POLICY
JAKARTA (FORESTHINTS.NEWS) - In a speech at the Indonesia Net Zero Summit 2022 in Bali (Nov 11), Chairman of the Board of Commissioners of the Indonesian Financial Services Authority (OJK) Mahendra Siregar outlined the climate change challenges and opportunities facing Indonesia and how the country's future actions and achievements would depend on the extent to which advanced countries live up to their own commitments and responsibilities.
Addressing the host of the event - the Indonesian Chamber of Commerce and Industry (KADIN) - in remarks titled "Updating Indonesia's National Interest with the Current Global Reality", Siregar acknowledged the paramount importance of climate change and its associated effects, such as food security, rising oceans, wildfires, and hurricanes.
The OJK Chairman made a point of praising Indonesia's Forestry and Other Land Use (FOLU) Net Sink 2030 as part of a concerted climate action to bring about a major reduction in CO2 emissions.
"Indonesia has done well. Through effective forest management, especially the FOLU program, we are well on our way to meet the enhanced NDC and a net carbon sink for the FOLU sector by 2030."
Siregar emphasized that while Indonesia is prepared to meet its enhanced NDC, this is contingent upon receiving the financing long pledged by the world's industrialized countries.
"We are of course willing to go further and while we have set out the enhanced NDC beyond 43%, we have also made it clear that these enhanced targets can only be met with international financial support," he explained.
Indonesia’s enhanced NDC targets, of 31.89% with its own resources and capabilities and 43.20% with international support, were first announced by Indonesia’s Environment and Forestry Minister Siti Nurbaya in September 2022, as reported on at the time by FORESTHINTS.NEWS.
Unmet climate finance pledges
The OJK Chairman lamented the fact that advanced countries, which are culpable for the lion's share of global emissions both past and present, have yet to realize the financial commitments they have made repeatedly to emerging and developing countries, instead talking more now of loans - rather than grants – with inevitably off-putting terms.
According to the OJK Chairman, advanced countries now face the dilemma of a lack of financial resources to meet their pledges, with no way out other than to print more money, thereby prompting further stagflation which would disproportionately hurt developing countries.
He questioned whether countries such as Indonesia really have a moral responsibility to exceed their commitments in the fight against climate change, given the unwillingness or inability of the world's wealthiest countries - who are mostly at fault for climate change - to assist in the achievement of more ambitious goals which may ultimately stifle the growth of developing countries.
"In the absence of international financial support, the question then arises as to why should Indonesia, amongst others, commit to these ambitious goals?"
KADIN efforts praised
In addition to lauding the country’s forestry climate efforts, including and especially its FOLU net sink 2030 targets, the OJK Chairman congratulated KADIN on its various plans and initiatives in support of the acceleration of sustainable finance such as the KADIN Net Zero Hub, climate index and climate-related disclosure enhancement.
"I would stress that it is in the national interest of Indonesia to protect our pristine heritage even if climate change knows no bounds. However, in the absence of international financial support we need to set out strategic plans to optimize our own financial resources," Siregar said.
One of Indonesia's legally-binding climate targets in the battle to reduce emissions, the FOLU Net Sink 2030 operational plan, is substantially funded from the country's own state budget, as pointed out on numerous occasions by Minister Nurbaya, and earlier reported by FORESTHINTS.NEWS.
"The key is to elaborate strategies to optimise financing resources that we possess at the national level based on close cooperation between the Government and stakeholders," the OJK Chairman pointed out.
Siregar cast doubt on the extent to which Indonesia's new taxonomy would benefit industry within the country, given that the widespread green financing projects it entails are still mostly unable to satisfy the energy needs of the industrial economy.
"My early thoughts on this is that the taxonomy rewards companies by sector, the model of which has been developed by some developed countries and is maybe more suited to them," he cautioned.
Ongoing concern
A recurring theme of Siregar’s speech was whether emerging economies, like Indonesia, can afford the economic and social consequences of the deindustrialization associated with efforts to reduce CO2 emissions, in effect curtailing their own current economic progress - while this may be less of a concern for wealthier countries.
"We should perhaps focus on the sustainable development goals, SDGs 2030, that integrate economic and social progress in harmony with the environment," Siregar said.
"For example, a company that contributes substantially to employment and foreign exchange earnings, or a mining company that supplies key raw material for the green economy, or the development of downstream value added, should be identified and rewarded. Environmental parameters may then take account of the holistic nature of the environmental challenges to include waste management and the circular economy,” he suggested.
The OJK Chairman appealed for input from KADIN and other stakeholders on these issues, suggesting that while it is indeed in Indonesia’s interests to move beyond the Paris Agreement and focus on further emissions reductions, considering the lack of climate finance commitments being met by developed countries, this should not be done at the expense of industries that contribute to the economic and social stability of the nation.
RELATED STORIES
POLICY
JAKARTA (FORESTHINTS.NEWS) - In a speech at the Indonesia Net Zero Summit 2022 in Bali (Nov 11), Chairman of the Board of Commissioners of the Indonesian Financial Services Authority (OJK) Mahendra Siregar outlined the climate change challenges and opportunities facing Indonesia and how the country's future actions and achievements would depend on the extent to which advanced countries live up to their own commitments and responsibilities.
Addressing the host of the event - the Indonesian Chamber of Commerce and Industry (KADIN) - in remarks titled "Updating Indonesia's National Interest with the Current Global Reality", Siregar acknowledged the paramount importance of climate change and its associated effects, such as food security, rising oceans, wildfires, and hurricanes.
The OJK Chairman made a point of praising Indonesia's Forestry and Other Land Use (FOLU) Net Sink 2030 as part of a concerted climate action to bring about a major reduction in CO2 emissions.
"Indonesia has done well. Through effective forest management, especially the FOLU program, we are well on our way to meet the enhanced NDC and a net carbon sink for the FOLU sector by 2030."
Siregar emphasized that while Indonesia is prepared to meet its enhanced NDC, this is contingent upon receiving the financing long pledged by the world's industrialized countries.
"We are of course willing to go further and while we have set out the enhanced NDC beyond 43%, we have also made it clear that these enhanced targets can only be met with international financial support," he explained.
Indonesia’s enhanced NDC targets, of 31.89% with its own resources and capabilities and 43.20% with international support, were first announced by Indonesia’s Environment and Forestry Minister Siti Nurbaya in September 2022, as reported on at the time by FORESTHINTS.NEWS.
Unmet climate finance pledges
The OJK Chairman lamented the fact that advanced countries, which are culpable for the lion's share of global emissions both past and present, have yet to realize the financial commitments they have made repeatedly to emerging and developing countries, instead talking more now of loans - rather than grants – with inevitably off-putting terms.
According to the OJK Chairman, advanced countries now face the dilemma of a lack of financial resources to meet their pledges, with no way out other than to print more money, thereby prompting further stagflation which would disproportionately hurt developing countries.
He questioned whether countries such as Indonesia really have a moral responsibility to exceed their commitments in the fight against climate change, given the unwillingness or inability of the world's wealthiest countries - who are mostly at fault for climate change - to assist in the achievement of more ambitious goals which may ultimately stifle the growth of developing countries.
"In the absence of international financial support, the question then arises as to why should Indonesia, amongst others, commit to these ambitious goals?"
KADIN efforts praised
In addition to lauding the country’s forestry climate efforts, including and especially its FOLU net sink 2030 targets, the OJK Chairman congratulated KADIN on its various plans and initiatives in support of the acceleration of sustainable finance such as the KADIN Net Zero Hub, climate index and climate-related disclosure enhancement.
"I would stress that it is in the national interest of Indonesia to protect our pristine heritage even if climate change knows no bounds. However, in the absence of international financial support we need to set out strategic plans to optimize our own financial resources," Siregar said.
One of Indonesia's legally-binding climate targets in the battle to reduce emissions, the FOLU Net Sink 2030 operational plan, is substantially funded from the country's own state budget, as pointed out on numerous occasions by Minister Nurbaya, and earlier reported by FORESTHINTS.NEWS.
"The key is to elaborate strategies to optimise financing resources that we possess at the national level based on close cooperation between the Government and stakeholders," the OJK Chairman pointed out.
Siregar cast doubt on the extent to which Indonesia's new taxonomy would benefit industry within the country, given that the widespread green financing projects it entails are still mostly unable to satisfy the energy needs of the industrial economy.
"My early thoughts on this is that the taxonomy rewards companies by sector, the model of which has been developed by some developed countries and is maybe more suited to them," he cautioned.
Ongoing concern
A recurring theme of Siregar’s speech was whether emerging economies, like Indonesia, can afford the economic and social consequences of the deindustrialization associated with efforts to reduce CO2 emissions, in effect curtailing their own current economic progress - while this may be less of a concern for wealthier countries.
"We should perhaps focus on the sustainable development goals, SDGs 2030, that integrate economic and social progress in harmony with the environment," Siregar said.
"For example, a company that contributes substantially to employment and foreign exchange earnings, or a mining company that supplies key raw material for the green economy, or the development of downstream value added, should be identified and rewarded. Environmental parameters may then take account of the holistic nature of the environmental challenges to include waste management and the circular economy,” he suggested.
The OJK Chairman appealed for input from KADIN and other stakeholders on these issues, suggesting that while it is indeed in Indonesia’s interests to move beyond the Paris Agreement and focus on further emissions reductions, considering the lack of climate finance commitments being met by developed countries, this should not be done at the expense of industries that contribute to the economic and social stability of the nation.
RELATED STORIES
