The Environment Fund Agency, supervised by Indonesia’s Minister of Finance Sri Mulyani Indrawati and Minister of Environment and Forestry Siti Nurbaya Bakar, is taking part in the development of a carbon trading market aiming to reduce greenhouse gas emissions.
With an initial capital investment of Rp2.1 trillion (US$148million), the agency will help Indonesia’s effort to achieve its commitment of lowering carbon emissions by 29% on its own, and by 41% with international support, by 2030 as a signatory to the Paris climate agreement. The climate protocol is a global pact to reduce carbon dioxide emissions that are drive climate change.
An estimated Rp1,065 trillion ($75,2 million) is needed for South East Asia’s largest economy to fund efforts to manage and protect the environment in the four years up to 2020. But the agency, according to Finance Minister Sri Mulyani Indrawati, will also fund various carbon reduction programmes for ministries and will seek multiple sources of financing. “The agency can potentially manage as much as Rp800trillion in the future,” she added.
Key details about the new agency include:
• Funding for the agency can come from public and private sectors and from bilateral or multilateral agreements, as well as philanthropic pledges.
• The agency is expected to be an institution that can provide financing for environmental programmes, not only in the form of budgets but also by providing equity or guarantees.
• Funds are also expected to provided in the form of small grants to people as well as making investments in managing community forests, transforming abandoned mines to be eco-tourism sites, and managing land and forest fires.
• The government has sets aside Rp109.7trillion of funds for climate-related matters in the 2018 state budget
Source: Bloomberg
Image: NBC