2016-03-02

Indonesia needs fiscal system resilient to impact of climate change, leading conservation group warns


JAKARTA (foresthints.news) - The CEO of WWF-Indonesia, Efransjah, is of the view that Indonesia needs a fiscal system that is aligned with its efforts at adapting to and mitigating the effects of climate change.

Such a fiscal system is of great importance to Indonesia, considering that the archipelago is one of the countries most vulnerable to the effects of climate change. This means it is essential for Indonesia to anticipate all possibilities arising from the impact of climate change, in part by adopting a fiscal system that can stand the shocks associated with such change.

It has already been shown that the impact of climate change can cause a correction in a number of fiscal targets, including those in Indonesia. This should be prepared for more effectively by establishing a fiscal system that is resilient to the effects of climate change, Efransjah told foresthints.news on Thursday (Feb 25) in Jakarta.

He went on to say that a fiscal system of this resilient nature needs to be developed using all the strength of domestic resources and with clear measures, from the local to the national level, and could also be supplemented by international support through various climate fund schemes, on both a bilateral and multilateral basis.

The issue of climate change touches on our very survival as a nation. This really needs to be emphasized, Efransjah urged.

He explained that various sectors of the Indonesian economy which make an important contribution to economic growth are inextricably tied to the effects of climate change, including upstream and downstream industries and especially land and forestry-based businesses.

Tax targets, for example. The impact of climate change can affect the achievement of these targets, which is serious as the revenue derived from taxes plays an important role in the composition of the Indonesian state budget. A situation like this could have a negative impact on public investment. This is a matter of great concern which requires urgent attention, Efransjah continued.

If a fiscal system that is tough and resilient in addressing climate change fails to get established in Indonesia, Efransjah is convinced that this will result in the Indonesian government having to bear even greater costs down the line, and ultimately these costs will become the collective burden of all Indonesian people.

To reinforce the fiscal system so that it becomes more responsive to climate change, the Indonesian government could just hope that numerous climate funds will be channeled in by developed countries as part of their commitment to support climate change adaptation and mitigation efforts in emerging countries like Indonesia. However, the mobilization of domestic resources should also be prioritized, he added.

Efransjah stressed that these domestic resources are something real which is in the control of Indonesia and the government has the power to harness them for developing and strengthening a fiscal system that can stand the effects of climate change.

With an average economic growth target of 7% per year to 2019, preparations for a fiscal system that is resilient to the impact of climate change should be prioritized. At the very least, such a system should be ready for testing in 2017. Also, the Indonesian state budget should reflect Indonesia's efforts to adapt to and mitigate the effects of climate change. Of course it's a big challenge, but I am optimistic that Joko Widodo's administration will be able to accomplish it, Efransjah concluded.