An Estimate of the Financial Cost of Peatland Restoration in Indonesia

The peat forests of Indonesia have experienced extensive deforestation and degradation over recent decades. High demand for Indonesian timber and plantation development has driven large-scale draining and clearing of peat forest, resulting in extensive fires and smoke haze problems across the region. These fires caused more than 100,000 premature deaths in 2015 alone, increased the pressure on several already threatened species, and placed Indonesia among the top greenhouse gas emitting countries globally. In response, the Indonesian government has launched an initiative to restore more than 2 million ha of peatland between now and 2020. Although there is a substantial body of academic literature that deals with technical aspects of tropical peatland restoration, little is published on the costs of tropical peatland restoration activities. In this study, we examine the case of peatland restoration in the provinces of Kalimantan, Sumatra, and Papua in Indonesia, and propose a restoration activity classification scheme based on fire, drainage, and logging history of peatland areas. We use this scheme to identify the restoration activity needs of different areas and then develop a preliminary gross financial cost estimate for the restoration activities proposed under the national 2-million-ha peatland restoration initiative. We find that it is likely to cost more than US$4.6 billion to complete the national 2-million-ha restoration initiative, which is substantially more than the funds currently allocated to the challenge across Indonesian and international donor budgets.