Using Forest Restoration to Address Land Degradation Issues: The example of the Brantas River Basin in Indonesia
Land degradation due to deforestation for agriculture creates myriad problems. For example, the loss of tree cover worsens flooding and erosion, both of which reduce agricultural productivity. Furthermore, without trees to retain water, surface water availability becomes unpredictable and groundwater recharge is limited. These issues affect both the local population and downstream areas.
In the upper Brantas River Basin in East Java, Indonesia, deforestation of thousands of hectares of forest for agricultural use has degraded the land. Though agriculture generates income for the local population, this deforestation has triggered an onslaught of long-term environmental concerns, such as soil erosion, loss of biodiversity and decreased water retention. Downstream, water scarcity has become common. The area is also home to industrial activity that depends on the water originating upstream.
In turn, Indonesia has suffered from severe flooding, displacing roughly 420,000 people, and significant threats to approximately 50% of biodiversity. Climate change is also predicted to have negative impacts on Indonesian agriculture.
PT Multi Bintang, a subsidiary of the Heineken beverage company operating in the lower catchment of the Brantas River realized that the region was suffering from critical water stress due to land degradation issues. In 2016, the company joned with the United Nations Industrial Development Organization and the Indonesian Ministry of Environment and Forestry to combat the impacts of land degradation and identify priority measures to reduce water stress. They found that reforestation efforts helped sequester carbon and that bamboo-based agroforestry improved water quality, both of which increased farmers’ incomes.
Land Restoration to Retain Water and Carbon
A Sustainable Asset Valuation (SAVi) assessment shows that the nature-based infrastructure solution of land restoration is more cost effective than building a reservoir for water storage and also provides large societal benefits. Specifically, over 20 years, these interventions generate net benefits of between USD 104.34 million and USD 131.59 million in avoided flood and erosion damages along with improved water quality, carbon storage, job creation, agroforestry, and bamboo production.
Source: Author’s diagram based on data from the Ministry of Environment and Forestry Indonesia (Kementerian Lingkungan Hidup dan Kehutanan). Background map data from OpenStreetMap (© OpenStreetMap contributors).
Most notably, the analysis shows that land restoration can store large amounts of carbon (an additional 2.64 million tons), equivalent to avoiding 9.69 million tons of CO2 emissions. This results in a carbon storage benefit of USD 32 million over 20 years. This means that if a system of carbon payments is set up in Indonesia, land restoration is a worthwhile avenue to explore to finance nature-based infrastructure projects.
Source: Author’s diagram based on InVEST model output. Background map data from OpenStreetMap (© OpenStreetMap contributors).
Land restoration also increases water retention. This may lead to more groundwater, which is an important resource for industrial activity lower in the watershed. The SAVi assessment estimates that improved land management on a large scale could increase groundwater recharge by up to 6.1% a year. Furthermore, water retention reduces flood damage to households, agricultural land, and businesses alike. Implementing this type of land restoration on a large scale in Indonesia could have a significant impact on flooding and water scarcity. For such investments to take place, it is important to identify and quantify their benefits fully and compare them with the investment costs of grey or built infrastructure.
A reservoir with the same water retention capacity as the restored land would be more expensive than reforestation. For example, while land restoration would cost USD 9.5 million, the SAVi assessment estimates that a comparable reservoir would cost between USD 18.6 million and USD 30.7 million. Indeed, on average, building with nature is 50% cheaper than built infrastructure and provides 28% better value for money.
This project is an example of how nature can cost effectively provide infrastructure services and support climate adaptation. The integrated valuation can support efforts to scale up restoration in the Brantas River Basin of Indonesia.
In demonstrating the economic and societal value of reforestation and water management efforts, the assessment helps entice industries to invest in nature-based infrastructure for water management. Highlighting the diverse beneficiaries of this project shows the importance of coordinating across sectors and geographies to realize the many co-benefits of sustainable land and water management.
For more information on the valuation methodology used, see the technical report on land restoration in Indonesia and this explanatory page about the methodology.
This story was written by Nicolas Sol Centeno, Intern in the Economic Law and Policy programme of the IISD.