Forest concessions and deforestation

Abstract

Deforestation is the most critical issue of climate change in Indonesia, as well as in other tropical countries. Reducing deforestation when major forests are managed under concession or permit system is increasingly challenging. The main focus of this chapter is to quantitatively investigate the association between forest permits and deforestation at national level in Indonesia. Hence, this chapter discusses the state of forest management and the forest permit system in Indonesia. Theoretical and empirical literature on the relationship have been extensively reviewed and summarized in the context of Indonesia. Furthermore, the empirical analysis with provincial data for the relation between two major forest permits, the logging permit and the plantation conversion permit, and forest cover loss are implemented. The results are different from the expectation posing a question on the effectiveness of the current forest moratorium policy as well as the forest tariff policy to the attempts in mitigating deforestation. Based on the empirical findings, some possible alternative forest policies in short- and long-term perspectives are discussed.