Tag Archives: Indonesia

Menjaga Momentum Pendanaan di Konferensi Perubahan Iklim 2017

February 26, 2018 |

 

Dunia sepakat batasi pemanasan global tidak lebih dari dua derajat Celcius dan beradaptasi terhadap dampak perubahan iklim. Bagaimana soal pendanaannya yang tak sedikit itu? Opini Suzanty Sitorus.

Pertemuan puncak negara-negara Pihak UNFCCC 2017 (COP 23) dilaksanakan di akhir tahun, seperti di tahun-tahun sebelumnya. Ini merupakan saat yang tepat juga untuk melakukan refleksi tentang berbagai tantangan dan hasil sepanjang tahun yang berpengaruh terhadap target-target yang harus dicapai pada tahun 2020 dan persiapan pelaksanaan Kesepakatan Paris yang akan dimulai di tahun 2020. Dunia telah bersepakat untuk bersama-sama membatasi pemanasan global tidak lebih dari dua derajat Celcius dan beradaptasi terhadap dampak perubahan iklim.

Salah satu tantangan terbesar adalah perkembangan politik dan ekonomi, domestik dan internasional, yang memicu dinamika pelaksanaan kesepakatan global tersebut. Meskipun sudah tercapai kesepakatan, kemungkinan perubahan komitmen selalu terbuka. Keputusan Presiden Donald Trump tentang penarikan diri Amerika Serikat dari Kesepakatan Paris dan hasil pemilihan umum di berbagai negara-negara kunci memercikkan keraguan akan efektivitas pembahasan persiapan teknis untuk Kesepakatan Paris selama tahun 2017 hingga 2019. Perubahan komitmen semacam itu juga dikhawatirkan menimbulkan efek psikologis bagi aktor politik, bisnis, dan masyarakat di berbagai negara sehingga enggan berkontribusi untuk penanganan perubahan iklim.

Aliran pendanaan iklim di tingkat global

Dalam konteks ini, para juru runding yang akan menghadiri COP 23 dan juga publik internasional dapat memetik pelajaran dari laporan yang diluncurkan oleh Climate Policy Initiative (CPI) minggu ini tentang aliran pendanaan iklim di tingkat global. Laporan Lanskap Pendanaan Iklim Global 2017 merupakan yang paling komprehensif dengan data dari tahun 2015 dan 2016 yang juga menyajikan untuk pertama kalinya tren lima tahun tentang bagaimana, dimana dan dari mana pendanaan berasal. Laporan ini juga mengidentifikasi kesenjangan dan peluang untuk meningkatkan investasi.

Lanskap Pendanaan 2017 tersebut mengindikasikan bahwa dua tahun sejak dicapainya Kesepakatan Paris, masyarakat global masih menghadapi tantangan yang signifikan dalam memobilisasi investasi yang dibutuhkan untuk memenuhi Kesepakatan Paris. Pemerintah sedang memusatkan perhatian pada cara-cara yang efektif untuk membiayai pelaksanaan Nationally Determined Contribution(NDC)—kontribusi yang dijanjikan oleh setiap negara sebagai bagian dari Kesepakatan Paris. Sementara itu, lembaga-lembaga keuangan publik dan swasta berupaya untuk memanfaatkan sinyal politik yang kuat yang disampaikan oleh Kesepakatan Paris untuk mengembangkannya menjadi peluang investasi hijau.

Berikut beberapa intisari dari Lanskap Pendanaan Iklim Global 2017:

•      Aliran pendanaan iklim mencapai rekor tertinggi sebesar 437 miliar dollar AS pada tahun 2015, diikuti oleh penurunan 12 persen di tahun 2016 menjadi 383 miliar dollar AS, meskipun masih lebih tinggi daripada tahun 2012 dan 2013. Dengan memperhitungkan fluktuasi tahunan, aliran pendanaan rata-rata di tahun 2015/2016 sebesar 12 persen lebih tinggi daripada di tahun 2013/2014.

•      Kenaikan pada tahun 2015 didorong oleh lonjakan investasi untuk energi terbarukan, terutama di China, dan untuk panel surya atap rumah di AS dan Jepang.

•      Meningkatnya investasi oleh sektor swasta menunjukkan pasar yang mulai berkembang untuk energi terbarukan dari angin dan surya, sehingga kebutuhan dukungan pemerintah tidak lagi sebesar sebelumnya. Meskipun demikian, secara umum, investasi pemerintah tetap menjadi landasan bagi investasi swasta dari tahun ke tahun.

•      Selama tahun 2015-2016, 79 persen pendanaan digalang dari negara dimana investasi dilakukan. Tren investasi domestik yang terus meningkat menunjukkan pentingnya kerangka kebijakan dan peraturan yang kuat oleh pemerintah nasional untuk mendukung proyek-proyek mitigasi dan adaptasi perubahan iklim.

•      Peningkatan drastis investasi untuk energi surya dan energi angin lepas pantai memberikan harapan bahwa pergeseran dari energi berbasis fosil ke arah energi terbarukan mulai terjadi dan akan membantu dunia menahan laju pemanasan global. Meskipun demikian, investasi untuk teknologi terbarukan dan sektor lain masih jauh dari kebutuhan yang nilainya sekitar 1 triliun dollar AS per tahun. Sektor lain yang masih sangat membutuhkan investasi antara lain kelistrikan, efisiensi energi industri, transportasi, pertanian, air, pengurangan deforestasi, dan adaptasi.

•      Total investasi untuk bahan bakar berbasis fosil masih jauh lebih besar dibandingkan investasi pro-iklim. Hal tersebut mengurangi efektivitas investasi hijau dan juga meningkatkan risiko dalam sistem keuangan, misalnya aset perusahaan minyak atau batubara akan menjadi “stranded asset”—aset yang mengalami penurunan atau kehilangan nilai secara prematur.

•      Meskipun aliran pendanaan masih jauh dari yang dibutuhkan, laporan mencatat beberapa tren positif yang dapat mempengaruhi prospek peningkatan pendanaan iklim di tahun-tahun mendatang: Beberapa negara mulai menjabarkan rencana NDC mereka sehingga memberikan kejelasan mengenai peluang investasi untuk mewujudkannya; pemerintah dan lembaga keuangan berinisiatif untuk menghijaukan aliran keuangan publik yang ada; diskusi di seluruh industri tentang keterbukaan dalam pelaporan mengenai risiko keuangan yang ditimbulkan oleh perubahan iklim; dan penggunaan lebih luas berbagai jenis pendanaan campuran dan inovatif.

Menanti komitmen pemerintah

Perkembangan positif yang terjadi dalam investasi pro-iklim menegaskan bahwa keteguhan komitmen dan ambisi pemerintah dalam mengatasi perubahan iklim perlu terus dijaga karena hal tersebut menjadi dasar pertimbangan investasi hijau oleh swasta dan masyarakat.

Kebijakan dengan target yang jelas dan ambisius ditambah dengan dukungan insentif akan memicu derasnya investasi oleh swasta dan masyarakat. Sebaliknya, kebijakan yang tidak pro-iklim akan dipahami oleh sektor swasta sebagai risiko untuk investasi hijau. COP 23 di Bonn, Jerman, harus mampu mempertahankan momentum Kesepakatan Paris agar investasi hijau terus meningkat dan makin pesat.

Tulisan ini telah dimuat di rubrik IPTEK, Deutsche Welle, pada tanggal 13 November 2017. Tulisan ini juga dapat diakses melalui tautan ini.

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National-level climate finance tracking can help countries meet NDC goals effectively

November 10, 2016 |

 

Around the world, 74% of total global climate finance and over 90% of total private climate finance is raised and spent in the same country. As low-carbon, climate-resilient assets become increasingly attractive to national actors compared to the alternatives, action on climate is largely happening within national contexts.

In fact, the domestic bias of climate finance is likely understated. CPI’s Global Landscape of Climate Finance reports have repeatedly highlighted substantial data gaps around domestic budgets in particular.

In 2014, the majority of global climate finance was raised and spent in the same country. Because domestic investment dominates, it is vital to get policies right. This requires robust national-level climate finance tracking.

The majority of finance was raised and spent in the same country. Because domestic investment dominates, it is vital to get policies right. This requires robust national-level climate finance tracking.

Clearly, understanding how finance flows within countries is key to accelerating countries’ transitions toward low-carbon and climate-resilient economies.
CPI has worked with counterparts in Germany, Indonesia and most recently Côte d’Ivoire to track their climate finance and other organizations are also tracking climate finance at the national level. For example, Institute for Climate Economics (I4CE) used CPI’s approach as a foundation to conduct a similar exercises in France, Trinomics has done similar work in Belgium, and the United Nations Development Programme (UNDP) has worked with seven Asia-Pacific countries to understand climate-related public expenditures in their national budgets.

While these countries have made a start, more work is urgently needed as improved national tracking will critically inform countries’ efforts to implement their Nationally Determined Contributions (NDCs) submitted under the Paris Agreement. The International Energy Agency (IEA) has estimated that, to implement NDCs, energy efficiency and low-carbon technologies require$13.5 trillion in investment over the next 15 years. Ensuring that investment from a range of national and international sources is optimized will help ensure impact and value for money.

There are many benefits to improving national-level climate finance tracking systems

Identifying, tagging, and tracking budget allocations that respond to climate change challenges enhances governments’ ability to allocate appropriate resources at the national and local levels and ensure they are being spent as intended.

Increasing understanding of what different domestic and international, public and private actors are investing, in which climate-relevant activities, and what instruments they are using to deliver finance, can help identify blockages, and highlight opportunities to better coordinate spending and reallocate finance to areas where it will have more impact.

Extending the scope of tracking exercises beyond climate finance can reveal how much public money is flowing to support business-as-usual investments including in fossil fuels, and unsustainable land use. Understanding where public incentives are misaligned with climate goals can highlight opportunities to improve policies and ensure public spending is coherent.

CPI has designed related tools to inform decision makers thinking around this broader question and is applying them in the context of REDD+ related finance in Côte d’Ivoire to support the country’s work to develop a REDD+ strategy.

Ultimately, such tracking provides a basis for decision makers to ensure that limited domestic and international public resources are targeted where and how they are needed most to help countries achieve their goals. Effective tracking provides a starting point to inform discussions about what is happening, and informs the design of more cost-effective policies and financial instruments to mobilize investment.

CPI remains committed to improving understanding of climate finance flows at the national and local levels.

Since 2010, CPI has supported decision makers from the public and private sectors, at international, national and local levels, to define and track how climate finance is flowing from sources and actors, through a range of financial instruments, to recipients and end uses. Providing decision makers with robust and comprehensive information helps them to assess progress against real investment goals and needs. It also improves understanding of how public policy, finance and support interact with, and drive climate-relevant investment from diverse private actors, and where opportunities exist to achieve greater scale and impact.

This blog is part of a series on climate finance tracking challenges. Read more here.

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If you would like our support tracking your climate finance flows, get in touch here.

This article first appeared on Public Finance International.

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Graphic Spotlight: What is the role of public finance in deploying geothermal energy in developing countries?

March 9, 2016 |

 

Despite great potential, geothermal deployment in developing countries has been below expectations since 2010. Geothermal energy has the potential to provide significant amounts of low-carbon electricity in many developing countries and is the cheapest source of available power in some developing countries.

The major barrier is securing early-stage project finance given the scarce public resources available to invest in exploration and development. While some countries are pursuing policies to liberalize energy and electricity markets to attract private investment, significant difficulties remain.

CPI analyzed three case studies on behalf of the Climate Investment Funds, with the aim of helping policymakers and development finance institutions understand which policy and financing tools to use in order to enable rapid and cost-effective deployment of geothermal for electricity.

Role of public finance in deploying geothermal energy

Our case studies show that the increase in tariffs needed to provide sufficient returns to incentivize private investment can be entirely offset by public measures addressing specific risks. This graphic illustrates how these public risk mitigation measures (orange) combine to result in a final levelized cost of electricity for a privately developed project (dark grey) that is even lower than what it would have been for the state to develop it (light grey).

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Three ways international development partners can help Indonesia solve its land use challenges

February 24, 2016 | and

 

At least 25 major aid organizations have been actively engaged in efforts to reduce Indonesia’s greenhouse gas emissions from land use over the last five years. Several of these funders, including the UK Climate Change Unit Indonesia, and the Norwegian Agency for Development Cooperation, have even refocused a large portion of their programs in Indonesia on the land use challenge.

Land use challenges in Indonesia - Photo credit: Elysha Rom-Povolo

Photo credit: Elysha Rom-Povolo

This sharp focus isn’t surprising when you take into account that 44% of global land use and forestry emissions came from Indonesia in 2012 Last year saw unprecedented emissions from forest and peat fires in Indonesia, with emissions from fires alone expected to reach around 1750 MtCO2-eq., which is almost equal to Indonesia’s entire greenhouse gas emissions from all sectors in 2012.

The involvement of many international development organizations is also good news given that the Government of Indonesia has sent strong signals to the international community that their support is needed. Indonesia has committed to reduce greenhouse gas emissions by 26% by 2020, scaling up to 29% by 2030, and further extending their ambition to 41% with international support. Around 90% of that target is anticipated to come from reducing deforestation and peat emissions.

The question is, have the efforts been working?

We recently took on this question in a study that looked at international public climate finance flows to land use from major development partners, “Taking Stock of International Contributions to Low Carbon, Climate Resilient Land Use in Indonesia.”

We found mixed results.

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Graphic Spotlight: Who benefits from Indonesia’s palm oil revenues?

January 27, 2016 |

 

The fiscal system may inadvertently increase deforestation

Indonesia’s palm oil sector has been making headlines recently because of the sector’s connection with fires from peatland conversion. Late last year, President Joko “Jokowi” Widodo announced a shift in peatland management, with policies designed to halt agricultural expansion into peat forests while facilitating the rehabilitation of already degraded peatlands.

Given the economic importance of palm oil, Indonesian policy makers, industry, and communities are looking for ways to grow the sector’s productivity without contributing to this deforestation and emissions.

Indonesia's palm oil revenuesCPI analysts recently looked at how fiscal incentives for palm oil – and land use more broadly – could be adjusted to contribute to a more efficient and sustainable sector.

This graphic, produced by Tim Varga and Angela Falconer, shows that of the nearly one billion USD the Indonesian government collects annually in tax revenues from palm oil, less than 15% goes to the regions that produce the crop.

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Reforming fiscal policies to remedy land use woes

January 11, 2016 | and

 

This post was originally published by the Jakarta Post.

President Joko “Jokowi” Widodo’s administration has been busy this year, announcing several new policy packages to strengthen the economy in a few months. Then in November the President declared a radical shift in peatland management, with policies designed to halt agricultural expansion into peat forests while facilitating the rehabilitation of already degraded peatlands.

In December, Indonesia made a commitment at the Paris climate change negotiations to reduce emissions by 29 percent by 2030.

This tension between economic growth and environmental protection requires skillful balancing across Indonesia’s economy and particularly, in the expanding agriculture sector.

The proposed economic packages offer tried and true approaches to encouraging business growth. But they lack consideration of how fiscal adjustments could encourage environmental protection while encouraging growth.

Our analysis shows big potential, uncovering inefficiencies in fiscal policies in the land use sector, and suggesting that reforms in this area may be a win-win for better, cleaner growth.

For example, currently, 93.5 percent of all government revenue related to land use comes from levies based on production volume instead of land size.

The more you produce, the more you pay, and there are neither penalties nor rewards to use less land. Only for the land and building tax and a few state taxes are levied in proportion to land used — the more land in play, the more tax you pay.

However, even these taxes create little correlation between the value of the land and the amount paid. So, for now, with land undertaxed, businesses have every reason to use more land to increase production, rather than improving the productivity of land already in play.

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How the Current Haze Disaster has Rekindled Hope for Indonesia’s Peatlands

November 25, 2015 |

 

This year’s forest and peat fires in Indonesia have reached unprecedented scale. The Global Fire Emissions Database[i] estimates that by 16 November, more than 122,000 forest and peat fires will have emitted 1.75 billion metric tons of CO2 equivalent. The World Resources Institute (WRI) calculated that as of 16 October, emissions from fires had exceeded those of the total US economy – more than 15 million tons CO2 per day – on 26 separate occasions, noting that the U.S. economy is 60 times larger than Indonesia’s.

Indonesia's peatlands

Photo by Julius Lawalata, World Resources Institute

Put another way, in just three weeks, emissions from fires in Sumatra and Kalimantan exceeded the annual emissions of Europe’s largest economy, Germany.[ii] The fires have caused environmental havoc, a surge in respiratory illnesses and other health impacts, and economic losses around the region. After mounting international pressure, President Widodo announced radical new caps on peat use: an end to licensing for concessions on peat lands, a review of existing licensing, recognition of high carbon value lands, and the creation of a program to restore the carbon-rich forests and peatlands. The government is reportedly exploring the establishment of a new Peat-land Management Agency to spearhead efforts.

This is not the first time moratorium-like measures have been announced in Indonesia. Success will lie in the extent of implementation and especially, in enforcement. But there is very real potential here for Indonesia to transform the way peat is used, particularly in the agricultural sector—with international assistance. Indonesia’s peatlands and tropical peat swamp forests, store more carbon than any other terrestrial ecosystem and are important reservoirs of biodiversity and ecosystem services such as water filtration. There is global significance in the efforts to find ways to rehabilitate peat forests degraded due to deforestation and inefficient agricultural practices.

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Indonesia’s INDC – A step forward or a missed opportunity?

September 28, 2015 |

 

 

Indonesia submits its INDC

As the Paris climate negotiations draw closer, countries have been asked to submit their Intended Nationally Determined Contributions – INDCs – by 1 October. INDCs identify the actions a government intends to take as the basis of post-2020 global emissions reduction commitments, that will be included in the future climate agreement. The process of setting the INDC is bottom-up and country-led, in contrast to the top-down approach of the Kyoto Protocol. INDCs already submitted have been heavily scrutinized and judged for the level of ambition or leadership.

Given the importance of the INDCs as a way for nations to take stock of their goals and needs and to chart paths towards an ambitious outcome in Paris, our question here is whether Indonesia has taken full advantage of this opportunity to close the gaps in existing and newly proposed policy frameworks, to pave the way for a prosperous, decarbonized economy.

Baselines – going back to the drawing board

Indonesia is presenting its INDC as a deviation from business as usual using projections based on the historical trajectory (2000-2010). It assumes projected increases in the energy sector in the absence of mitigation actions, however details of these assumptions and how they are modelled have not been disclosed in the INDC document.

As Indonesia’s INDC sets out a 26% emission reduction by 2020 and 29% emission reduction by 2030 based on a 2010 projected business as usual scenario, at a glance, this seems to imply that the first target was very ambitious, or perhaps that the new one, which adds a further 3% over the next 10 years, is hedging bets. It could also imply that the Government of Indonesia has calculated the variables with extra care and has set a more realistic target. In any case, because inventory and monitoring systems have not been able to estimate progress to date, it is hard to decipher where Indonesia stands with respect to business as usual and where they could go.

Casting more light on this situation in the latest inventory, and outlining in detail the baseline as well as assumptions and modelling underlying it, for each sector, would add credibility to Indonesia’s upcoming Third National Communication to UNFCCC in 2016.

Capitalizing on low hanging fruits

Since forestry emissions (from land and land use change, as well as peat and forest fires) as per Indonesia’s Second National Communication to the UNFCCC of 2010 account for 63% of the emissions profile, a landscape-scale ecosystem management approach, emphasizing the role of sub-national jurisdictions to decarbonize the economy, could be highly relevant to Indonesia. The INDC document describes its strategic approach as recognizing that climate change adaptation and mitigation efforts are inherently multi-sectoral in nature and require an integrated approach. However current on-going efforts, such as the moratorium on the clearing of primary forests, are not enough to curtail rising pressures on land. Increased palm oil production and the recent push for expanding markets for biodiesel, upcoming food security programs which open one million hectares of new paddy fields, and 35 GW of power to be installed by 2019 – much of it coal based, while all important to Indonesia’s growing economy, could threaten Indonesia’s sustainability goals if not managed properly.

Climate Policy Initiative’s protection and production and land management approach (PALM), applied in applied in Central Kalimantan, in collaboration with the University of Palangkaraya, aims to lead the way in this regard by bringing together private, public, and smallholder-farmer stakeholders to unlock a new, collective approach to agriculture that will promote food security, energy security, socially inclusive economic development and environmental sustainability. The project has already identified opportunities to increase profitability and productivity for smallholder farmers through larger scale management in the form of cooperatives. Such opportunities reduce pressure on land, support sustainable development of the palm oil economy, and provide livelihood benefits to the smallholder community. Such initiatives could also potentially lead to quantifiable emissions reductions.

Scaling up climate finance required to deliver the INDC

The Landscape of Public Climate Finance in Indonesia conducted by the Indonesian Ministry of Finance’s Fiscal Policy Agency and CPI found that public climate finance in 2011 reached at least IDR 8.377 billion (USD 951 million). The Government of Indonesia disbursed at least IDR 5,526 billion (USD 627 million) or 66% of those flows. The finance was well targeted, with most of it flowing through to the forestry sector (73%) and laying a strong foundation for decarbonizing the economy through policy development and capacity building.

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Tracking climate finance can support better policy in developed and developing countries

December 12, 2014 |

 

Climate finance tracking is one of the topics under discussion at the international climate negotiations taking place in Lima this week. Our work on tracking climate finance for countries like Germany and Indonesia and in upcoming reports for organizations has demonstrated the benefits of mapping climate finance flows. This video shares some of the insights from the recent Landscape of Public Climate Finance in Indonesia we carried out with the Ministry of Finance in Indonesia and describes how it is supporting Indonesian policymakers to develop more effective tracking systems and policies.

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Policy Watch: South Korea advances on cap and trade and world’s largest REDD project approved

June 4, 2013 |

 

This week, climate policy headlines from around the world include a new multinational renewable energy coalition, progress on cap-and-trade in South Korea, and the world’s largest REDD+ project moving forward in Indonesia.

Uday Varadarajan and Elinor Benamicontributed headlines to this edition of Policy Watch.

South Korea plans ambitious carbon market
South Korea’s government plans to meet in May with the nation’s biggest emitters to provide information about the start of cap and trade in 2015.

The government plans to select an exchange for greenhouse- gas emissions in the second half of this year and decide how to allocate free allowances to an estimated 480 emitters by June 2014, Lee Hyung Sup, a deputy-director at the Ministry of Environment, said in a phone interview yesterday in Seoul. Trials for carbon trading are set to start in June 2014, he said. Full article.

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