Decentralization and Avoiding Deforestation: The Case of Indonesia

Fitrian Ardiansyah*, Frank Jotzo

*Corresponding author for this work

    Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

    3 Citations (Scopus)


    Indonesia has undergone far-reaching political, administrative and fiscal decentralization over the last decade. Significant powers now rest with the district level including the management of natural resources and the environment. A large share of state revenue goes to district governments. Deforestation has been a part and parcel of Indonesia's economic development and it is the principal source of Indonesia's large greenhouse gas emissions. Indonesia has committed to curb its greenhouse gas emissions, mostly through reduced deforestation. We assess challenges and options for avoiding deforestation under the decentralized system, using Indonesia's fiscal transfer system. We find that schemes for improving land management and deforestation need to be structured around the interests of local governments and actors. Positive incentives for local governments will need to be created to compensate them for foregone profits and to facilitate alternative development. This could be done through intergovernmental transfers, using either outcome-based or input-based payment schemes.

    Original languageEnglish
    Title of host publicationFederal Reform Strategies
    Subtitle of host publicationLessons from Asia and Australia
    PublisherOxford University Press
    ISBN (Electronic)9780199082513
    ISBN (Print)0198092008, 9780198092001
    Publication statusPublished - 8 Aug 2013


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