Climate Change and Indonesia: A Developing Country’s View

On December 10th, generic case the American Indonesian Chamber of Commerce sponsored, in cooperation with USINDO, the Embassy of Indonesia, and the U.S. – ASEAN Business Council, an interactive dialogue on climate change and Indonesia, featuring Agus Purnomo and Ambassador Dino Djalal.  Pak Purnomo, the Special Advisor to the President of Indonesia on Climate Change and the Head of the National Climate Change Council, discussed Indonesia’s progress toward combating climate change and the country’s current forestry partnership with Norway.

Ambassador Djalal began the event by reflecting on Indonesia’s commitment to addressing climate change.  The country has made climate change a central component of its domestic and international policy and has become a leader both regionally and globally.  The Ambassador noted that the leadership of President Yudhoyono was critical to the success of the Bali Declaration and Indonesia’s commitment to reduce its greenhouse gas emissions by 26 percent by 2020, and by as much as 41 percent with international support.  Indonesia has not only been a role model for the developing world, promising to do its part in the battle against climate change, but has also initiated the Forestry G11 and is now working to realize a one billion dollar deal with Norway which could become a model for other donors working on forestry issues.

Mr. Purnomo outlined Indonesia’s recent involvement with the climate change movement and credited President Yudhoyono with bringing climate change to the forefront of Indonesian policy.  85 percent of Indonesia’s emissions in 2005 were related to land use activities, and the country can achieve significant emissions reductions – up to 50 percent – by addressing these issues, while reducing emissions by an additional 50 percent through conservation of Indonesia’s vast, carbon-rich peatlands.

Purnomo explained how Indonesia is developing low carbon growth strategies with pilot projects in Jambi, Kalimantan Timur, and Kalimantan Tengah.  Strategies are specialized for each province, and take into account district size, sector strategies, and implementation plans.  Through collaboration with the private sector, donors, civil society, and government agencies, these growth strategies are designed to make provinces ready for a REDD (Reducing Emissions from Deforestation and Forest Degradation, an effort to create a financial value for the carbon stored in forests through incentives for developing countries to reduce emissions from forested lands)  implementation through land tenure resolution, spatial planning, capability building, and stakeholder management.

Mr. Purnomo also discussed the current Indonesia-Norway Climate Partnership.  The agreement is based on three key elements; first, a “two year suspension on all new concessions on natural forest and peat land,” second, the development of clearly mandated REDD agencies to deliver results on the ground, and finally Norway’s intention of contributing $1 billion to Indonesia’s climate efforts of which $ 800 million is performance dependent.  Mr. Purnomo highlighted that the first $ 30 million will be managed by the UNDP and the subsequent money will be carefully monitored and not susceptible to corruption.  He also addressed concerns regarding the development of sustainable palm oil practices and the use of degraded forest land for future development.  The land identified as degraded will be used for palm plantations which will actually store carbon more efficiently than it is currently being stored in the brush covering these areas.

Following his presentation, Mr. Purnomo took questions from the audience.

Q. When will the details on the moratorium on new forest concessions be issued and when will the selection be for the pilot province?

Mr. Purnomo: The moratorium deadline is January 1, so details will be announced in the next two weeks.  We will produce the best map of forested areas possible by the deadline, and will revise it within six months time. We will not hesitate to expand the area if necessary.  On the issue on the pilot province, we have received nine proposals from nine provinces.  It is possible it will be decided as early this month, although it is not required by then. The pilot province is critical, so we need the full commitment of head of the province and local government.

Q. Was there a substantive conversation between President Yudhoyono and President Obama on climate change during President Obama’s visit?

Ambassador Djalal: This new partnership is broad and one of the sectors is climate change.  Clean energy and forestry are two places we can focus on together.

Q. Could you describe in more detail how these issues will improve the lives of the poor who depend on land use for their livelihoods?

Mr. Purnomo: We do not want a cookie cutter solution because every district will need something different.  One way of improving the lives of the poor is to create alternative income outside of the forest, for example through the creation of harbors so people can make money through trade, or factories based on the abilities of local people.  Also we want to look into solutions based on the land, which would employ the existing skills of local people, such as agricultural products.  From the very beginning, we have agreed to have representatives from indigenous communities give feedback.  We also include civil society groups so we rely on all of these different communities and their input.

Q. Can you characterize the nature of cooperation and coordination at the level of ASEAN?

Mr. Purnomo: There are different positions among members of ASEAN because some are small countries with land based economies, others are large countries, and some have no appreciable forest.  Because of differing circumstances a common position among ASEAN members is rare, but it does happen.

Ambassador Djalal: There are also examples of sub-regional agreements, such as with Malaysia, Indonesia, and Brunei.  There is also the CTI (Coral Triangle Initiative) which is comprised of six countries.  The life of 100 million people is dependent on the Coral Triangle and global climate change will impact the sea greatly.

Q. Will you increase your goal from a 26 percent emissions cut to a 41 percent emissions cut given Norway’s assistance?

Mr. Purnomo: A 26 percent cut is an ambitious plan.  We know that we can do this but the additional support from Norway will help us be more certain that we can achieve a reduction of 26 percent.

Q. Can you give your impression of the current climate change talks occurring in Cancun?

Mr. Purnomo: A lot of the parties coming to Cancun already had reduced expectations caused by the lack of results in Copenhagen last year.  There is hope that there will be progress in the negotiations (which were still under way), though it remains difficult to get all countries to agree.

Q. Can you discuss the non-forestry aspects of the greenhouse gas emissions reduction plan?

Mr. Purnomo: The next biggest source of emission is power generation and then transportation.  These are similar to challenges that developed countries face.  We have huge potential with geothermal energy, but we are currently only using five percent of that potential.  There is still a subsidy on the price of energy, which we continue to reduce.  The next reductions are in January. On transportation, hopefully we can realize a plan for a subway system in Jakarta which has been recently reinitiated. On the issue of industry, that’s much easier to approach, because the industries need new facilities, so there is an opportunity to employ more energy efficient materials.  They are already working on this in the cement industry.  So on that end, they are actually delivering earlier results through private solutions. What Indonesia needs is a climate friendly environment, and it needs to establish this through help from donors for better equipment etc.

Q. In reference to the Norway agreement, how will you maintain transparency and pursue enforcement?

Mr. Purnomo: One way we will achieve transparency is through the use of maps.  We hope over time we will get more accurate updated maps which will clearly show where the moratorium is.  For enforcement, the challenge is to overcome disputes.  The issue is with conflicting claims on land.  Thus, we need to develop a better legal system.  We need to build a system that will last with the changing of administrations in 2014, and for this we need collaboration with parliament and their support.

Q. Can you elaborate on public private partnership (PPP) strategy and palm oil’s role in this?

Mr. Purnomo: The easy answer to PPP is to immediately focus on corporate social responsibility (CSR), however, we need the actors to start moving in addition to CSR.  In Indonesia, corporate responsibility creates opportunity for funding but it is not sufficient for full scale projects, only pilot projects.  So, what we need is to unlock the financial resource of the market.  There will not be a substantial demand on the market to support green investment without agreement, so this is where diplomacy will need to go further. This will be developed in 2012, because we need the agency to deal with these issues, such as questions of why payments go to private and not public funds.  And we need to finalize the split of revenues that PPP will get in the future.

Q Has there been an increase in demand for forestry concessions in the run up to the moratorium?

Mr. Purnomo: A lot of government officials are reluctant to put their signature on certain activities because they are afraid they will face penalties once the moratorium begins.  On the other hand, some companies are increasing new activities before the moratorium because they are worried the land will get taken away; so it goes both ways.

Following the conclusion of the question and answer section, David Merrill, USINDO President, spoke on climate change in the context of the Comprehensive Partnership.  He referred to the Joint Declaration of the two Presidents in Jakarta, which emphasized the need of the non-government sectors and governments to engage in “dynamic collaboration” to make the most of the opportunity created by the Comprehensive Partnership.

Ambassador Merrill noted that, in addition to welcoming non-governmental initiatives in the education sector, the two Presidents in their Joint Declaration expressed their hope that a similar non-governmental initiative would take place in the climate change sector. He invited those organizations in the climate change sector to consider leading a response to the two Presidents’ appeal in this area.  He said that if any climate change organizations are prepared to respond to the two Presidents’ appeal, USINDO will be pleased to share its experience in the non-governmental aspects of the education sector component of the Comprehensive Partnership.

Purnomo, Agus 12-10-10