Indonesia's Carbon Emission Cuts Will be Funded Domestically, SBY Says

Camelia Pasandaran & Fidelis E Satriastanti, Jakarta Globe 28 Apr 10;

Indonesia is not dependent on outside aid to realize its carbon emission reduction target of 26 percent, President Susilo Bambang Yudhoyono said on Tuesday, amid warnings the initiative could mire the country in more debt.

“The budget to reduce our emissions will come from Indonesia,” Yudhoyono said at a press conference with visiting Finnish Prime Minister Matti Vanhanen at the presidential palace. “We have allocated funds for it from the state budget. However, if there is any international aid in the form of capacity building, technical training, grants or others, we will accept it.”

Indonesia has committed to the ambitious target by 2020, mostly from the forestry sector and through the development of renewable energy. Sulistyowati, assistant deputy for climate change impact control, has previously said that at least Rp 83 trillion ($8.88 billion) would be needed to finance efforts to reach the target.

One of the programs is to eradicate illegal logging and corruption in illegal logging cases.

“We’ve formed a joint team consisting of the police, the Attorney General’s Office, the Corruption Eradication Commission, the Forestry Ministry and the Judicial Mafia Eradication Task Force [to tackle the issue],” Forestry Minister Zulkifli Hasan said.

Other countries have already offered help in the form of capacity building, technical training and technology transfer, while Japan has offered a $425 million loan for climate change mitigation efforts, signed during the Bali Democracy Forum in December.

At last week’s Earth Day discussion, Bank Information Center project coordinator Nadia Hadad warned the government against signing bilateral agreements with multilateral agencies, such as the World Bank or the Asian Development Bank, saying they would mire the country in more debt.

“Almost all funding to tackle climate change lies in mitigation rather than adaptation efforts,” she said. “However, the main focus of attention here is the funding mechanisms dominated by parties outside the UN Framework Convention on Climate Change.”

The UNFCCC has appointed the Global Environmental Facility as an operating agency to manage the Least Developed Countries Fund to help some of the world’s most vulnerable countries combat the adverse effects of climate change. Another source of funds is the Special Climate Change Fund, established in 2001 under the UNFCCC to finance projects that adapt systems to be more environmentally friendly.

There is also the Adaptation Fund, established by the Kyoto Protocol to finance adaptation projects in developing countries. These can include drought contingencies or shoreline management to fend off rising sea levels.

Meanwhile, multilateral agencies like the World Bank, Nadia said, had also set up their own mechanisms. “There are plenty of initiatives,” she said. “But unfortunately it’s not clear what all that funding is for.”