WIEF JAKARTAROUNDTABLE 2017

Jakarta, Indonesia5 OCT 2017

Scaling Up Green Growth Strategies The Case of Indonesia

Professor Armida Salsiah AlisjahbanaSDGs Center – Universitas Padjadjaran

Indonesian Academy of Sciences

1. WhyGreenGrowth?andWhyGreenGrowthforSEAsianCountries?

2. LeveragingGreenGrowth:theCaseofIndonesia• DevelopmentPotentialsandChallenges• NationalGreenGrowthStrategies• LeveragingPotentialsforGreenGrowthRealization

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Outline

Why Green Growth for SE Asian Countries?

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Figure1.UseofNaturalWealth

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WhyGreenGrowth?WhyGreenGrowthforSEAsianCountries?

Source:OECD,SEAsiaGreenGrowthStrategies,2015

Figure2.ClimateChangeImpact

Source:OECD,SEAsiaGreenGrowthStrategies,2015 6

GreenGrowthsupportsSustainableEconomicDevelopmentWhatkindofGreenGrowthStrategy?

VariesacrossSouthEastAsianCountries

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Leveraging Green Growth: the Case of Indonesia

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ArchipelagiccountrySizablepopulationRapidurbanizationAbundantnaturalresources(renewableandnon-renewable)Richinbiodiversity

YoungpopulationGrowingeconomy– growingdemand

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Indonesia’sDevelopmentPotentialandChallenges(1)

Industry4.0IT/ICTrevolutionGenerationshiftGrowingmiddleclass

Povertyandinequality“Dual”economy(traditionalandmodernco-exist)Governanceandinstitutions

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Indonesia’sDevelopmentPotentialandChallenges(2)

• NospecificNationalGreenGrowthStrategies• WhatIndonesiahas:

– RANGRK(2011-2020)à NationalActionPlantoMitigateClimateChange

– RADGRK(until2020)à RegionalandLocalActionPlantoMitigateClimateChange

– RPJMN2015-2019à SustainableDevelopmentismainstreamedintoMediumTermDevelopmentPlan

– NationalDeterminedContribution(2020-2030)à submittedtoParisClimateAgreementonNovember,2016

– Partial/fragmentedGreenGrowth/EconomyInitiatives(Sector,productorcommodityspecific)

– Privatesectorenterastheyseefit(althoughKADINorIndonesiaChamberofCommercesocializeandfacilitates)

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NationalGreenGrowthStrategies

Source:Bappenas andGGGI,2015 12

LeveragingGreenGrowthStrategies

Source:Bappenas andGGGI,2015

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LeveragingGreenGrowthStrategies

Source:Bappenas andGGGI,2015 14

GreenGrowth Opportunities

Table2.2.Keyenablersforenergyandextractives

Source:Bappenas andGGGI,201515

EnergyandExtractives

THEMES KEYENABLERS SUGGESTEDINDICATORS

IncreaseaccesstomodernenergyservicesinremoteruralareasofIndonesia

1.Conductregionalassessmentstodetermineappropriateenergysolutions2.Provideincentivesforinvestmentincleanenergyaccesssolutions3.Investigatelocalised barrierstoinvestmentanddevelopknowledgetransfer

•%ofpopulationwithelectricityconnection•CountryscoreonSE4ALLmultitierframework

Orienttheenergysectortowardslowercarbonenergysources

4.Evaluatefeed-intariffs5.Removefossilfuelsubsidies6.Implementcarbonpricing7.Exploreoptionsfordomesticgasasabridgingfuel8.Attracttheprivatesectortogeothermalbyaddressingfinancialbarriersandsharingrisk

•%generationwithrenewables•%generationwithgas•EnergySectorCarbonIntensityIndex

Increasevalueaddedinmineralextraction

9.Developtargetedapproachtoincreasingvalueaddedinmineralprocessing10.Developmineralprocessingindustriesinareaswithrenewableenergy,watersupplyorotherauxiliaryresources

•Grossvalueaddedofmineralsprocessingsector•Employmentofmineralsprocessingsector

Table2.3.Keyenablersformanufacturing

Source:Bappenas andGGGI,2015 16

Manufacturing

THEMES KEYENABLERS SUGGESTEDINDICATORS

Improveenergyefficiency

1.Developfiscalincentivesforenergyefficiency2.Removefossilfuelsubsidiesandintroducecarbonpricing3.Improveproductionmethodsinheavyindustriesincludingtherefiningsector4.Engagekeyindustryplayersonenergyefficiency

•EnergyconsumptionperunitGDP•EmissionsfrommanufacturingperunitGVA

Developclean-techsector

5.InvestinR&Dinclean-techforprocessingmaterials6.SupportSMEsintheclean-techindustry

•Grossvalueaddedofclean-techsector

Promotebetterwastemanagement

7.Establishnewindustriesaroundwasteproductsandprocessing8.StimulateinvestmentinlowGHGlandfillsandensureprojectexecution

•Grossvalueaddedfromwastemanagementindustries•%ofwastedivertedtolandfill

Table2.4.Keyenablersforconnectivity

Source:Bappenas andGGGI,2015 17

Connectivity

THEMES KEYENABLERS SUGGESTEDINDICATORS

Build‘smart’cities

1.Createinstitutionalstructuresandcapacityforsmartcityplanning2.Embedclimateriskassessmentintoinvestmentprocessesforurbandevelopment

•Qualitativeassessmentofsmartcityprogram

Establishintermodalconnections

3.Createinstitutionalcapacityforintermodalconnectivity4.Establishtargetedpipelineforgreeninfrastructureprojects5.Carryoutextendedcost-benefitanalysesofmajorconnectivitysolutions

•Qualitativeassessmentofintermodalprogram

Table2.5.Keyenablersforrenewablenaturalresources

Source:Bappenas andGGGI,2015 18

RenewableandNaturalResources

THEMES KEYENABLERS SUGGESTEDINDICATORS

Improveforestandlandmanagement

1.AcceleratetheOneMapinitiative2.Monitorandensurewhere/whenconcessionsandlicensesareawarded3.Buildenvironmentallawenforcementcapacity4.Scaleupinnovativemodelsforforestandpeatland management5.Addressdegradedpeatland andpeatland fires

•Forestcoverchange•Qualityandflowsofecosystemservicese.g.plantspeciesrecordedinspecifiedareaandtimeperiod•Numberofforestconcessionsandplantationsmeetinggoodpracticestandards•Watercoverageinpeatland areas•Areaofdegradedpeatland•GHGemissionsfromdegradedpeatland•Numberofpeatland fires/year

Securemarineecosystems

6.Engagecommunitiestorestoreecologicalproductivityofmarineecosystems7.Improvemanagementofindustrialliquidandsolidwastesincoastalareas

•Productivityordepletionoffishstocks•Speciesdiversityofcoralreefs•Areaofqualityreefs,seagrass,mangrove•Marinewaterquality

Table2.5.Keyenablersforrenewablenaturalresources

Source:Bappenas andGGGI,2015 19

RenewableandNaturalResources

THEMES KEYENABLERS SUGGESTEDINDICATORS

Developsustainablesupplychains

8.ScaleuptheSustainableConsumptionandProductionprogramacrossministries9.Strengthentheambitionandenforcementofdomesticproductcertifications10.Developknowledgetransferprogramonsustainablesupplychains11.Addressroleofsmallholdersinproduction12.Promotenaturalalternativestochemicalfertilizersforsoilfertility

•Valueofcertifiedsustainableproduction•Trackersonkeyproductcertifications•NumberoffirmspracticingRSPO•NumberoffirmspracticingISPO

Progresstowardsfoodsecurity

13.Improveproductivityofrice,palmoilandotherkeyfoodcommodities14.Diversifystaplefoods15.Directpublicinvestmenttowardspeatlandrehabilitationactivities16.Supportexpansionofecosystemrestorationconcessions

•RiceproductivityperHa•Numberofstaplefoodsindiet

Table2.6.Keyenablersfornewnaturalcapital-basedmarkets

Source:Bappenas andGGGI,2015 20

NewNaturalCapital-BasedMarkets

THEMES KEYENABLERS SUGGESTEDINDICATORS

Scaleupecotourism 1.Rolloutecotourismtrainingandmonitoring •Qualitativeassessmentofecosystemprogram

Identifynewnaturalcapital-basedmarkets

2.Establish,supportandmonitornewnaturalcapital-basedmarkets3.Undertakeresponsiblebioprospecting tounderpinthedevelopmentofbiotechnologyindustries

•Grossvalueaddedofnewnaturalcapitalmarkets

Establishpaymentsforecosystemsservices 4.IntroducePESgovernance •VolumeofPESfinance

disbursed

Accelerateinternationalanddomesticcarbonoffsetting

5.Developframeworkfordomesticcarbonmarket6.Responddynamicallytointernationaldiscussionsoncarbonpricing

•VolumeofcarbonfinancingforIndonesianprojects•Numberofnewprojectsregisteredundercarbonoffsetting

Mobilizeforestcarbonfinance

7.Developaprioritizedpipelineofactivities8.Establishpreferentiallong-termdebtfinancing

•VolumeofREDD+financedisbursed

1. Areregulationsanddirectivessufficient?2. Willcommandandcontrolwork?3. But,atleastthestrategiesandplanshavetobe

imbeddedintothenationalandlocalplans4. Certaintyinregulationisamust?5. Therightpricing,i.e.incentivestoinvestors6. Howtobenefitcommunityaswell7. Otherissuestobediscussed…………..

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HowtoMainstreamGreenGrowth?

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