Heart of Borneo
The Heart of Borneo is a transboundary region of equatorial rainforest spanning some 220,000 square kilometers on the island of Borneoroughly 30 percent of the islands total land area. The region encompasses parts of Brunei; the Indonesian provinces of East, West, Central, and South Kalimantan; and the Malaysian states of Sabah and Sarawak.
Because of the relatively good governance and market readiness of Malaysia versus Indonesia and Brunei, the Malaysian parts of the island hold the greatest opportunities for early forest carbon investments. As governance improves, Indonesia should also become a major contributor to forest conservation.
Topography and Forest Ecology
The Heart of Borneo is covered in dense tropical forests, peat swamps, and montane forests. A central mountain range runs from north to south, extending to the northern coast of the island, but everywhere else the lowland tropical forests extend along the coast and stretch inland.
According to the World Wildlife Fund, the Heart of Borneo affords the only possibility for forest preservation in Southeast Asia on a very large scale, and it is one of only two tropical forests in that part of the world capable of supporting viable populations of large mammals such as orangutans, elephants, and rhinoceroses.
The forests of Borneo are among the most biodiverse places on Earth. The island is home to thousands of species of trees and hundreds of species of birds and mammals, many of which, such as the orangutan, are endemic to the island. Moreover, in the 10-year period between 1994 and 2004, 361 new species were discovered in the Bornean rainforests.
Deforestation Trends
As of 2000, Indonesia was the third-largest emitter of greenhouse gases in the world, and nearly 90 percent of its emissions came from land-use changes such as deforestation or forest degradation. Indeed, Indonesia accounts for more than 33 percent of global greenhouse gas emissions due to land use change and forestry. Malaysia was the ninth-largest emitter in the world, with roughly 85 percent of its emissions (9 percent of the world total) arising from deforestation. In 1985, Borneo was roughly 75 percent forested; today forest cover is less than 50 percent. Between 2000 and 2005, Borneo experienced an average deforestation rate of nearly 4 percent per year.
During the 1980s and 1990s, the forests of Borneo were devastated by extensive logging; roughly 80 percent of the Kalimantan lowland forests were awarded to timber concessions. In the 1980s, Malaysian logging operations outpaced even those of Indonesia. In recent years, production of oil palm, which thrives in the high-heat, high-humidity environment of Borneo, has skyrocketed. Between 1984 and 2004, the amount of land under cultivation for oil palm in Malaysian Borneo increased from 184,744 to 1,673,721 hectares. Expansion of oil palm cultivation in Kalimantan has occurred even faster, from less than 15,000 hectares in 1984 to nearly a million in 2004.
The forests of Borneo are also being destroyed by frequent uncontrolled fires set annually to clear land in agricultural areas and degraded forests. The Bornean forest fires of 1997 and 1998 were among the largest ever, burning nearly 10 million hectares of forested and nonforested land and releasing between 0.8 and 2.5 billion tons of carbon into the air. The transboundary haze caused by these fires also has been a source of political tension in the region.
Although Malaysia scored better than Indonesia in terms of country risk, both countries continue to have significant governance and market regulatory issues that need to be addressed before forest conservation can succeed.