Indonesian Local Government’s Participation to Achieve National Climate Target
November 6, 2023
Socialization of RCBT mechanism in Surabaya City
In its commitment to tackling climate change, the Indonesian government has undertaken significant efforts to ensure the realization of the climate targets outlined in the Enhanced Nationally Determined Contribution (ENDC), which includes unconditional emission reductions of 31.89% and conditional reductions of 43.20%. One is through mainstreaming climate change issues within the national planning and budgeting at central and regional governments to effectively ensure a greener utilization of public finance.
Since 2016, the Ministry of Finance, through the Center for Climate Change Financing and Multilateral Policy, with support from the United Nations Development Programme (UNDP), has developed Climate Budget Tagging at the national level to identify, track, and monitor climate mitigation and adaptation related programs and expenditure within Indonesia’s national state budgets (APBN). From 2019 – 2021, Indonesia’s climate change budget allocation reached IDR 286,86 trillion or averaged to IDR 93,57 trillion/year (MoF, 2022). In addition, by using the results of climate budget tagging analysis, the government can create innovative financing instruments, such as green sukuk, blue bonds, etc., as an alternative funding source to finance/re-finance green projects in Indonesia.
Initial Discussion with 12 Regional Agencies for preparation of RCBT Piloting
In 2020, the program continued to expand from national to regional governments through the piloting of Regional Climate Budget Tagging (RCBT), which to date has been piloted in 22 regions across Indonesia, spanning multiple provinces, cities, and districts. RCBT results have helped to identify local government’s efforts in achieving national climate targets, which in turn aids in the analysis of strengths and opportunities that are environmentally sound for further sustainable growth in the regions. RCBT results have proven the importance of local government involvement and active participation in assembling a holistic, accountable, and transparent public climate finance management system for achieving national climate targets and growth.
To align with the goal of establishing an integrated and holistic public climate finance management system, local governments can actively employ RCBT results to generate reports for submission to national climate planning and database systems, such as Sistem Registrasi Nasional (SRN), Sistem Inventory GRK Nasional-Sederhana Mudah Akurat Ringkas dan Transparan (SIGN-SMART), under the Ministry of Environment and Forestry, and Aplikasi Perencanaan-Pemantauan Aksi Rendah Karbon Nasional (AKSARA) under the Ministry of National Development Planning/Bappenas. This approach ensures continuous tracking of the contributions of local government in supporting and accomplishing the 2030 emission targets.
RCBT Training in South Sulawesi
RCBT Training in West Nusa Tenggara
Throughout the years, RCBT findings have alluded to the domination of adaptation activities within tagged climate budgets. In recent piloting areas, such as South Sulawesi and West Nusa Tenggara, the adaptation activities comprised more than 80% of total climate-related activities. In South Sulawesi alone, estimates suggest that 88% of the climate budget is allocated for climate adaptation. According to 2023 data, the Department of Food Crops, Horticulture, and Plantations stands out as a prominent contributor to climate adaptation budgets within the province, with three key activities such as: managing agricultural infrastructure, overseeing plant seed quality and distribution, and supervising circulating agricultural facilities. The trend is also similarly found in 2022 pilot areas (Bali, Jambi, and Bangka Belitung), where the combined allocated climate adaptation budget reached 60%. Among these 3 provinces, Jambi leads in climate adaptation activities, where adaptation accounted for 80% of the total climate-related efforts. Findings also highlight the dominance of water sector activities in the province’s climate adaptation budget, encompassing initiatives such as developing drinking water infrastructure and rehabilitating irrigation systems.
At the regional level, climate change adaptation activities cover infrastructure development supporting basic services such as water, food resources, and agriculture. Indonesia’s landscape is prone to climate risks and disasters. Thus, increasing budget allocation for mitigation or developing innovative financing at the sub-national level could improve mitigation efforts and balance climate activities for continuous economic growth and climate resilience.
RCBT Workshop in East Java Province
Through its implementation, RCBT analysis has become a valuable tool for local government in collecting insight and evaluation for future climate planning and budgeting. RCBT results can also become gateways to develop alternative financing schemes, which can be mobilized to support strategic issues within the respective regions, such as through green municipal bonds and encouraging more investment opportunities through public-private financing endeavors tailored to regional needs.
Nevertheless, room for improvement and untapped potential remain in strengthening the RCBT system. A few promising aspects for growth are the implementation of a nationwide automated tagging process, which would significantly increase the efficiency and effectiveness of the current manual RCBT system, as well as the deepening of RCBT data analysis through the integration of emission reduction impact. These improvements can provide a more comprehensive impact analysis of climate activities at the subnational level and map each region's contribution to achieving national climate targets. In the continuous work to achieve the 2030 goals, tools such as the RCBT have helped provide a more vivid picture that, in the long haul, guides our collective efforts in charting the path towards a more sustainable and just future.
Written by: Kezia Uli Simanjuntak & Swari Mufida
Editor: Debi Nathalia