Nusa Dua, The Indonesia Post – Minister of Finance Sri Mulyani Indrawati said that the Indonesian government has disbursed IDR 313 trillion in funds until 2021 for investment needs in efforts to reduce carbon emissions.
“This is only eight percent of the total investment requirement,” Sri Mulyani said at the Asian Development Bank (ADB) symposium in Nusa Dua, Bali, Thursday.
According to her, Indonesia’s total investment needs to support the nationally determined contribution (NDC) in reducing carbon emissions is around Rp.4,002 trillion or around US$281 billion by 2030.
Previously, the government had increased its emission reduction commitment from 29 percent to 31.89 percent with its own efforts and from 41 percent to 43.2 percent with international assistance.
Some time ago, the Indonesian government submitted a revised commitment to reducing carbon emissions to the United Nations Climate Change Secretariat (UNFCCC).
To meet the investment needs in supporting the NDC, the former Managing Director of the World Bank invited the participation of the private sector, both domestic and international, to philanthropic circles to contribute to support this commitment.
“The Indonesian government, we have issued a number of fiscal incentives as well as innovative financing to close this gap in investment needs,” said Sri Mulyani.
Incentives in the taxation sector include the provision of tax holidays, tax allowances, value added tax facilities (VAT/VAT) to property taxes.
Indonesia, she said, also issued investment instruments related to environmentally friendly investments, namely Green Sukuk and Sustainable Bonds (SDG Bonds) both at the domestic and international levels.
She hopes that the two instruments can achieve the goal of reducing emissions of 10.6 million tons of carbon dioxide (CO2).
Minister of Finance added that emission reduction commitments also need to be supported by carbon trading policies and carbon taxes.
“This policy will use carbon trading and non-trading instruments including carbon taxes to internalize the external costs of greenhouse gas emissions,” she said. (mhn/bbs)
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