there are other factors that bear watching. The Covid-19 pandemic is the most obvious; while it has presently not resulted in a severe haze incident despite the disruptions it has caused to fire management efforts, its impact in 2021 and beyond remains unclear. What the pandemic has caused is a near multi-year high in prices within the agricultural commodity market, which in turn raises the question of whether it would drive Indonesia growers to carry out land clearing and replanting activities.

Read the full report here: SIIA Haze Report 2021

SIIA Haze Outlook 2021: Reviewing 2020

Last week, the annual Haze Outlook 2021 was launched, a report on the recurring haze event in Southeast Asia authored by the Singapore Institute of International Affairs (SIIA) and Segi Enam Advisors. Part of the report reviewed the haze conditions—or lack thereof—in 2020.

While initial fears was that Southeast Asia would be battling both the Covid-19 pandemic and the annual transboundary haze simultaneously, no severe haze incident was recorded for in 2020. This was partly due to weather conditions within the region, i.e. a strong La Niña and a muted India Ocean Dipole phenomena resulted in one of the wettest year for Indonesia in the past decade, thereby dampening fire occurrences.

Consequently, much fewer hotspots were recorded in 2020 compared to 2019. The Indonesian Ministry of Environment and Forestry (KLHK) reported that some 297,000 hectares of land were burned in 2020 compared to the 1.6 million hectares in 2019.

Data: Hotspot imagery from NASA’s Fire Information for Resource Management Systems (FIRMS, https://earthdata.nasa.gov/firms), peatlands from Jiren et al. (2019), and Khor Reports estimates. Source: Segi Enam Advisors (2021).

Nonetheless, the outbreak of the coronavirus has had some effect on the Indonesian fire prevention landscape. For one, the pandemic appeared to have somewhat hindered replanting activities in the agricultural sector, although businesses and experts have indicated that this was more apparent in rural areas compared to urban centres. On the other hand, Covid-19 has adversely impacted Indonesia’s fire fighting and prevention capabilities: initiatives such as outreach programmes with fire-prone villages and corporate fire management efforts were scaled back and government resources had to be redirected to manage the pandemic.

Read the full report here: SIIA Haze Report 2021

SIIA Haze Outlook 2021

It is halfway through 2021, meaning it is time for another risk assessment report on the infamous haze within the Southeast Asia region. Together with the Singapore Institute of International Affairs (SIIA), we concluded that there is a low risk of a severe transboundary haze incident for this year, on account of favourable weather, pandemic-related disruption to land clearance and planting exercises, and proper forest management by various stakeholders, including the Indonesian government.

As usual, Segi Enam Advisors collected and examined qualitative and quantitative data from various sources, including recent academic literature, meteorological departments, and government agencies. We also provided geospatial analysis of key areas in the Riau and Central Kalimantan regions to give a geographical overview on hotspot intensity in relation to other information such has forest and peatland moratorium areas and districts with food estate projects in planning.

Read the full report here: SIIA Haze Outlook 2021

Edit (28.06.2021, 11.40 a.m.): ANTARA News covered the launch of the Haze Outlook 2021 report during SIIA’s virtual webinar on 24 June 2021. The article reported the statements made by guest speaker Herry Purnomo of the Center for International Forestry Research (CIFOR), who commended both the public and private sectors for their roles in reducing fires and deforestation, and SIIA chairman Professor Simon Tay, who opined that the extension of the Peat and Mangrove Restoration Agency’s tenure shows the Indonesian government’s fire prevention commitments.