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Financing and incentive options for sustainable management of peatland forests in Southeast Asia

This report, Financing and incentive options for sustainable management of peatland forests in Southeast Asia, has been prepared under the framework of the Global Environment Facility (GEF)/International Fund for Agricultural Development (IFAD) – ASEAN Peatland Forests Project (APFP) and the European Union – Sustainable Management of Peatland Forests in Southeast Asia (SEApeat) Project.

Peatland ecosystems cover about 25 million hectares in Southeast Asia and are the most extensive wetland ecosystems in the region. Peatlands play a key role for carbon storage, biodiversity conservation and the management and provision of water resources. The value of peatlands to local livelihood and national economy is very high. Nevertheless, peatlands in the region are facing serious degradation with more than 4 million hectares having been burned in the past 15 years, being the main source of transboundary smoke haze. The economic, environmental and social impacts of the smoke haze are immense – with the 97-98 fires and haze alone estimated to have cost more than US$10 billion in damages.

The ASEAN Member States have adopted the ASEAN Peatland Management Strategy 2006-2020 (APMS) as the regional framework to support the integrated management of peatlands and prevent peatland degradation and associated transboundary haze. One of the important actions agreed under the APMS is to explore the use of polluter-pay and user-pay schemes, tax incentives or other options to generate sustaining resources to support the implementation of the Strategy.

This study is an initial contribution towards meeting this action. It was prepared through a participative process starting with a Working Group Discussion on Incentive Options for Peatland Management, followed by visits to peatland sites and agencies in Indonesia, Malaysia, the Philippines and Viet Nam. In this respect, the Report is well founded on site-level and community-based financing needs, apart from the available global financing mechanisms.

This report intends to stimulate consideration, particularly by policy makers, for the development of innovative incentive and financing options to support sustainable peatland management in Southeast Asia. It is critical that financial options and incentives measures are established in each ASEAN Member State to help ensure the sustainable management of this key resource and ecosystem.

Image credit: Rainforest Action Network