Jakarta, April 14, 2020 – The Ministry of Finance of Indonesia, together with  the United Nations Development Programme (UNDP) launched today the book “Public Finance for Climate Change in Indonesia for Year 2016 – 2018”.

The launch was held virtually and livestreamed online. Over one hundred representatives of various ministries, local governments, universities, the private sector and development partners connected to join.

“Through this book, we hope to convey the Indonesian government’s commitment to addressing the issue  of climate change through budget allocation. For example, the budget was adjusted between 2016 and 2018 to reflect the government’s focus on meeting our targets on reducing greenhouse gas emissions alongside our other priorities such as food security and public infrastructure said Chairman of the Fiscal Policy Agency, Febrio Nathan Kacaribu.

The book presents an analysis of the use of public financing to address climate change in Indonesia between 2016-2018, both in nominal terms  and specific portions of the budget. In 2016, the portion of the budget for climate change activities was 3.5% of the state budget, equivalent to IDR 72.4 trillion. In 2018, the budget for climate change mitigation and adaptation grew to IDR 109.7 trillion or approximately 4.9% of the total government budget. It shows how budget tagging, which has the Government of Indonesia has adopted with UNDP support, allows accurate tracking of all use of public resources that have contributed to reducing greenhouse gas emissions and achieving government targets.

"The book we released today shows how an emerging country like Indonesia can use and track public finance to address climate change. The analysis made and the many examples that our book presents can be of direct value to policy makers and development practitioners in Indonesia and in many countries. UNDP is proud to be the partner of the Ministry of Finance Fiscal Policy Agency to ensure that public finance effectively contributes to fighting climate change and achieving the Sustainable Development Goals (SDGs). ” said Christophe Bahuet, the Resident Representative of UNDP in Indonesia.

Although the budget allocation for climate change is quite large , the book analyzes that 2018 change budget allocation is still only around 25 percent of the estimated needs. In recent years, the Government of Indonesia has attempted to mobilize other funding sources includes funding from private sectors, such as through the establishment of the National Designated Authorities (NDA) to get access of funds from the Green Climate Fund (GCF), the Environmental Fund Management Agency (BPDLH) to  facilitate the fund collection from various sources with more flexible channeling options, as well as adjusting taxation policies. The book underscores the fact that the results of climate budget tagging can be utilized to  mobilize the other public finance mechanisms through the transfer scheme from central to regional, such as special allocation funds, village funds and regional incentive funds among others.. The fund can support government participation at the sub-national level in tackling climate change.

The Director of the Center for Climate Change Finance and Multilateral Policy, Fiscal Policy Agency, Adi Budiarso noted that the book can be a reference in evaluating and formulating policies related to climate change. "We hope that in the future we can jointly formulate climate change policies that are more targeted, measurable and optimal, not only to achieve our targets in accordance with Nationally Determined Contributions (NDCs), but also for a greener Indonesia," he said.

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