VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Indonesia will require an estimated Rp4,520 trillion to achieve the target of reducing greenhouse gas emissions by 2030 based on the revised Nationally Determined Contribution (NDC), Finance Minister Sri Mulyani stated.

"In 2018, we had estimated it at Rp3,641 trillion. It was then updated to increase to Rp4,520 trillion based on the roadmap for NDC. The figure is considerably huge," the minister remarked at the Indonesia Green Summit 2021 held virtually and accessed in Jakarta on Tuesday.

As one of the instruments, the state budget (APBN) has developed budget tagging, wherein a transparent explanation is provided on the percentage of national spending to mitigate the impacts of climate change, which currently stands at 4.1 percent, Mulyani noted.

"Between 2018 and 2020, it had reached Rp102.6 trillion, or 4.3 percent of our total budget. That is only 34 percent of the annual fund requirements," she pointed out.

Mulyani explained that in order to uphold the NDC commitment mandated by the Paris Agreement, the government as well as all corporations and communities, as an entire ecosystem, will have to finance it nationally.

"At the global level, we also strive for it," the minister stated.

Indonesia has remained committed to unconditionally reducing greenhouse gas emissions by 29 percent against a 2030 business-as-usual scenario and by up to 41 percent below the 2030 business-as-usual level, subject to international assistance for finance, technology transfer, and capacity building.

"As per the policy, we aim to lower CO2 emissions even up to net zero emission, so we apply the fiscal instrument or tax holiday, tax allowance, and value added tax. We have just issued Government Regulation No. 24 of 2021 that reflects higher luxury sales tax for cars or vehicles that release higher than the permissible level of emissions," Mulyani remarked.

The minister believes these all serve as instruments whose value is not based on the budget but the policy to change incentives. As such, all sides, including corporations and the community, will not only be aware but also willing to adopt the climate commitment in their investment and consumption decisions.

"To that end, of course, we must continue to diversify our various instruments, so that the private sector can partake in it. As I earlier stated, 32 percent of it is directly funded by the state budget, so we will strive to attract more participation of the private sector," she affirmed.

Domestically, the government can provide incentives or blended finance through the government-to-business cooperation (KPBU), Mulyani remarked.

"We give guarantee. We partake in funding the project, so it (the private sector) will look financially viable. We provide incentives to them, so funds for the private sector will flow in," the minister added. (Antaranews)