Green economy takes precedence in push for recovery

With people forced to lock themselves at home to break the chain of COVID-19 spread, pollution has reduced significantly, allowing people in big cities particularly to enjoy fresh air.

The healing seen in nature, however, will be temporary if people do not change the way they conduct businesses once the coronavirus pandemic ends, observers said.

Hence, economic recovery efforts must be used to build momentum to do better in implementing sustainable development and green economy goals, which would entail long-term benefits for a country such as Indonesia.

A new study by the World Economic Forum has found that ‘nature-positive’ solutions can create 395 million jobs by 2030.

In a press release issued last July, the forum stated that putting nature first is good for business and economic resilience. Nature-positive solutions will create US$10.1 trillion in business opportunities, it informed.

Speaking at the G20 Leaders’ Summit, held virtually in November, President Joko Widodo had reiterated Indonesia’s commitment to a more sustainable and greener economy.

The government is set to transform the country’s economy to offer greater environmental protection, he said.

“Economic recovery following the COVID-19 pandemic will no longer overlook our responsibility to protect nature,” Indonesian Foreign Affairs Minister Retno Marsudi said quoting the President, following the G20 Summit.

Indonesia has made some breakthroughs, including implementing the mandatory B30 biodiesel policy and conducting a trial for pure palm oil-based diesel (D100), in a bid to make its economy more environmentally safe. B30 refers to a fuel blend containing 30 percent biodiesel produced from palm oil.

Furthermore, the President has also ensured that the Law on Job Creation brings certainty in the legal aspect of environmental permits, including the environmental impact analysis document (AMDAL) for any infrastructure projects in Indonesia.

The Job Creation Law aims to protect Indonesia’s tropical forests, as they are at the forefront in the global fight against climate change, Marsudi noted.

In line with the new law, the government will set up funding for restoration and rehabilitation of degraded environments.

However, in a report published last month, the Indonesian Center for Environmental Law (ICEL), an independent research and advocacy body, had stated that the Job Creation Law would offer greater flexibility and protection to corporations instead of the environment and the local community affected by infrastructure development.

ICEL put the spotlight on how the law may scrap some mandatory requirements, including the environmental permit, for less risky projects.

But, Indonesian Finance Minister Sri Mulyani Indrawati is upbeat that a green recovery will bolster environment-based global economic transformation, particularly during the COVID-19 pandemic.

“Indonesia will stay committed to reducing carbon emissions, in addition to realizing a climate-resilient country,” she said recently.

Indrawati highlighted that a sustainable green economy is crucial and beneficial for better economic growth in future.

In fact, long before the pandemic broke out, Indonesia had laid the foundation for a green economy and prepared several strategic policies to support it, the minister claimed.

The 2020-2024 National Medium-Term Development Plan (RPJMN) has incorporated climate change into the mainstream of Indonesia’s broader Low Carbon Development (LCDI) strategy.

In the meantime, the government has issued Sovereign Global Green Sukuk, totaling US$2.75 billion, annually since 2018 to support financing of sustainable projects.

Proceeds from the issuance are allocated to finance projects related to sustainable transportation, flood mitigation efforts in highly vulnerable areas, access to energy from renewable sources, waste management, and energy efficiency. These projects are expected to reduce around 8.9 million tons of CO2 emissions.

The government has also allocated US$47.9 billion to provide a special fiscal stimulus to overcome the impact of the pandemic, with 29 percent of the funds set aside for social protection and about 42 percent of funds for tax incentives, credit, and stimulus for small and medium enterprises as well as state-owned enterprises and corporations.

The stimulus includes funding for labor-intensive green projects, such as the mangrove restoration project, spanning an area of 15 thousand hectares and employing around 25 thousand people in coastal areas.

Indonesia needs at least US$247.2 billion in funds, or some US$9 billion every year, to achieve the nationally determined contribution (NDC) target by 2030.

Between 2016 and 2020, Indonesia successfully funded about 34 percent of the national climate financing requirements each year.

On the other hand, Indonesia still requires financing from the private sector in order to overcome the financing gap of 66 percent of the total fund requirement.

The government is providing several fiscal incentives to scale up low-carbon development, including geothermal funding, to address the financial risks resulting from exploration.

“The Presidential Regulation on Carbon Pricing and Renewable Energy Plant Purchase Prices is in the process of being drafted,” Indrawati stated.

In addition, Indonesia has established a sustainable finance roadmap that requires financial institutions to increase their portfolios on green projects.

Earlier, Coordinating Maritime Affairs and Investment Minister, Luhut Binsar Pandjaitan, reiterated Indonesia’s commitment to supporting a green and sustainable economy despite the pandemic.

“We remain committed to achieving the target to reduce greenhouse gas emissions to curtail the negative impact of climate change,” Pandjaitan said at the 7th Singapore Dialogue on Sustainable World Resources (SDSWR), which was held online recently.

Indonesia is targeting to reduce greenhouse gas emissions by 26 percent in 2020 and by 29 percent in 2030. The country has also outlined a target to lower carbon emissions by 17.3 percent in the forestry sector; 11 percent in the energy sector; 0.32 percent in the waste sector; 0.13 percent in the agriculture sector; and, 0.11 percent in the industry and transportation sector.

Pandjaitan elaborated that Indonesia, as a country with abundant natural resources, will continue to restore and rehabilitate its mangroves, coral reefs, and peatlands.

Furthermore, the country will continually strive to reduce land-sourced litter and plastic waste to the sea by encouraging the technology-based waste to energy program.

The minister noted that the government inaugurated a garbage processing plant that will utilize refuse derived fuel (RDF) in Cilacap, Central Java, in July. At the plant, garbage will be processed into briquettes to replace coal.

The use of briquettes as fuel in the industry is expected to lower exhaust gas and methane emissions.

During a webinar on Indonesian forest preservation on November 13, 2020, Pandjaitan had highlighted the country’s endeavors to preserve the forest ecosystem, which functions as a carbon storage.

“Indonesia is home to primary forests, with the world’s third-largest tropical forests that store 200 tons of (irrecoverable) carbon per hectare, as compared to the Amazon that stores 100 tons of carbon per hectare,” he remarked.

Indonesia additionally has 3.4 million hectares of mangrove forests that store one-third of the global coastal carbon reserves, crucial for adaptation and survival in facing natural disasters and climate change.

“Indonesia’s mangrove forests have produced some 500 tons of irrecoverable carbon per hectare and are the world’s richest carbon biomass apart from the tropical peatland. Hence, we need to note that we have remarkable power,” the minister said.

Meanwhile, the Indonesian government has stressed that there will be no trade-off between economic recovery and environmental preservation in efforts to realize sustainable development in Indonesia.

At the launch of the Coral Reef Rehabilitation and Management Program-Coral Triangle Initiative (COREMAP-CTI) in Sorong, West Papua, in November, 2020, Minister of National Development Planning and head of the Bappenas, Suharso Monoarfa, had said reviving the economy and preserving the environment remain the government’s main concerns in the midst of the pandemic.

He compared the two to the wings of a swan that need to move together to achieve flight.

 

Source: Antara News