Where next for climate policy in Indonesia?

Where next for climate policy in Indonesia?

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Story detail:
Date: 1st June 2015
Type: Feature
Organisation: PriceWaterhouseCoopers
Countries: Asia, Indonesia
Tags: mitigation, climate finance, deforestation, energy, energy efficiency, forests, Intended Nationally Determined Contributions, sustainable development, targets

Sam Bickersteth, CDKN’s Chief Executive, recently visited Indonesia and here reflects on the many options for climate compatible development, including in the context of the country's Intended Nationally Determined Contribution (INDC).

Indonesia has rightly garnered international attention for its active, ambitious and progressive position on climate change.   The emissions reductions target of 26% rising to 41% with international support (against business as usual) and the moratorium on primary forest conversion as set out and widely championed by former President Susilo Bambang Yudhoyono has set Indonesia at the forefront of international climate diplomacy. A national climate change mitigation programme (RAN-GRK) is in place and Indonesia was one of the first countries (alongside Bangladesh) to establish its own channel for international climate finance through setting up the Indonesia Climate Change Trust Fund (ICCTF).   Donors have responded, most notably the US$ 1 bn forests pledge from the Norwegian government, although most remains undisbursed.

The new President Joko “Jokowi” Widodo has so far focused on economic growth, jobs and livelihoods including land tenure rights for indigenous people without explicit attention to climate change.   Business leaders, civil servants, and NGOs are watching with some uncertainty how climate compatible development policy will be upheld and enforced, including existing climate change strategies, programmes and institutional arrangements.   Indeed some of the core structures have already been dismantled: the previously autonomous climate change bodies – the national climate change council (DNPI) and the REDD+ task force – have been merged into the Ministry of Environment and Forestry (KLHK).

The task of ensuring that climate policies are coherent and implemented has been and is likely to continue to be a considerable challenge for the world’s fourth most populous country, which stretches across 17,000 islands and three time zones.   Delivery of ambitious climate policies was always going to be hard. This is shown by continuing high deforestation rates despite the logging ban in certain types of forest – largely a forest law enforcement issue; and expanded coal extraction and use (Indonesia is the world’s biggest coal exporter) despite emissions reductions targets – a policy coherence issue.

But while the new administration’s policies in climate change are not yet fully clear, there are undoubtedly significant opportunities in Indonesia to transition towards a climate-resilient and low-carbon economy. President Jokowi’s quick action on fossil fuel subsidies removal provides an opportunity for increased investment in renewables and energy efficiency as it removes a significant barrier to climate change mitigation. This is demonstrated by CDKN’s partners in the Ministry of Energy and Mineral Resources (ESDM) who have seen an increased demand for advice on energy efficiency standards as electricity prices rise with the subsidy reduction.

Second, there is a national research and planning expertise such as the Institut Teknologi Bandung (ITB) which is being tapped to help produce Indonesia’s Intended Nationally Determined Contribution (INDC) – its emissions reduction commitment for the United Nations climate talks in Paris later this year (see CDKN's resources page www.cdkn.org/indc for more on this general topic).   Although the original top-down climate change targets may be retained, the INDC provides an opportunity for Indonesia to come up with a renewed commitment -- this time with even deeper analysis and consultation behind the numbers. Some of the framing issues for the INDC include:

  • How to make land use and forestry more sustainable: Will measures to improve land ownership and a focus on smallholder livelihoods provide an opportunity to reduce deforestation rates?
  • Can the renewable energy industry grow together with regulations and incentives that drive energy efficiency in buildings, motors and industry?
  • What is the most effective approach to managing international climate finance at scale?   Will direct access to the Green Climate Fund through National Implementing Entities (NIE) catalyse large investments by the public sector and private banks?
  • How to build resilience to climate change and other threats including in Indonesia’s 500 cities and districts where there are immediate challenges such as sea level rise, flooding and high rates of subsidence (particularly in Jakarta)?
  • How to develop and implement solid policy narratives that provide better incentives for green growth and green jobs?   Do sustainable agriculture, forestry and land use, green infrastructure or a growing renewables and energy efficiency industry provide an effective route for growth and poverty reduction?

It remains to be seen how things will play out and the extent to which sustainable and low carbon development features on the government’s agenda over coming months and years. However, it is clear that there is an immediate opportunity in preparation of the INDC for the government to generate even more ownership for its national climate change targets and to catalyse further action towards climate compatible development.


Image: participatory forest and land use planning, Papua, Indonesia, courtesy CIFOR.



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