NATIONAL DEVELOPMENT PLANNING

TOWARD GREEN ECONOMY; POLICY INITIATIVES

Presented at The National Training Session – LEAD Associate Training Cohort

“Green Economy: Exploring Path to Vibrant Future” Jakarta, 24 May 2011

OUTLINE

1. Overview

2. Green Economy Concept in Indonesia

3. Current Indonesia’s Policy Context

4. Sustainable Development Perspective in the

National Development Planning

5. Further Actions

1. OVERVIEW

1. Green Economy: Linkage between economic growth, social, and environmental sustainability

long-term goals (environmental sound economy)

2. Development of economic activities + rationality of natural resources utilization

preventing of natural resources scarcity

reducing emission and environmental degradation

Change of Paradigm and Behaviour

Definition

Indonesia is of the view that Green Economy is a development paradigm that based on resources efficiency approach with strong emphasizes on :

internalizing cost of natural resources depletion and environmental degradation,

efforts on alleviate the poverty ,

creating decent jobs, and

ensuring sustainable economic growth.

Understanding that economy is one of the three pillars of sustainable development, green economy as a concept, ought to be valued as an integrated and holistic concept, and therefore should not be undervalue or limit into narrow objective

(Delri, UNEP 11th GC SS, Februari 2010)

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Challenges

Unsustain

development

• Due largely to a narow perspective of development reducing the carrying capacity and the natural resource availability

• The root of the problem : Anthropocentric economic growth

• Biodiversity threat • Excessive exploitation of land and marine

resources • Environmental pollution and degradation • Unmanaged growth of population • Scarcity of water, food and energy • The climate change and global warming

Implications

Why Green Economy?

Why Green

Economy?

Development Benefits: Greater energy efficiency, energy security, competitiveness,

new job/technology/inve

stment opportunities,

revenues from GHG emissions reductions. Fiscal/Budgetary

Benefits: Reducing wasteful/non green

spending will free up resources for

priority development needs: investment, job creation, quality

of life

Co-Benefits/Quality of Life: Cleaner air,

enhanced public health, reduced

congestion, better waste management, lower health costs,

more productive workers/families

Reduced Economic Burden: Policy

distortions and poor governance burden

the budget and economy, impeding

investment, international

competitiveness and market access

Opportunity

Cost/Opportunity

Lost: biodiversity or

ecosystem services

as basis for new

businesses, tourism

potential

New Way of Development Perspective *

Source : Green Economics, Molly Scott Cato, 2009

Widening the Consideration of Economics beyond the Classical Economists ‘Circular Flow’

*Internalizing Externalities in the Consumption and Production Processes*

2. GREEN ECONOMY CONCEPT IN INDONESIA

Sustainability principal internalization in the daily activities:

1. Environmental friendly behavior

2. Environmental utilization equal with carrying capacity

3. Ecological balances consideration

Minimal impact to the ecology and

environment

Natural Resources and Environmental Utilization

Sosio-economic growth equal to carrying capacity

and environmental friendly

Shifting Behaviour & Key Features

1. Agriculture

2. Building

3. City

4. Energy

5. Fisheries

6. Forestry

7. Manufacture

8. Tourism

9. Transportation

10. Waste

11. Water

1. Reconfiguring businesses and infrastructure to deliver better returns on natural, human and economic capital investments,

2. Reducing GHG emissions renewable energy, low carbon transport, forest management, etc;

3. Extracting and using less natural resources;

4. Creating less waste & improving waste management;

5. Reducing social disparities; and

6. Preserving or restoring the quality of the environment energy efficient buildings, clean technology, improve freshwater provision, sustainable agriculture, sustainable fisheries, etc

Transition Process Green

Jobs

Transition Process

1. Awareness and understanding

2. Assessment:

a) Current condition and improvement needed (each sector)

b) Baseline of each sector

c) Improvement – monev

d) Short-term trade-off

e) Insentive and disinsentive to support shifting behaviour

f) Transformation from “transition process” to “established condition”

3. Application of priority (sectoral & regional) step by step need commitment and policy consistency

1. Key focal point for delivering water, sanitation and roads

2. Improving spatial plans, local transport options

3. Assessing and addressing local environmental priorities

4. Enforcing rules, reinforcing national policy messages

5. Preparing for future challenges: Addressing climate

change adaptation needs

6. Identifying and targeting vulnerable populations

Local Governments and Cities: Essential Partners for Green Economy

3. CURRENT INDONESIA’S POLICY CONTEXT

A. Longterm Development Plan RPJP 2005-2025

B. Mid Development Plan (RPJMN) & Annual Work Plan (RKP) • Mainstreaming Sustainable Development Concept • Cross-Sectoral Policy on Climate Change

Steps of Transition Process

C.RAN-GRK • Forest and peatland Management • Agriculture management • Energy efficiency, promoting Renewable energy (power and transportation) • Industry • Waste management

Vision: Indonesia that self-confidence, onward, just and wealthy

A. Long Term National Development Planning (RPJP) 2005-2020

Missions :

1. Realizing a society that has high morals, ethics, culture,and civilization, based on the Pancasila

2. Realizing a nation that is competitive

3. Realizing a democratic society based on the rule of law

4. Achieving Indonesia safe, peaceful and united

5. Realizing development that is equitable and Just

6. Realizing an Indonesia that is balanced and sustainable

7. Realizing an Indonesia as an archipelago nation that is selfreliant, advanced, strong, and that is based onthe national interest

8. Realizing an Indonesia that has an important role in the international community

• Government Regulation No.32/2009 Protection and Environmental Management;

• MoAg ISPO, sustainable agricultural development; • MoPW Green Infrastructure; • MoFr Sustainable Forest Management; • MoE, MoHA, Bappenas SEA

Improve the management of development maintain the balance among the utilization, sustainability,

availability, and uses of natural resources and environment

• Gov Reg. No.03/2008 Forest & Forest Management Plan & Forest Utilization

• MoEv Economic Instrument,incetive system of environmental financing, Green GDP, Develop the guidance & application of economic valuation of Natural Resources & Environment & Environmental Impact;

• BNI & Bank Mandiri Green Banking; • Bapepam-LK Green Investment

Increases the economic use of natural resources and the environment in a

sustainable manner

• Bappenas ICCSR, ICCTF, RAN-GRK; • MoE Implementation B3 management, waster water

investment program; • MoEMR Development of Renewable Energy

Improves the management of natural resources and the environment for

supporting the quality of life

• Strategic Plan 2010-2014 of MoFr

• MoT Green Transportation; • MoEMR Energy Efficient Equipment Labeling

Provides beauty and comfort of life, and increases the preservation and

utilization of biodiversity as the basic asset of national development

Mission No. 6 : Realizing an Indonesia that is balanced

and sustainable

Goals National/Sector Policy & Existing Initiative

B. National Priority on Midterm National Development Plan (RPJMN) 2010-2014

Sustainable development policy through internalization and integration 3 main pillars: economy, social and environment and Improving Carrying Capacity to support the achievement of economic growth, improvement of job opportunities and poverty reduction

• Pro-growth

• Pro-job

• Pro-poor

• Pro-environment

Four Track

Strategy

National Priority 1 Reformasi Birokrasi dan Tata Kelola

2 Pendidikan

3 Kesehatan

4 Penanggulangan Kemiskinan

5

6 Infrastruktur

7 Iklim Investasi dan Iklim Usaha

8 Energi

9 Lingkungan Hidup dan Pengelolaan Bencana

10 Daerah Tertinggal, Terdepan, Terluar, & Pasca-konflik

11 Kebudayaan, Kreativitas dan Inovasi Teknologi

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13

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Ketahanan Pangan Bidang Politik, Hukum dan Keamanan

Bidang Kesejahteraan Rakyat

Bidang Perekonomian

Mainstreaming Sustainable Development Concept in the RPJMN

Mainstreaming on Sustainable Development

ENVIRONMENTAL ASPECT • Improvement on land and water resource capacity • Improvement on Air Quality

SOCIAL ASPECT • Preserving structure and social values • Improvement on community participation

ECONOMIC ASPECT • Economic growth, poverty reduction and social disparities

EXISTING INITIATIVES : 1. Strategic Environmental Assessment (KLHS) 2. Strategy on Poverty Reduction 3. Sustainable Forest Management 4. Sustainable Agriculture 5. Responsible and Sustainable Fisheries

EXISTING INITIATIVES : 1. The Indonesian Climate Change Sectoral Roadmap (ICCSR) support the

GOI’s development vision related to climate change for the next 20 years 2. Development of Financial Mechanism to Support Climate Change

Initiatives (ICCTF) 3. Support GHG emission reduction through development of National Action

Plan (RAN-GRK) –Government Regulation

Cross Sectoral Policy

On Climate Change in the RPJMN

Cross sectoral policy on

Climate Change

Mitigation: Forestry, Peatland, Energy including transportation, industry, and waste management

Adaptation: Agriculture, Marine and fisheries, Coastal, Infrastructure, and Health

Supporting: Data, Information and communication, institutional capacity, research and technologi

1. To sharpen the CO2 emission inventory and emission target

reduction will be adjusted in 2015

2. To strengthen institutional capacity for anticipating the impact and

achieving the target of national climate-proofing policies and

regulation in 2020

3. To make RAN-GRK as a guidance for GHG emission reduction, for BAU

or international support

4. To achieve the successful implementation of climate change

mitigation and adaptation in 2025

5. To reduce the real risk of climate change negative impact to

development in 2030 by: (1) awareness raising; (2) local society

capacity building; (3) knowledge management improvement; and (4)

implementation of adaptive technology.

6. To ensure that all sectors support the emission reduction, adopt the

low carbon development strategy, and implement it based on

sustainable development.

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Reducing Emission : Key Issues to Achieve Green Economy

C. Using RAN-GRK target as a Sectoral Targets to Reduce GHG Emission

Sectors Reduction Target (Gton CO2e)

26% 41%

Forestry and Peat

Land

0,672 1,039

Agriculture 0,008 0,011

Energy and

Transportation

0,036 0,056

Industry 0,001 0,005

Waste 0,048 0,078

TOTAL 0,767 1,189

4. SUSTAINABLE DEVELOPMENT PERSPECTIVES IN

THE NATIONAL DEVELOPMENT PLANNING

Sustainable Development: is development process that principally to meet current needs without compromising the needs of future generations .

To achieve sustainable development integration of 3 pillars: social, economy, and environmental aspects.

Environment

Economy

Social-Society

-Measurement

- Internalization

- Basic Needs

- Equity between generations

-Governance/Culture

-Equity between generations

• Growth

• Efficiency, Stability

• Biodiversity

• Pollution, preservation,

• etc.

• Poverty, Unemployment

• Empowerment, institutional

Sustainable Development Perspectives in RPJMN 2010-2014

Target

• Adopted the integrated economic, social and environmental consideration in planning and development implementation in all sectors and regions;

• Conserved the environmental quality with indicator: better environmental quality index in 5 (five) years ahead;

• Agreed, developed and applied the environmental quality index as an instrument to measure the sustainable development

Criteria

• Integral efforts in sectoral and regional development ; • Without further indication for significant funding addition; • Social and society consideration; • Environmental carrying capacity consideration in planning and

development implementation; and • Mainstream to all sectors and regional, with prioritizing to strategic actions

of carrying capacity conservation and justice and sustainable social

Indicator

• Level of land and water conservation in development activity environmental quality index

• Level of development society participation, marjinal/minority society participation (poor and women), society social structure, and social value that applied in society.

• Level of resources utilization for development

5. FURTHER ACTIONS

1. Continue to integrate related policy framework for promoting

green economy development and identify financing needs and

mechanism to mainstream the new approach.

2. Apply sustainable development approach in development

planning mechanism

3. Integrate related policy framework for promoting green economy

in sectoral development policy both at macro and micro level

4. Highlights from recent quantitative studies of the impact of ‘green

economy’ for Indonesia with emphasis on instruments (climate

change related)

5. Mainstreaming ‘green economy’ through extended macro

economic indicator.

Continue….

6. Shifting strategy toward green economy ?

a. Low carbon track: De-carbonizing energy and manufacturing

sectors.

b. Ecosystem service tracks: valuing nature’s environmental

services

c. Accelerate bio-based economic development e.g. utilizing bio-

resources preferably unique or endemic to Indonesia for such

initiatives

d. Full all resources e.g. government, research institutes and

Univeristy, private company, community in bio-based

economy initiatives

e. Direct intervention of the government in implementing bio-

base economy (infrastructure for ecotourism industry,

agrobiodiversity, bioprospecting and its use in pharmaceutical

Industry, air and water management)

Thank You