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Z. Z. Mutiara et al.
preparing for the incoming reforms in functions, responsibilities and resources across
levels of sub-national government; (2) clarifying government activities’ indicators,
outputs and outcomes to better suit the climate mitigation targets; and (3) creating
an innovative fiscal transfer financing scheme.
Keywords Climate tagging · Climate finance · Mitigation · Fiscal · NDC
Introduction
Blessed with an abundance of natural resources, Indonesia has been enjoying the
economic growth that relies heavily upon them (Alisjahbana and Yusuf 2004; Resosudarmo 2005a, b). Such enjoyment, however, does not last, and even more critically, it may not be able to fuel the growth and welfare that Indonesia always
envisions. The exploitation of natural resources brings irreversible and perpetual
consequences for the provision of ecosystem services, which are the prerequisites
to support communities’ day-to-day life and business operations (Moreno-Mateos
et al. 2017). Environmental degradation that happens in Indonesia is exacerbated by
climate change that significantly impacts the country’s development (Measy 2010).
Acknowledging that damages to non-sustainable management are permanent, and
the impact of climate change to the economy is real, Indonesia may not be able to
maintain its growth at 7% while achieving a new status of a high-income country, if
it continues doing business-as-usual (MoF 2015). Alternative strategies to anticipate
the above-mentioned possibilities are required.
Government of Indonesia (GoI) recognizes potential vulnerability to climate
change and other environmental pressures in the national medium-term development
plan (RPJMN) 2014–2019 (MoNDP 2014). The plan specifies that “inclusive and
sustainable growth; increasing value added of natural resources with a sustainable
approach; improving quality of the environment; efforts to tackling climate change”
are needed to be done within the 5 years (MoNDP 2014). Post-2020 climate pledge of
GoI to reduce greenhouse gas emissions by 29% by 2030 is also reflected through the
renewal of Presidential Regulation that declares an avid commitment toward climate
mitigation and adaptation (Republic of Indonesia 2016).
Post-Paris Agreement, the challenges faced by countries with plans of contributing
toward curbing the impacts of climate change to meet the shared goal remain in
mobilizing resources and investments (CPI 2017). Any possible public, private and
alternative sources of financing that are utilized to address climate change is referred
to as climate finance. Under the current availability and accessibility of climate
finance, optimizing the efficacy of climate finance to support the plans is crucial
(Nakhooda 2013). This means national and sub-national government should be able
to use its authority and organize relatively small amounts of the finance to bring
about the greatest possible impact in achieving climate targets and plans (Gordon
and Johnson 2017).
Z. Z. Mutiara et al.
preparing for the incoming reforms in functions, responsibilities and resources across
levels of sub-national government; (2) clarifying government activities’ indicators,
outputs and outcomes to better suit the climate mitigation targets; and (3) creating
an innovative fiscal transfer financing scheme.
Keywords Climate tagging · Climate finance · Mitigation · Fiscal · NDC
Introduction
Blessed with an abundance of natural resources, Indonesia has been enjoying the
economic growth that relies heavily upon them (Alisjahbana and Yusuf 2004; Resosudarmo 2005a, b). Such enjoyment, however, does not last, and even more critically, it may not be able to fuel the growth and welfare that Indonesia always
envisions. The exploitation of natural resources brings irreversible and perpetual
consequences for the provision of ecosystem services, which are the prerequisites
to support communities’ day-to-day life and business operations (Moreno-Mateos
et al. 2017). Environmental degradation that happens in Indonesia is exacerbated by
climate change that significantly impacts the country’s development (Measy 2010).
Acknowledging that damages to non-sustainable management are permanent, and
the impact of climate change to the economy is real, Indonesia may not be able to
maintain its growth at 7% while achieving a new status of a high-income country, if
it continues doing business-as-usual (MoF 2015). Alternative strategies to anticipate
the above-mentioned possibilities are required.
Government of Indonesia (GoI) recognizes potential vulnerability to climate
change and other environmental pressures in the national medium-term development
plan (RPJMN) 2014–2019 (MoNDP 2014). The plan specifies that “inclusive and
sustainable growth; increasing value added of natural resources with a sustainable
approach; improving quality of the environment; efforts to tackling climate change”
are needed to be done within the 5 years (MoNDP 2014). Post-2020 climate pledge of
GoI to reduce greenhouse gas emissions by 29% by 2030 is also reflected through the
renewal of Presidential Regulation that declares an avid commitment toward climate
mitigation and adaptation (Republic of Indonesia 2016).
Post-Paris Agreement, the challenges faced by countries with plans of contributing
toward curbing the impacts of climate change to meet the shared goal remain in
mobilizing resources and investments (CPI 2017). Any possible public, private and
alternative sources of financing that are utilized to address climate change is referred
to as climate finance. Under the current availability and accessibility of climate
finance, optimizing the efficacy of climate finance to support the plans is crucial
(Nakhooda 2013). This means national and sub-national government should be able
to use its authority and organize relatively small amounts of the finance to bring
about the greatest possible impact in achieving climate targets and plans (Gordon
and Johnson 2017).