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Modeling Results: natural capital

Below are specific findings related to how different development trends impact natural capital, thereby reducing socio-economic benefits derived from natural capital.

The Heart of Borneo provides water to 70% of the population of Kalimantan. 

Modeling results have indicated that the Heart of Borneo contributes as much as 60%, 40% and 55% of annual water supply to the Kapuas, Kapuas-Barito, and Mahakam River basins, respectively. 

Water quality is impacted by large scale palm oil development.

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Maps of nitrogen exports, where red is high and yellow is low, for three watershed that originate in HoB. Left map shows the nutrient pollution in 2009 affecting drinking water utilities. Right map shows the likely distribution of nutrient pollution and affected drinking water utilities under BAU in 2020

InVEST analysis showed that palm oil plantations affect water quality through increased nitrogen export due to extensive fertilizer use affecting local water utilities. Under business as usual, additional application of fertilizer and loss of filtering riparian forests along waterways could increase nutrien t export tenfold compared to 2009 in the three basins assessed. Similar results might be expected for other pollutants, such as pesticides.

A complete shift to Reduced Impact Logging (RIL) practices secures carbon, reduces erosion and river sedimentation.

Approximately 115 million additional tonnes of carbon (tC) could be stored by implementing RIL in 158 timber concessions. With improved timber management practices, about 19 more tonnes of carbon (tC) per hectare could be stored as compared to existing concession management practices.

Based on the social cost (i.e. the damage to global society) of these emissions, the social value of storing that carbon would be close to US$4 billion. In the Mahakam basin, the InVEST analysis showed that improved timber management could increase sediment retention by 2020 by close to 900,000 tonnes across all 49 timber concessions in the basin, with a mean avoided erosion of around 37 tonnes of soil per hectare annually.

GE scenario results in higher carbon stocks compared with BAU—curbing the projected reduction in carbon stocks. 

Based on the projected forest cover loss of 3.2 million ha, the difference in carbon stocks between the BAU and GE scenarios is 1.2 billion tonnes of CO2e, of which 23% is contributed by land use change in the HoB.

Assuming a carbon price in the range of US$2/ton and US$15/ton, the total value of the projected reduction in carbon stock under the GE scenario would be between US$2.4 billion and US$18 billion.

GE scenario results in enhanced soil services.

Green economy interventions also increase the soil’s ability to perform its function in natural and sustainably managed ecosystems. These services, among others, include carbon stored in organic matter, soil water holding capacity, nutrient flow and soil erosion con trol. 

GE scenario results in more effective ecological infrastructure.

When river systems are no longer maintained because bulk transport uses other infrastructure, local people suffer due to impacts on their mobility. For them, the river system is the cheapest, and in some cases only, means of transportation.

The BAU scenario presents a worsening trend of siltation and sedimentation, which will require additional infrastructure investments (for transport and energy in the specific cases analyzed), both for additional maintenance and for construction to make up for the ecological infrastructure lost (e.g. reduced river use).

However, sustaining Heart of Borneo’s ecosystems through green economy interventions will have positive impacts on watersheds. Sediment retention capacity will be increased due to reduced run-off and landslides and avoided siltation.

GE scenario secures future revenue from improved natural capital and land management.

A green economy approach would allow HoB governments to capitalize on a valuable opportunity once green markets and mechanisms being developed under the United Nations Framework Convention on Climate Change (UNFCCC) and other international initiatives are established.

The assessment indicates that the HoB landscape generates a multitude of ecosystem services with local, downstream and global benefits which will be largely maintained under the GE scenario. A green economy results in the protection of ecosystem services benefiting Borneo’s economy and society, as well as global stakeholders.

The type of policy package put in place to achieve a green economy will be critical in determining the kinds of investments that will be made and the realization of costs and ben efits, i.e., who will pay and who will benefit.

These results provide a basis for policy discussions regarding investments, policies and incentives to be put in place by national and local governments.

To build upon this work, more extensive efforts— especially in systematic data collection, verifying relationshi ps between ecosystem services and benefits at the local level, with strong stakeholder engagement at local levels—will be needed. Subsequent findings could be actively used to support economic policy decision making on HoB’s na tural capital to create socio-economic as well as environmental benefits and synergies across borders.