Indonesia's leadership on LEDS
Case StudyCoordinating institutions for LEDS and NAMA development
Building on its 2009 pledge to reduce national GHG emissions (by 26% in 2020) and a subsequent climate change action plan published in 2011, Indonesia has made substantial progress in strengthening its capacity and institutional framework for delivering effective climate change mitigation. A key part of this institutional architecture is the Climate Change National Coordination Team (CCNCT) which is a body established under the State Ministry of National Development Planning (BAPPENAS).
The CCNT has joint responsibility for developing and detailing national and provincial level GHG mitigation action plans (effectively the Indonesia LEDS) and supporting the development and coordination of NAMAs. This joint role, implemented by a national planning ministry, is demonstrating important synergies and benefits including the integration of the LEDS within broader national development planning processes and the integration of NAMAs as the key mechanism for achieving the countries’ mitigation pledges and implementing its LEDS.
The CCNT is also strengthening coordination between and within line ministries on NAMA development to ensure priorities and national criteria are respected and is enabling more coherent communication of Indonesia’s NAMA development as a whole.
Case StudyThe impact of Indonesia’s public climate finance system
Indonesia is pushing forward to sustain economic growth while reducing greenhouse emissions. The country aims for a 26% reduction in business-as-usual levels by 2020, or 41% with international support. To reduce greenhouse gas emissions, Indonesia recognizes the critical role of finance. Public and private financing, from both foreign and domestic entities will be needed to invest in emission reducing strategies and technologies. To better understand the flow of financing the Indonesian Ministry of Finance’s Fiscal Policy Agency and the Climate Policy Initiative implemented a comprehensive study of Indonesia’s financial market to establish a baseline upon which to improve the investment markets. The focus of the analysis is to understand which actors are investing, through what instruments, into what technologies, and for what reasons, in order to provide a baseline against which to measure progress and plan for scaling up.
In order to achieve Indonesia’s plans to reduce green house gasses by 26%, both indirect and direct investment approaches are being used to establish the appropriate mechanisms to insure stable and continued investment. The bulk of current investment (~75%) support “indirect” activities, meaning it is used to establish oversight mechanisms, research and development, reporting and verification systems that lead to strong foundation for future scale-up projects. Thus, enabling funding of “direct” mitigation projects. This investment methodology makes sense from the government’s policy development perspective. Currently, investment vehicles include loans, grants, budget expenditures, equity participation, and revolving funds. Investment distribution keys on the most emission intense sectors, which are forestry (41%), energy (19%), agriculture and livestock management (10%), transport (9%), and waste and waste-water (7%).
This case study serves as a baseline investment-market analysis that aims to understand the trends in Indonesian climate investment. Providing a baseline understanding of the amount of money being invested (directly or indirectly) into different sectors allowed the Indonesian government and private investors to assess progress and scale up activity. Focusing on “indirect” investments early on is helpful to reveal barriers, such as the need for a system connecting and tracking national investment with local expenditures.The analysis supported the Government of Indonesia in the following good practice areas:
- Developing a baseline market analysis study
- Understanding investment patterns
- Aligning finance with national priorities
Case StudyIndonesia calculates GDP of the poor in fight against climate change
Indonesia took a key step towards its ambitious goal of transitioning towards a green economy. The country tested a new model that shows policymakers how their development decisions can help or hinder the green transition. The Indonesia Green Economy Model (I-GEM) also shows how development interventions can affect the incomes of poor people who are largely reliant on natural resources for their livelihoods - revealing often unseen capital of the poor for the first time.
A key step towards making this transition was taken when the country began testing the new I-GEM. This model allows policymakers to measure the impact of development proposals. It can be used to see how interventions made under 'business-as-usual' scenarios compare with green economy actions. Specifically, policymakers can see the impacts in a particular province on poor people's incomes; the depletion or degradation of natural resources; and the availability of decent green jobs.
Green GDP is an alternative measure of GDP that takes into account the loss of natural capital. Along with the Decent Green Jobs indicator (developed by the International Labour Organization), Green GDP has been widely used around the world. But, I-GEM also incorporates a new 'GDP of the Poor' indicator that reveals, for the first time, the impact of certain policy interventions on poor people's incomes, whose living often depends on nearby ecosystem services.
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