Restoring mangrove forests in Indonesia’s Tanjung Panjang area through the use of market-based incentives: Lessons learned from international case studies.

Abstract

Indonesia’s Tanjung Panjang area has experienced an unprecedented loss of mangrove habitat over the past few decades, due largely to illegal aquaculture practices know as tambak farming. This is of particular concern as the communities surrounding this area depend on the many ecosystem services provided by mangroves. Despite strong efforts by Indonesia’s Ministry of Forestry to stop tambak farming and return Tanjung Panjang’s mangrove habitat to its pristine state, mangrove deforestation due to tambak farming continues to be a major problem. Many studies have investigated the role of market-based incentive (MBI) programs in achieving both environmental and social benefits; however, few focused on the conservation of coastal environments. As such, a market-based solution known as the Rehabilitating Blue Carbon Habitats (RBCH) program has been proposed for the Tanjung Panjang site. The present study evaluates the suitability of an MBI program in Tanjung Panjang and aims to strengthen the ongoing development of the RBCH program by addressing several key unknowns. Through a critical review of 28 international MBI programs, this study finds that a modified payment for ecosystem services agreement, coupled with funding from government, private companies/intermediaries, and donor agencies, and a community-based payment distribution model, is the most suitable approach to market-based environmental management in Tanjung Panjang. Above all, the present study demonstrates that the success of any MBI program is highly context specific and often requires a combination of one or more finance mechanisms, investor groups, and payment distribution models. The results from the present case study analysis provide valuable insight for coastal managers, government, NGOs, and all those involved in the development of the RBCH program, and may also serve as guidance for the development of MBI programs elsewhere.