Indonesia needs US$312bil to make good on carbon pledge: minister

The technology for Indonesia to reach and exceed its climate action target is available and the financing can be sought, experts say, noting that the crucial part is political will. - JP

JAKARTA (The Jakarta Post/ANN): Indonesia needs to invest US$312 billion to reach its target for reducing greenhouse gas (GHG) emissions by 2030, according to Finance Minister Sri Mulyani Indrawati.

The figure is based on the estimated contribution stated in the reworked nationally determined contribution (NDC), Indonesia’s pledge made under the Paris Agreement on climate change.

“That’s a huge number. [...] The question now is how to finance the implementation,” the minister said at the Indonesia Green Summit 2021, which was held online on Tuesday.

As its NDC, Indonesia promises to reduce emissions by 29 per cent against a business-as-usual scenario by 2030, or by up to 41 per cent with support from the international community.

Indonesia’s state budget plan identifies climate change control spending through budget tagging, which shows that the individual items currently add up to 4.1 per cent of the total budget.

From 2018 to 2020, Indonesia allocated $7.08 billion, or 4.3 per cent of the total state budget, to climate change measures, which is only 34 per cent of the annual funding needed, according to Sri Mulyani.

On the national level, the government has issued several fiscal policies, such as a tax holiday and a tax allowance, and issued Government Regulation No. 74/2021 on the luxury vehicle tax, which will take effect on Oct 16.

The government has also begun marketing so-called green sukuk to retail investors with the aim of financing projects apt to slow climate change. It issued $100.84 million worth of such securities in 2019 and another $374.50 million in 2020.

“Nevertheless, all the initiatives need to be in line with our economic recovery plan,” the minister added. -The Jakarta Post/Asia News Network

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