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Z. Z. Mutiara et al.
coordinate with, is beneficial for sub-national governments to adapt faster to changes
in circumstances (Oliveira 2009) and to interact with constituencies on the ground.
Introducing Innovative Fiscal Transfer at the Provincial Level
Despite the incoming reform of land governance at the sub-national level, protecting
natural resources and mitigating climate change shall be kept unambiguous to achieve
climate targets. Bringing benefits of natural resource protection and climate mitigation on the ground requires financing and incentives. To ensure a successful mainstreaming effort for climate targets from provincial to district level, an incentive for
district governments becomes a far-reaching instrument. An indicator-based incentive that rewards district governments for their performance within the context of
climate mitigation through a fiscal transfer vehicle can become an option.
Putting in place mechanisms in which district governments can benefit financially from climate mitigation and prevention of further land conversion for shortterm benefit is needed. The effectiveness of financing in generating climate mitigation outcomes will ultimately depend on the broader political economy of land-use
change. One of the major steps leading to that will be to assist local governments
in understanding the value of their natural capital. Through this, they will have an
understanding or comparison of the potential opportunity cost of when they preserve
their natural resources—and of when they merely exploit and extract these resources.
This will encourage proper debate and discussions at a policy level that will result in
knowledge-based decision-making processes in local governments. This will counter
current thinking that income from natural resources relies solely on how much is
being extracted instead of how much is being managed and preserved (Nurfatriani
2015). A facility that rewards district government for their efforts to drive low carbon
development is the first step to compensate for thinking that climate mitigation is an
expenditure, not an investment.
Conclusion
The exercises that were conducted together with the local staff in both East Kalimantan Province and West Kutai District depict the sub-national dynamic of climate
governance, and in a broader sense of natural resources management and environmental protection, in Indonesia. Yet, the seemingly high budget allocation in the
province (7% in 2015; 24% in 2016) and the district (47% in 2015; 16% in 2016) is
not accompanied with climate impacts and benefits. Learning from the case studies,
sub-national development agendas have mainly been around overcoming poverty.
While doing the poverty alleviation, development agendas should pay attention to
the potential climate benefits they can bring on the table. While performing such
economic advancement, it is also necessary to comprehend that greening the effort
Z. Z. Mutiara et al.
coordinate with, is beneficial for sub-national governments to adapt faster to changes
in circumstances (Oliveira 2009) and to interact with constituencies on the ground.
Introducing Innovative Fiscal Transfer at the Provincial Level
Despite the incoming reform of land governance at the sub-national level, protecting
natural resources and mitigating climate change shall be kept unambiguous to achieve
climate targets. Bringing benefits of natural resource protection and climate mitigation on the ground requires financing and incentives. To ensure a successful mainstreaming effort for climate targets from provincial to district level, an incentive for
district governments becomes a far-reaching instrument. An indicator-based incentive that rewards district governments for their performance within the context of
climate mitigation through a fiscal transfer vehicle can become an option.
Putting in place mechanisms in which district governments can benefit financially from climate mitigation and prevention of further land conversion for shortterm benefit is needed. The effectiveness of financing in generating climate mitigation outcomes will ultimately depend on the broader political economy of land-use
change. One of the major steps leading to that will be to assist local governments
in understanding the value of their natural capital. Through this, they will have an
understanding or comparison of the potential opportunity cost of when they preserve
their natural resources—and of when they merely exploit and extract these resources.
This will encourage proper debate and discussions at a policy level that will result in
knowledge-based decision-making processes in local governments. This will counter
current thinking that income from natural resources relies solely on how much is
being extracted instead of how much is being managed and preserved (Nurfatriani
2015). A facility that rewards district government for their efforts to drive low carbon
development is the first step to compensate for thinking that climate mitigation is an
expenditure, not an investment.
Conclusion
The exercises that were conducted together with the local staff in both East Kalimantan Province and West Kutai District depict the sub-national dynamic of climate
governance, and in a broader sense of natural resources management and environmental protection, in Indonesia. Yet, the seemingly high budget allocation in the
province (7% in 2015; 24% in 2016) and the district (47% in 2015; 16% in 2016) is
not accompanied with climate impacts and benefits. Learning from the case studies,
sub-national development agendas have mainly been around overcoming poverty.
While doing the poverty alleviation, development agendas should pay attention to
the potential climate benefits they can bring on the table. While performing such
economic advancement, it is also necessary to comprehend that greening the effort