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The Indonesian Sustainable Palm Oil (ISPO) is a mandatory certification for palm oil plantations based on compliance with Indonesia’s regulations. Its implementation has been slow, particularly for independent smallholders that face problems of complicated requirements, limited capacity, and limited funding. Meanwhile, limited incentives are in place, either in the form of premium prices, ease of regulation, or funding. This article aims to elaborate on the role of incentives and their options in supporting the acceleration of ISPO implementation to ensure and improve the market access of smallholders. It identifies ways to develop incentives to facilitate the acceleration of ISPO certification and alternative financing sources available to support this. The method of this research is based on qualitative methodology using a literature review, policy document analysis, and in-depth interviews with informants from the government and smallholders. The analysis of this article shows that incentives are needed in the form of funding, regulatory measures, technical assistance, promotion, and rewards for good practices to provide better facilitation and financial support for the regulatory compliance in the legal, managerial and financial aspects of the ISPO. These incentives target government and smallholders. Implications for enabling these incentives include the improvement of government coordination, improved understanding of challenges faced by smallholders, and adoption of innovative approaches to manage financial resources, which are crucial to facilitate smallholders’ capacity and organizational improvement.

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Carbon offsetting"in forestry-related projects is widely regarded as the ideal solution to the three challenges st of the 21 Century: climate change, biodiversity conservation and socio-economic development. At the same time, there is scepticism about the Reducing Emissions from Deforestation and Forest Degradation (REDD) proposal particularly because of the weak governance and institutional capacities in many developing countries, which could jeopardize the delivery of benefits at the local level. One major problem is that most people have little knowledge on the causes and consequences of the climate change. This is partly because the information is largely scattered among scientific journals, and obscured by jargon and sophisticated mathematical models. Consequently, REDD+ is beyond thereach of manyof the people affected by REDD+. This paper examines the efforts and the capacity of the local governments and other development agents in explaining the REDD + issues and its impacts on the local people, especially customary communities. The research shows that lack of policy communication and promotion, as well as consultations with the affected groups are the main contributing factors to latent and manifest conflicts. In turn, this conflict has proven that NGOs, district governments and scientists have not been successful intermediaries. Thus, in the future policy communication on REDD+ should be aimed at improved network formation (i.e. between farmer groups with business partners and NGOs and other related actors), learning, negotiation and relationship building (i.e. between members of farmer groups,not only with their leaders within the farmer groups but also with governmental and business sectors). Policy communication should also create a new configuration of support and services in form of advocacy, empowerment and management and technical skills for conserving their natural resources, for adaptation to climate change and building more equitable governance and transparency at local level. 1 This paper is part of the PhD research field work with the title of "Exploring the policy dimensions of community-based forestry in Indonesia" economic baselines, institutional setting for equitable governance and partnerships at multilayers) are preconditions for Indonesia to accept payments under the scheme, but also set the stage for the development of methodologies and political commitment to test the activities that ultimately lead to a REDD+ carbon market based on a global scale (IFCA, 2007). Indonesia could earn between 400 million and 2 billion USD per year on the carbon market (Adhikari, 2009). However, based on a conservative estimation, the estimated value of carbon credits will be around $ 2.5 to $ 4.5 billion per year (MoF, 2008). Scepticism also exists about the REDD+ proposal, particularly over the weak governance structures and the institutional capacities in many developing countries that could jeopardize the delivery of the benefits at local level (Agrawal, 2008). Sceptics have emphasized that the REDD...

This study has been prepared within the UNU-WIDER project Addressing group-based inequalities.