Spatial modelling and ecosystem accounting for land use planning: addressing deforestation and oil palm expansion in Central Kalimantan, Indonesia

Ecosystem accounting is a new area of environmental economic accounting that aims to measure ecosystem services in a way that is in line with national accounts. The key characteristics of ecosystem accounting include the extension of the valuation boundary of the System of National Accounts, allowing the inclusion of a broader set of ecosystem services types such regulating services and cultural services. Consistent with the principles of national account, ecosystem accounting focuses on assessment of the contribution of ecosystem in generating benefits for human well-being. Those valuation characteristics allow ecosystem accounting to explicitly visualize the comprehensive values of ecosystem contribution, and integrate them in a standardized national account. There is a wide range of potential application of ecosystem accounting in natural resource management and environmental preservation. This includes the provision of basic data on the values of multiple ecosystem services (both in terms of physical quantities and monetary values), monitoring ecosystem services dynamics, analyzing impacts of land-use change and land management on the trade-offs of ecosystem services, and development of ecosystem services based land-use planning. Ecosystem accounting approach has also been widely involved in addressing critical environmental issues such as deforestation, GHG emissions, and biodiversity conservation. Considering the spatial heterogeneity of ecosystem services distribution, spatial analysis is a key element in ecosystem accounting. The availability of spatial information of the values of ecosystem services creates opportunity for a broad range of applications required for land-use planning and management, such as identification of areas with high variability of ecosystem services (often called as ecosystem services hotspots) and areas with high aggregate values of ecosystem services, identification of ecosystem services supply and ecosystem services demand interaction, and analysing the impacts of land-use change on the trade-offs of ecosystem services. Most importantly, spatial information of a comprehensive set of ecosystem services values allows land-use planners to analyse the relationship between any options of land management and the existence of a combination of ecosystem services, hence the best management type which optimize the provision of ecosystem services can be formulated. The objective of this thesis is to develop an ecosystem services approach to land-use planning through integration of ecosystem accounting and spatial modelling, with a specific case study on deforestation and oil palm expansion in Central Kalimantan Indonesia. The main motivations of this study includes the high rate of deforestation and oil palm expansion in Central Kalimantan, the environmental degradation related to the deforestation such as greenhouse gas emissions and biodiversity loss, the uncertainty of provincial land-use planning, and the lack of experiences on the integration of ecosystem accounting in land-use planning. In chapter 2 of this thesis, seven key ecosystem services (timber production, rattan production, oil palm production, paddy rice production, carbon storage, carbon sequestration, and wildlife habitat) are assessed and mapped at a provincial scale. The ecosystem services are assessed in term of physical quantities. Three mapping techniques are applied: spatial interpolation, lookup tables, and Maximum Entropy (Maxent) modelling. An ecosystem services based land-use planning is tested using the seven ecosystem services maps to identify areas for oil palm expansion. This study shows that selection of the best spatial modelling technique for ecosystem services mapping highly depends on the availability of input data and the characteristics of spatial distribution of ecosystem services. This study also demonstrates the significant support of spatial information of ecosystem services in provincial land-use planning. In chapter 3, six ecosystem services mapped in chapter 2 (timber production, rattan production, oil palm production, paddy rice production, carbon sequestration, and wildlife habitat) are valued in monetary terms. The valuation also includes additional cultural service, i.e. nature recreation. Two valuation methods consistent with the principles of ecosystem accounts are applied: resource rent valuation and costs based approach. The monetary values of ecosystem services are then mapped, allowing analysis on the aggregate values of the seven ecosystem services in different land-use types. This study shows the capability of resource rent valuation in filtering and visualizing the value of ecosystem contribution in providing benefits that have market values, and the applicability of a costs based approach for carbon sequestration valuation. However, application of the cost based approach is considered inappropriate in monetary valuation of biodiversity habitat, and further improvement is required. This study also shows how the trade-offs of ecosystem services from the past and the potential land-use change can be analyzed based on the spatial information of monetary values of ecosystem services. Chapter 4 of this thesis presents land-use change modelling, with a specific case of modelling oil palm expansion in Central Kalimantan. An integrated deductive inductive modelling is developed, using logistic regression and scenario based modelling. The scenarios used in the modelling consist of two scenarios reflecting the past and the current policies on oil palm expansion, i.e. a business as usual scenario and a moratorium scenario, and one alternative scenario, i.e. the sustainable production scenario, developed based on stakeholder workshop and ecosystem services approach studied in chapter 2. Based on the monetary values of ecosystem services valued and mapped in chapter 3, the societal costs and benefits of oil palm expansion based on the three policy scenarios are then analyzed. The model forecasts the continuation of strong oil palm expansion in the period 2015 – 2020, in particular in case of the business as usual scenario, and forecasts that oil palm expansion would level off in the period 2020 – 2025 in all three scenarios. In the business as usual scenario, this expansion would lead to substantial net costs to society resulting from a loss of ecosystem services, particularly from carbon emission emissions. The sustainable production scenario provides the highest net benefits to society, however, implementation of this scenario requires fundamental change of current land-use policy. Chapter 5 presents hydrological and economic impacts of oil palm development on peat, with a case study in the ex mega rice project area, Central Kalimantan. Hydrological aspect of oil palm development have not been studied in the previous chapters, and this chapter addresses this aspect through modelling three types of flooding on drained peatland for oil palm: impaired drainability, frequent flooding, and near permanent inundation. The model integrates current knowledge on subsidence rates and drinage limits, and uses a high resolution LiDAR DEM. The results of the model are presented up to 2136. The economic impacts are analysed through two land-use scenarios: the oil palm scenario assuming all peatlands in the study area will be converted into oil palm, and the mix scenario combining natural forest preservation, jelutung forest development and oil palm plantation. This study shows that in 100 years’ time only around 10% of the area would still be suitable for oil palm. This study also shows that under the first scenario, the social costs of carbon emissions considerably outweigh the benefits of oil palm production. In term of private benefits, the mixed land-use option scores better even at the first plantation cycle. The mix land-use scenario also potentially preserve about 84,000 ha habitat for orangutan. This study provides useful inputs for a comprehensive analysis on the sustainability of oil palm development on peatland. In general this thesis demonstrates the significant contribution of ecosystem accounting and spatial modelling for land-use planning. Valuation methods and spatial modelling techniques developed in this study provide basis for completing ecosystem accounting in Central Kalimantan, with potential applicability in other regions. By addressing the critical environmental issues in Central Kalimantan, i.e. deforestation and oil palm expansion and their environmental and economic impacts, this study contributes to formulate a better land-use management, which facilitates the need for oil palm development while maintaining the provision of important ecosystem services.