Across Indonesia, communities have long responded to environmental challenges through practical, locally driven solutions. Farmers manage forests to sustain both livelihoods and ecosystem. Villages organize waste systems to keep waterways and public spaces clean. Women’s groups turn environmental challenges into economic opportunities for their communities.

While these efforts are often rooted in local needs and traditions, many already contribute directly to climate resilience, environmental protection, and sustainable development. The challenge is not starting climate action from scratch, but ensuring these existing initiatives are recognised, strengthened, and connected to the planning and financing systems that can help them grow over the long term.

Recognising this potential, the Government of Indonesia and UNDP, with support from the UK Government through the Foreign, Commonwealth and Development Office (UK FCDO) initiated the Climate Finance Network (CFN). The programme focuses on strengthening the links b between locally driven initiatives and climate-responsive planning and financing mechanisms, while supporting the institutional conditions needed for community-led solutions to grow and endure.

In the Special Region of Yogyakarta, these dynamics can be seen in different ways. In Gunungkidul Regency, CFN has supported efforts to strengthen planning and institutional coordination around social forestry and local livelihoods. Meanwhile, in Parangtritis Village, an independently developed women-led waste management initiative has emerged as a local example of how community-driven environmental action can generate both social and economic value. The initiative was highlighted through earlier CFN-supported learning and assessment processes as a promising example of locally rooted climate-relevant action.

Gunungkidul: Letting Forests and Futures Grow Together

When CFN began engaging in Gunungkidul in 2024, many climate relevant practices were already well established. What remained  What remained challenging was connecting them into a more integrated system that could support long-term sustainability, stronger market access, and future financing opportunities. CFN’s early support therefore focused on capacity building and facilitation, enabling local actors to see forest-based livelihoods not only as environmental practices, but as part of a broader climate and economic system.

This process led to the development of an Integrated Area Development (IAD) masterplan for social forestry in Gunungkidul. The process brought together farmers, community groups, cooperatives, local government, and technical partners to move beyond fragmented, sectoral planning. Forest management, agroforestry, enterprise development, and market access were treated as interconnected components of a single economic and ecological landscape.

A central institution within this system is Koperasi Wana Manunggal Lestari (KWML), a cooperative that has gradually grown into an important intermediary institution within the local forestry value chain. The cooperative aggregates timber, supports certification processes, and helps connect farmers to markets and financing opportunities. In doing so, it strengthens farmers’ bargaining position and reduces dependence on informal supply chains that often limit economic returns. The IAD, piloted in KWML, was intended as a blueprint to scale up the cooperatives business flow.

“This programme is intended to strengthen social forestry enterprises. The next step is to consolidate programmes and partnerships within an Integrated Area Development framework that can support sustainable livelihoods and resilience,” said Puji Raharjo, production manager of KWML. 

The IAD masterplan also addressed long‑standing challenges in the forestry value chain, including harvesting systems, processing capacity, aggregation mechanism and market access. Strengthening KWML’s role as an incubator and aggregator was identified as critical to preparing the landscape for future blended finance opportunities involving public funds, revolving loan schemes, and responsible private sector engagement.

Parangtritis: Turning Waste into Opportunity

Several hours south of Gunungkidul, along Yogyakarta’s coastline, Parangtritis faces a different environmental challenge. As a major tourism destination, the area supports many local livelihoods, but it also generates large volumes of plastic waste that accumulate along beaches, rivers, and waterways. Over time, managing this waste has relied heavily on community‑levcommunity level particularly in the absence of sufficient formal services.

In response, a women-led group emerged to introduce a new approach to waste management. With support from the Office of Women’s Empowerment, Child Protection, and Population Control of the Special Region of Yogyakarta’s Desa Prima initiative, the Mutiara Selatan (Southern Pearl) women’s group adopted a circular waste management model that links climate and environmental protection with local livelihoods.

“Desa Prima is designed based on assessments conducted in each locality. It follows a bottom‑up approach, where communities identify the challenges, they face and the potential solutions to address them. This approach has contributed to increased economic productivity and strengthened women’s empowerment,” said Mala from the Office of Women’s Empowerment, Child Protection, and Population Control of the Special Region of Yogyakarta.

Some innovations emerged directly from community observations. Plastic waste shredding, for example, was proposed by local residents after recognizing that unmanaged plastic waste represented not only an environmental burden, but also a potential economic resource. The all‑women group now locally manages the waste bank and operates an Integrated Waste Processing Facility (Reduce, Reuse, Recycle / TPST 3R).

Through earlier assessments and field learning processes, CFN identified the initiative as a useful example of how locally led environmental action can simultaneously address waste management, livelihoods, and community participation.

The experience has helped inform broader discussions on how community-level initiatives could eventually be better connected to climate-responsive planning and financing systems without undermining the local ownership that sustains them.

Bridging Local Action and Climate Finance 

At the provincial level, stakeholders recognise that many climate-relevant initiatives already exist across villages and communities but are often not formally identified within climate planning and budgeting systems. 

“Many environmentally friendly initiatives already exist at the village level, but they are often not identified or recorded as climate action due to limited technical capacity,” said Ni Made Dwipanti Indrayanti, Provincial Secretary of the Special Region of Yogyakarta.  

Gunungkidul and Parangtritis sit at different points along the same pathway. In Gunungkidul, stronger planning frameworks and institutional coordination are helping prepare local forestry systems for future financing opportunities. In Parangtritis, community leadership and women-led innovation reveal how grassroots initiatives can become the foundation for more sustainable environmental and economic systems.

Across both contexts, CFN demonstrates that climate finance is not only about funding, but about strengthening the systems, institutions, and community initiatives that allow local solutions to grow sustainably. The experiences from Yogyakarta show that when climate action is rooted in local realities, it can create lasting benefits for both people and planet (*).

Written by : Garnadipa Gilang, Thomas Benmetan 
Edited by: Nabilla Rahmani