Chapter 13
Climate Budget Tagging: Amplifying
Sub-National Government’s Role
in Climate Planning and Financing
in Indonesia
Zahra Zafira Mutiara, Dede Krishnadianty, Budhi Setiawan,
and Joko Tri Haryanto
Abstract The economic growth that Indonesia has experienced relies heavily on
the availability of natural resources, and consequently the success to mitigate environmental risks is associated with climate change. Such fact is widely acknowledged
in the medium-term national planning process and reflected appropriately in several
key national climate policies. The establishment of a far-reaching national plan on
climate mitigation has pushed the sub-national governments to set ambitious targets
that supposedly guide provincial and district governments to carry out low carbon
development plans. Using climate budget tagging as defined by UNDP as a public
expenditure assessment tool, insights from East Kalimantan Province and West Kutai
District were attained. The results of climate budget tagging in the province and one
of its districts consecutively depict that 7% and 47% of budget allocation in 2015
were potentially in support of low carbon development, while in 2016 both allocations in East Kalimantan (24%) and West Kutai (16%) encouraged further discussions on the dynamics of climate mitigation at the sub-national level of governance.
Nonetheless, such seemingly high allocations of the regional government budget
that were earmarked for achieving climate mitigation targets were not equipped with
clear outputs and outcomes that were sensitive to climate mitigation. The findings
also show that there was insufficient local government fiscal space to reinforce the
newly set Indonesia’s NDC target of 29% emission reduction by 2030. In ensuring
that climate mitigation is being integrated into the development agenda, as well as
in promoting transparency, accountability, comparability and consistency in climate
finance, the following policy recommendations are proposed: (1) anticipating and
Z. Z. Mutiara (B) · D. Krishnadianty
WWF Indonesia, Graha Simatupang, Jakarta Selatan 12540, Jakarta, Indonesia
e-mail: zz.mutiara@gmail.com
B. Setiawan
Faculty of Engineering, Sriwijaya University, South Sumatra, Inderalaya 30662, Indonesia
e-mail: budhi.setiawan@unsri.ac.id
J. T. Haryanto
Centre for Climate Change and Multilateral Policy, Fiscal Policy Agency, Ministry of Finance,
Jalan Dr. Wahidin Raya No. 1, Jakarta Pusat 10710, Indonesia
e-mail: djohar78@gmail.com
© Springer Nature Switzerland AG 2021
R. Djalante et al. (eds.), Climate Change Research, Policy and Actions in Indonesia,
Springer Climate, https://doi.org/10.1007/978-3-030-55536-8_13
265
Climate Budget Tagging: Amplifying
Sub-National Government’s Role
in Climate Planning and Financing
in Indonesia
Zahra Zafira Mutiara, Dede Krishnadianty, Budhi Setiawan,
and Joko Tri Haryanto
Abstract The economic growth that Indonesia has experienced relies heavily on
the availability of natural resources, and consequently the success to mitigate environmental risks is associated with climate change. Such fact is widely acknowledged
in the medium-term national planning process and reflected appropriately in several
key national climate policies. The establishment of a far-reaching national plan on
climate mitigation has pushed the sub-national governments to set ambitious targets
that supposedly guide provincial and district governments to carry out low carbon
development plans. Using climate budget tagging as defined by UNDP as a public
expenditure assessment tool, insights from East Kalimantan Province and West Kutai
District were attained. The results of climate budget tagging in the province and one
of its districts consecutively depict that 7% and 47% of budget allocation in 2015
were potentially in support of low carbon development, while in 2016 both allocations in East Kalimantan (24%) and West Kutai (16%) encouraged further discussions on the dynamics of climate mitigation at the sub-national level of governance.
Nonetheless, such seemingly high allocations of the regional government budget
that were earmarked for achieving climate mitigation targets were not equipped with
clear outputs and outcomes that were sensitive to climate mitigation. The findings
also show that there was insufficient local government fiscal space to reinforce the
newly set Indonesia’s NDC target of 29% emission reduction by 2030. In ensuring
that climate mitigation is being integrated into the development agenda, as well as
in promoting transparency, accountability, comparability and consistency in climate
finance, the following policy recommendations are proposed: (1) anticipating and
Z. Z. Mutiara (B) · D. Krishnadianty
WWF Indonesia, Graha Simatupang, Jakarta Selatan 12540, Jakarta, Indonesia
e-mail: zz.mutiara@gmail.com
B. Setiawan
Faculty of Engineering, Sriwijaya University, South Sumatra, Inderalaya 30662, Indonesia
e-mail: budhi.setiawan@unsri.ac.id
J. T. Haryanto
Centre for Climate Change and Multilateral Policy, Fiscal Policy Agency, Ministry of Finance,
Jalan Dr. Wahidin Raya No. 1, Jakarta Pusat 10710, Indonesia
e-mail: djohar78@gmail.com
© Springer Nature Switzerland AG 2021
R. Djalante et al. (eds.), Climate Change Research, Policy and Actions in Indonesia,
Springer Climate, https://doi.org/10.1007/978-3-030-55536-8_13
265