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Fitrian Ardiansyah, The Jakarta Post

The President’s September 2009 announcement the country would cut its greenhouse gas (GHG) emissions has placed Indonesia in the limelight.

Many countries and multilateral organizations have been lining up to help Indonesia reach its objective.

Australia, Norway, the UK, the US, Germany, the Netherlands, Japan, France and Denmark have promised to help Indonesia address climate change, notably in the forestry and energy sectors, as well as in activities involving land use.

These countries, along with others, have also taken a growing interest in helping Indonesia, given it is home to the world’s third largest forest area and has substantially increased its energy demand.

Adequate, sufficient and sustainable financing from developed countries and multilateral platforms is required to significantly reduce GHG emissions in Indonesia.

Financial support from these entities is also necessary to signal, in particular to the private sector, the need to shift investment flows towards decoupling economic growth from increasing emissions, and towards a low carbon and climate resilient future.

Providing financial support is a critical factor to ensure a developing country like Indonesia succeeds in fulfilling its voluntary pledge.

However, crucial questions need to be addressed. Firstly, is the current and future financing promised — on top of the government’s own budget — sufficient to meet the costs required to mitigate climate change?

Secondly, how do we make sure this financial support addresses the real and strategic challenges identified to mitigate climate change?

Without a comprehensive assessment of the financial support coming from developed countries, important components might be overlooked and objectives to mitigate climate change may not be reached.

The devil is always in the details.

The UN Framework Convention on Climate Change (UNFCCC) in its National Economic, Environment and Development Study (NEEDS) for Climate Change estimates the average annual cost of the potential mitigation measures proposed until 2030 at ¤12.84 billion, equivalent to approximately 5.6 percent of Indonesia’s GDP in 2005.

From 2010 onwards, this annual cost of abatement is expected to account for 0.9 percent of the country’s projected GDP in 2030 as a result of Indonesia’s rapidly increasing GDP.

In Indonesia’s Second National Communication (SNC) under the UNFCCC, published by the ministry of the environment, the government committed to implement 54 climate change projects in the next five years, which would cost around US$897 million.

In fact, the government allocated $213 million from the state budget in 2009 toward addressing climate change.
So, combined with the ministry of environment’s budget and the funds allocated to environmental development, the total amounts to $991 million.

Although the figure may seem impressive, it only amounts to 0.013 percent of the central government’s budget expenditure, and only 0.008 percent of Indonesia’s total budget expenditure.

The budget the government allocated toward addressing climate change was also far from the annual costs required to implement potential mitigation measures.

As reported in NEEDS, overseas development assistance (ODA) and climate Multilateral and Bilateral Assistance are expected to contribute around $1.17 billion per year toward climate change mitigation.

These figures — both from the government’s budget and overseas’ support — are far from adequate and sufficient.
Indonesia must convince developed countries they need to increase their financial support — as promised in a number of international forums — to help implement climate change actions in developing countries.

This will prevent much higher costs resulting from inaction, and shift the estimated $1.5 trillion of global annual private sector investment needed to spur a clean energy economy.

Once the private sector has been convinced to throw its weight behind clean energy, there will likely be significant new and additional investments in renewable energy, energy efficiency, tackling deforestation and new climate-friendly technologies.

One must also carefully examine the objectives and types of interventions targeted by the financial
support.

Some financial assistance is directly targeted at specific sectors, investing in quick gains or low-hanging fruits.
There are sizeable interests in supporting projects on the ground (e.g. community forestry, REDD demonstration/pilots and micro-financing for rural electricity).

There are indications, however, that financial assistance is still shying away from supporting comprehensive work (i.e. cross-sectoral and multi-stakeholders’ approaches) that could ensure systemic and strategic changes in the country’s development policies, framework, governance and operations.

It is challenging for this country to implement long-term sustainable solutions without involving more sectors, layers of governments and stakeholders.

Trust built across sectors and between all stakeholders will foster synergies, which will prevent efforts from individuals and sectors from canceling each other out.

To reach positive outcomes from climate change actions in this country, it is imperative that any support provided is open, inclusive, transparent and performance-based.

Indonesia must also actively guide programs supported by international public funding to concretely safeguard the global climate, the country’s economy, people’s livelihoods, as well as the country’s ecosystems and biodiversity.

Clear rules and mechanisms are therefore required to show how and where the money will be spent, and how it will be monitored.

In the end, financial support must be sufficient and well allocated. Now, it is up to the country to ensure this happens.

The writer is program director of climate & energy at WWF-Indonesia, and adjunct lecturer at Paramadina Graduate School of Diplomacy. He can be reached at fardiansyah@wwf.or.id

By Jonathon Wootliff for The Jakarta Post | Tue, 10/28/2008

The media bombardment on the global economic crisis has left us in no doubt that the impacts will be deep and far reaching.

Newspapers, radio and television are hammering home the dismal details of how the situation is going to affect jobs, pensions, savings and the like.

But there’s all too little mention of what this might mean for the environment.

My fear is that we are going to allow a financial crisis to turn into a ecological catastrophe. With an election looming, I am concerned that the Indonesian government will be tempted to offer short-term fixes at the long-term expense of the country’s fragile ecosystems.

President Susilo Bambang Yudhoyono is going to face his biggest test. He’s long espoused the importance of environmental protection and famously placed Indonesia on the map of eco-responsible states during his passionate interventions at last December’s climate change convention in Bali.

Will he now cut corners on environmental protection as the economic slump sets in? Or will he stand by his principles and continue to implement the much-needed protective measures?

This great nation supports tremendous biodiversity of animal and plant life in its pristine rain forests and its rich coastal and marine areas. Up to 3,305 known species of amphibians, birds, mammals and reptiles, and at least 29,375 species of vascular plants are endemic to the nation’s more than 17,000 islands.

Indonesia’s stunning natural environment and rich resources however, are facing sustained challenges both from natural phenomena and human activity.

Mounting population pressure together with inadequate environmental management is a challenge for Indonesia that hurts the poor and the economy. Total economic losses attributable to limited access to safe water and sanitation are conservatively estimated at two percent of GDP annually, while the annual costs of air pollution to the Indonesia economy have been calculated at around US$400 million per year.

These costs are disproportionately borne by the poor because they are the ones more likely to be exposed to pollution and less likely to be able to afford mitigation measures.

Natural resource challenges have persisted and become more complicated after decentralization. The forestry sector has long played a pivotal role in supporting economic development, the livelihoods of rural people and in providing environmental services. However, these resources have not been managed in a sustainable or equitable manner.

Turning this situation around requires courage and vision — ideally led by the government — of what a viable and environmentally sound forestry sector might look like.

The country’s administrative and regulatory framework cannot yet meet the demands of sustainable development in spite of a long history of support for policy and capacity development both from within the government and with international donor support.

Indonesia’s ministries concerned with environment and natural resources management have benefited from good national level leadership, and also from an active network of civil society organizations throughout the country that are focused on environmental issues, with significant advocacy experience.

But improving Indonesia’s approach to environment and natural resources management is extremely challenging.

Two reasons account for much of the poor performance. First, despite the substantial investment in environment and natural resources policy and staff development, actual implementation of rules and procedures has been poor and slow due to weak commitment by sector agencies, low awareness in local departments and capacity challenges at all levels.

And awareness about the expected negative environmental impacts of sustained economic growth and the mechanisms for stakeholders to hold government agencies accountable for their performance are weak.

Second, there is little integration of environmental considerations at the planning and programmatic levels, especially in the public investment planning process and in regional plans for land and resource use.

In the main, Indonesia’s environment has benefited from this government’s more committed approach. But there is still a very long way to go. Now is not the time to reduce the efforts to protect this country’s vital ecosystems.

For the sake of nature and the people of this country, we must appeal to the better judgment of the government not to loosen its grip on the vital environmental challenges.

Prudent economic management is surely vital right now. But we cannot allow the problems that have stemmed half a world away on Wall Street to take its toll on Indonesia’s precious environment.

Jonathan Wootliff is an independent sustainable development consultant specializing in the building of productive relationships between companies and NGOs. He can be contacted at jonathan<at>wootliff<dot>com