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Indonesia launches new budget-tracking system to better target climate finance

July 24, 2014

JAKARTA, INDONESIA – To better target climate finance to support the country’s reduction goals for greenhouse gas emissions, the Indonesian finance ministry recently launched a new climate finance tracking and reporting system with support from the United Nations Development Programme (UNDP), United Nations Environment Programme (UNEP) and Climate Policy Initiative (CPI). The system aims to better target and improve effectiveness of its financial resources on climate change mitigation priorities. Indonesia has previously set a target to cut its emissions by 26 % on ‘business as usual’ projections by 2020.

Indonesia is the first country in the world to have adopted this new climate finance tracking system which is based on recommendations from the Low Emission Budget Tagging and Scoring System (LESS) study by UNDP and UNEP and the Landscape of Public Climate Finance in Indonesia study by CPI. Seven ministries are legally required to implement the budget-tracking system for climate mitigation activities by 2015. This requirement is stipulated under the Finance Ministerial Decree Number 136/PMK.02/2014.

CPI’s Landscape of Public Climate Finance in Indonesia provides the most comprehensive inventory of public climate finance undertaken in the country to-date. It shows nearly USD 1 billion of climate finance flowed in 2011, with the Government of Indonesia contributing the largest share (66%). The study indicates current public finance from national and international sources is generally well-aligned with national priorities. It suggests that tracking expenditure on an annual basis would improve the ability of the government to ensure it is spent efficiently and effectively and to monitor progress.

“The landscape study helped us identify challenges related to tracking and reporting for climate finance. We are able to address these challenges with the help of LESS study and we are now taking action to establish a legal basis for climate finance tracking system. This system supports our long-term green economy goals,” says Andin Hadiyanto, Head of the Fiscal Policy Agency in the Ministry of Finance.

UNDP Indonesia Country Director, Beate Trankmann praised the launching of the new climate finance tracking and reporting system: “The climate finance tracking system will be an instrumental tool that supports Indonesia’s transition towards a green economy and for the first time next year, Indonesia is going to have a ‘green’ development budget” said Trankmann.

“Indonesia is already taking significant action to tackle climate change challenges and transition to more sustainable development pathways,” says Tom Heller the Executive Director of Climate Policy Initiative. “However, going forward it will be important to ensure that all economic resources are used in the most effective and efficient way.”

Click here to download the Landscape of Public Climate Finance in Indonesia study
To download Low Emission Budget Tagging and Scoring System (LESS) study, visit www.id.undp.org

Climate Policy Initiative (CPI) is a team of analysts and advisors that works to improve the most important energy and land use policies around the world, with a particular focus on finance. CPI works in places that provide the most potential for policy impact including Brazil, China, Europe, India, Indonesia, and the United States.

Fiscal Policy Agency is a part of the Ministry of Finance, Republic of Indonesia. It oversees the Centre for Climate Change and Multilateral Financing (PKPPIM), which performs functions such as formulating policy recommendations, as well as analyzing, evaluating, coordinating, implementing and monitoring climate change financing related issues. The Centre also deals with economic and financial cooperation within the G20 and other multilateral forums.

United Nations Development Programme (UNDP) is the UN’s global development network, advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. We are on the ground in 170 countries and territories, working with them on their own solutions to global and national development challenges. As they develop local capacity, they draw on the people of UNDP and our wide range of partners

United Nations Environment Programme (UNEP), established in 1972, is the voice for the environment within the United Nations system. UNEP acts as a catalyst, advocate, educator and facilitator to promote the wise use and sustainable development of the global environment.

Contact

Hageng S. Nugroho, Head of Energy Sector, Ministry of Finance, hageng@depkeu.go.id
Mia Fitri, Associate Director, Climate Policy Initiative, mia.fitri@cpi-indo.org
Tomi Soetjipto, UNDP Spokesperson, suryo.tomi@undp.org, +62811 888814