Update on Indonesia Climate Change Policy Development

Dr. MedrilzamDirector for Environment Affairs

Ministry of National Development Planning/ National Development Planning Agency (BAPPENAS)

Presented at the Workshop of Joint Crediting Mechanism

Accelerating Private Sector Participation towards Low Carbon Development in Indonesia

Jakarta, 30 November 2016

Principles for Climate Change Policy in Indonesia:

Article 3.4 of UNFCCC‘policies and measures to protect the climate system against human-induced … should be integrated with national development program…’

Article 4.7 of UNFCCC‘The extent to which developing country Parties will effectively implement their commitments under the Convention will depend on the effective implementation by developed country Parties of their commitments under the Convention related to financial resources and transfer of technology and will take fully into account that economic and social development and poverty eradication are the first and overriding priorities of the developing country Parties.’

Article 2 Paris AgreementThis Agreement, in enhancing the implementation of the Convention, including its objective, aims to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty.

Addressing Economy-Poverty-Emission Nexus and mainstreaming the Nexus into Development Plan

Logical Framework of Climate Change Policy Exercise in Indonesia:

PopulationWaste

Industry Economy

Land Use

Transportation

Energy

POVERTY ECONOMY

CO2Emission

TRADE OFFS

Focus for NDC Partnership:develop and implement sustainable development policies aiming toward strengthening economy, reducing poverty and GHG emission

Development Policies ?

Mainstreaming (i)NDC into Development Policy Agenda

National Mid TermDevelopment Plan

Annual Work Plan

BudgetAligment between Climate and Development Agendas with long term emissions mitigation and adaptation impact

(I)NDC

• Indonesia Ratify Paris Agreement (Law No.16/2016)

• No. 103 among UNFCCC parties• Plan to prepare investment strategy

for 2020-2030.• Prepare database for (i)NDC• Improving (i)NDC regularly• Prepare the Presidential Regulation

for Low Emission Development Strategy and SDGs

• Input for Indonesia Vision 2045

0

500000

1000000

1500000

2000000

2500000

3000000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Emission Baseline Indonesia : 2000-2030(in ton CO2e)

Energi dan transportasi IPPU Limbah AFOLU (no peat) Peat Dekomposisi Peat Fire

Note: Coal as the main energy source (RUEN, 2015) will shift the emission source from land to energy sector

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

1995 2000 2005 2010 2015 2020 2025 2030 2035

Total Emisi GRKdalam ribu ton CO2e

Baseline BAU Total Emisi Baseline Total Emisi Skenario Fair

Skenario Fair: Reduksi Emisi sebesar 832 Mton CO2e atau setara 29 % dari BAU pada 2030

Skenario Ambisius: Reduksi Emisisebesar 1,19 Giga ton ton CO2e

atau setara 41 % dari BAU pada 2030

EmissionReductionTarget by

2020

Indonesia Low Emission Development PRE-2020

Sector

Emission Reduction Target(Gton CO2e) by 2020

26 % 41 %

Land Based Sector (Forestry, peatlandand agriculture)

0.680 1.050

Energy Based Sector 0.036 0.056

IPPU 0.001 0.005

Waste Management Sector 0.048 0.078

Economic DevelopmentTarget +

7%

- 26/41% Reduction of GHGClimate Change Objective

Presidential Regulation No. 61/2011 on GHG Emission

Reduction Action Plan

EconomicGrowth

LED

Beban Penurunan Emisi Tiap Sektor di 2030

Skenario Fair di 2030 Skenario Ambisius di 2030

Jumlah (Mton CO2e) % Jumlah (Mton CO2e) %

Baseline 2.881 - 2.881 -

Penurunan Emisi:

Hutan, Pertanian dan Gambut 545 19% 666 23.1%Energi 253 8.8% 472 16.4%IPPU 3 0.1% 6 0.2%Waste 31 1.1% 48 1.7%

Total Penurunan emisi 832 29% 1,192 41%

Berdasarkan 3 skenario kebijakan, hasil simulasi menunjukkan bahwa upaya penurunan emisi GRK tetap bertumpu pada sektorlahan mengingat pertimbangan kemudahan, biaya yang rendah tanpa memerlukan penguasaan teknologi canggih. Di sisi lainnya, masih terdapat delay dalam hal penguasaan teknologi mitigasi dan EBT di sektor energi sehingga belum dapat mengimbangikebutuhan penurunan emisi dan energi yang ada.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1995 2000 2005 2010 2015 2020 2025 2030 2035

Emisi per Kapita (dalam ton CO2/cap)

Emisi per Kapita BAU Emisi Per Kapita Skenario Fair Emisi Per Kapita Skenario Ambisius

-

100

200

300

400

500

600

700

800

900

1,000

1995 2000 2005 2010 2015 2020 2025 2030 2035

Emisi per PDB (dalam ton CO2/ Miliar Rupiah)

Emisi per PDB BAU Emisi per PDB Skenario Fair Emisi per PDB Skenario Ambisius

Hasil Simulasi (2010-2030)

11

• Kurva 1 Skenario Baseline• Kurva 2 skenario Fair INDC• Kurva 3 Skenario Fair INDC +

Kebijakan Harga• Kurva 4 Skenario Fair INDC +

Kebijakan Upah• Kurva 5 Skenario Fair INDC +

Kebijakan Distribusi Pendapatan

Kurva 3,4,dan 5 ditujukan untuk mengatasi dampak dari kebijakan INDC Fair (kurva 2) pada indikator kemiskinan

Tampak bahwa masing-masing skenario memberikan dampak untuk mengatasi proyeksi kemiskinan pada kondisi Fair (Kurva biru), tampak bahwa pada kebijakan upah dampak penurunan kemiskinan lebih signifikan dibandingkan pada skenario kebijakan distribusi pendapatan dan harga.

Level of National Poverty

2,000 2,002 2,004 2,006 2,008 2,010 2,012 2,014 2,016 2,018 2,020 2,022 2,024 2,026 2,028 2,030

0.00

0.05

0.10

0.15

*Level of National Poverty Level of National Poverty

Level of National Poverty Fair mix Wage Level of National Poverty Fair mix ID

Level of National Poverty Baseline

Number of National Poor People

2,000 2,002 2,004 2,006 2,008 2,010 2,012 2,014 2,016 2,018 2,020 2,022 2,024 2,026 2,028 2,030

0

10,000,000

20,000,000

30,000,000

40,000,000

person

*National poor people National poor people

Number of national poor people baseline Number of national poor Fair mix Wage

Number of national poor Fair mix ID

Hasil Simulasi (2010-2030)

12

• Kurva 1 Skenario Baseline• Kurva 2 skenario Fair INDC• Kurva 3 Skenario Fair INDC +

Kebijakan Harga• Kurva 4 Skenario Fair INDC +

Kebijakan Upah• Kurva 5 Skenario Fair INDC +

Kebijakan Distribusi Pendapatan

Pada indikator Laju Pertumbuhan Ekonomi dan Emisi, pada variasi skenario Fair tidak memberikan banyak perbedaan.

Pada indikator LPE, range pertumbuhan ekonomi pada akhir tahun simulasi berada pada kisaran 5-6% per tahun dari berbagai variasi skenario. Namun yang terbaik adalah skenario Fair INDC + upah, diikuti skenario fair INDC upah dan Skenario baseline

Sementara untuk hasil emisi, besaran emisi skenario Fair dengan berbagai variasinya tidak memiliki perbedaan yang signifikan. Penurunan berada pada besaran 29%

2,000 2,002 2,004 2,006 2,008 2,010 2,012 2,014 2,016 2,018 2,020 2,022 2,024 2,026 2,028 2,0300.00

0.01

0.02

0.03

0.04

0.05

0.06

per year

*GROWTH PDB GROWTH PDB Growth PDB Baseline Growth PDB Fair mix Wage Growth PDB Fair mix ID

Pertumbuhan PDB

2,000 2,005 2,010 2,015 2,020 2,025 2,030

1,500,000

2,000,000

2,500,000

3,000,000

CO2*Gg/year

*TOTAL EMISSIONS

Emission Fair mix Wage

TOTAL EMISSIONS

Baseline Emission2

Emission Fair mix ID

Drivers to Achieve Low Emission Development Objectives:

• Innovation and Technology

• Human Productivity

• Shifting from resource/extraction based industry to service based Industry

• Enhancing private sector involvement and foreign direct investment

Thank You