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Indonesia tracks spending on Climate Change mitigation

The Poverty-Environment Initiative

Well into the second decade of the twenty first century, the effects of climate change are being felt across the world.

Economic activity and population growth have resulted in unprecedented concentrations of green house gases in the atmosphere and led to a warming of the earth’s temperature. Sea level is rising, ocean’s acidity is increasing and the changing climate is affecting natural and human systems on all continents.

In 2009, Indonesia became the first developing country to announce a cut of greenhouse gas emissions. The biggest archipelago of the world realized its vulnerability to climate change and committed to reduce emissions by 26 percent by 2020 or 41 percent with international support.  

With almost 250 million people, Indonesia is the world’s fourth most populous nation and one of the world’s largest emitters of green house gases.

Converting to clean technologies the 16th largest economy of the world will be no easy task. Emissions are expected to increase further due to a growing population and an expanding economy highly dependent on fossil fuels. Its industry, transport, housing and commerce sectors will require profound changes to become energy efficient.  

Since 2009, many policies, action plans and commitments have been made.

But, how much is the government of Indonesia really spending on climate change mitigation? Is the money being spent in activities that can achieve the country’s ambitious emissions reduction targets?

For that purpose, the Indonesian Finance Ministry, launched a budget tagging system to track financial flows to activities that mitigate climate change with the support of UNDP and UNEP.

The Ministry of Finance aims at understanding whether activities that are currently being funded can achieve the emissions reduction targets. The system will put a tag and later will rate activities based on their contribution to reduce emissions.

It is a way to identify how much budget has been allocated and how it has been spent. Whether it contributed to reach the country’s emission reduction target through development of financial incentives, to produce policies or for practical activities like reforestation, renewable energy, eco-efficient transportation, energy efficient buildings, waste to energy or restoration of degraded land.  

Indonesia is the first country of the world to have adopted such tracking system. Seven Ministries are legally required to put it in place by 2015.

Spending wisely the government’s budget, and setting up the right incentives and disincentives is expected to encourage investors in technologies that reduce green house gas emissions.

Investors like Mr Mohammad Baedowy and Mr Douglas Manurung.

Directed by Marta Baraibar.

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