Indonesia has experienced stable economic growth over the past decade, transforming the country into one of the largest economies in Asia. At the same time, the government recognises that further action is needed to address poverty, inequality, unemployment and environmental degradation. Accordingly, the Indonesian government is working to incorporate sustainability policies and emission reduction activities into its national plans and targets. 

In 2017, the government launched the Low Carbon Development Initiative (LCDI), which provides analysis of policy scenarios to achieve low-carbon development and poverty alleviation while maintaining economic growth. These policy scenarios are being mainstreamed into the Medium-Term National Development Plan (RPJMN) 2020-2024 that will be used by sector ministries, government bodies and other stakeholders as a reference for their policymaking and programmatic planning.  

In this context, Indonesia joined PAGE in 2018 to transform its economy into a driver of sustainability and social inclusion and to catalyse action to address environmental challenges. Phase 1 of LCDI has already successfully introduced system and spatial dynamics planning tools to assess development scenarios. PAGE support relates to implementation of LCDI Phase 2 in line with the Government of Indonesia’s LCDI focus sectors, including energy, waste, industry, forestry and peat, agriculture, and blue carbon.  

This has contributed to several of the Sustainable Development Goals, including:

LOOKING FORWARD

As requested by the Ministry of National Development Planning (BAPPENAS), PAGE conducted Rapid Assessments on Green Stimulus for post-COVID-19 Green Recovery to feed into the National Green Economic Recovery Plan. The studies focused on LCDI sectors, primarily energy and waste sectors, in alignment with the  PAGE Indonesia ongoing work plans.

In discussions with Bappenas, circular economy was identified as a key area for PAGE to assist country’efforts to promote a green recovery through its ‘Build Back Better with Low Carbon Development’ initiative. With targeted, additional support, PAGE is assessing the potential of circular economy to contribute to a green economic recovery, inclusive of job creation, skills development, and resource efficiency improvements, and identify what fiscal and non-fiscal stimulus plans and policies will best foster private investment in circular economy.  

Learn more about PAGE work in Indonesia in our 2020 Annual Report

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KEY THEMATIC & SECTORAL AREAS

  • National development planning 
  • Green jobs and just transition 
  • Green Industry 
  • Food waste minimization 
  • Green and blue financing 

CAPACITY BUILDING

  • Green Economy Learning Assessment 
  • System thinking and System Dynamics Modelling training 

INDONESIA & PAGE BY NUMBERS

Policies Supported: 2

Assessments: 2 

National institutions & ministries partnering: 1

Initiatives providing co-financing: 1

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National Policymaking

National Policymaking

PAGE is supporting the development and implementation of Indonesia’s national development strategy and associated plan, which, for the first time in the country’s history, is aligned with principles of IGE and the objectives of the Paris Agreement. 

Incorporating IGE into National Policymaking

PAGE’s policy support is centred around Indonesia’s Low Carbon Development Initiative (LCDI) and the National Medium-term Development Plan (RPJMN) 2020-2024. In 2019, as part of the LCDI phase 1 PAGE, along with other development partners, provided support for identifying policy interventions for a green economy modelling exercise, which enabled the integration of IGE policy scenarios into the National Medium-term Development Plan (RPJMN) 2020-2024. In the transition to phase 2 of the LCDI, PAGE supported the development of a framework with five components crucial for the LCDI implementations and a role sharing matrix among the development partners. By developing this phase 2 framework, PAGE also assisted BAPPENAS to transfer the concept of the National Action Plan for Greenhouse Gas Emissions (Rencana Aksi Nasional-Gas Rumah Kaca) to the LCDI. In this context, key entry points for PAGE work were identified by a green economy stocktaking study that analyzed existing green economy initiatives and policies. This work has contributed to SDG 7, target 7.1, 7.2 and 7.3, SDG 8, target 8.4, SDG 13, target 13.2 and SDG 17, target 17.14, 17.15 and 17.19.

Supporting IGE policy Implementation at the Sub-national level

PAGE supported the development of a generic version of the provincial LCDI macro system dynamics model which was completed in June 2020. The model will become an important tool for provinces to translate the national low carbon development approach to the sub-national level as it provides the basis for further modelling at the provincial level.  With PAGE’s support, the macro model will be enhanced for each of the three LCDI pilot provinces, taking into account the provincial characteristics, development landscape, and provincial data. PAGE support to the provinces also involves capacity-building for mainstreaming the LCDI approach into the National Medium-term Development Plan (RPJMD), technical assistance to formulate the Provincial Low Carbon Development Plans (RPRKD), as well as an assessment on alternative financing schemes. By strengthening the capacity of the regional government to incorporate LCDI model, this workstream contributes to SDG 13, target 13.2 by integrating climate change into policies.

Sectoral and thematic reform

Sectoral and thematic reform

PAGE has supported the implementation of evidence-based sectoral and thematic reforms in line with the national green economy priorities enshrined in the LCDI. The work supported by PAGE is set-out below:

Promoting green industry

On 22 October 2019, PAGE Indonesia carried out a validation workshop of the recently developed Green Industry and Trade pre-Assessment (GITA). The assessment focused on resource efficiency, energy intensity and other relevant indicators of the IGE, in four industry sectors: pulp and paper, cement, fertilizer, and food and beverage. Building on the findings, PAGE started the process to develop a resource efficiency assessment in the fertilizer industry in 2020, to develop policy recommendations in line with the LCDI. This contributes to SDG 7, target 7.3, by seeking to improve energy efficiency and SDG 9, target 9.2, by promoting inclusive and sustainable industrialisation. It also supports SDG 12 target 12.2, though improving industrial resource efficiency and waste reduction.

Energy policy reform

Directly linked to the targets of the LCDI, and building on the earlier support in 2019, PAGE commenced the development of LCDI energy sub-model with the Ministry of Energy and Mineral Resources in January 2020. By providing a tool to assess policy scenarios, this work aims to support the government, specifically MEMR and BAPPENAS, to accomplish better planning in the energy sector and align with the targets of the national LCDI strategy and on GHG emission reduction. The intended result will support achievement of SDG 7, SDG 8 and SDG 13, with focus on providing strategic and readiness assessment on ‘just transition’ in the energy sector, consistent with UN Climate Action for Jobs Initiative.

Blue and green finance mechanisms

UNDP Indonesia through its Innovative Financing Lab (IFL), is assisting the Government of Indonesia to develop the world’s first framework for blue financial instrument, with work initiated in 2018. In October 2019, the Blue Financing Framework was launched during the Archipelagic and Island State Forum in Manado, Indonesia. Through its IFL, UNDP also continues to support the Green “Sukuk” Bond. In February 2018, the first Green “Sukuk” Bond was launched, by the Ministry of Finance and in 2020, with PAGE support, UNDP assisted MOF to publish a Second Green Sukuk Allocation and Impact Report in early March 2020, which provides insights into how the proceeds have been used. This work contributes to SDG 17, target 17.3, by supporting the mobilisation of financial resources for developing countries. 

Green fiscal policy

Under the Green Economy Transformation (GET) project implemented by UNEP and GIZ, Indonesia has been selected as one of the partner countries to receive support in the area of green fiscal policy. UNEP took part in a mission to Jakarta (9-12 July 2019) to attend a project kick-off meeting with the Ministry of Finance and to consult with UNDP and other organizations working on carbon pricing issues in Indonesia to identify synergies and opportunities for collaboration. In 2021, PAGE conducted an Enabling Environment Assessment on Green Finance in West Java Province. Building on this, PAGE will develop business cases for selected green projects with the selected financing mechanism for piloting in the West Java province.

Strengthening capacity

Strengthening capacity

PAGE has strengthened individual, institutional and planning capacities for IGE action in Indonesia, having organized modelling training to support regional IEG policy development as well as conducting an assessment of learning needs to develop a programme for green economy skills development. Examples include:

Capacity building to support policymaking

PAGE in collaboration with GIZ has provided support for BAPPENAS in conducting an introductory training on system thinking and System Dynamics Modelling targeted at Regional Governments officials and universities in the Central Indonesia region in October 2019, attended by a total of 184 participants. The training contributes to SDG 4, target 4.7, by enhancing knowledge and skills needed to promote sustainable development and SDG 13, target 13.3, by improving education on climate change.

Contributing to green economy learning

In 2020, PAGE conducted the Green Economy Learning Assessment with the overall objective to develop a comprehensive, nationally executed skills development programme on green economy for civil servants within BAPPENAS and other key stakeholders, in support of the LCDI Implementation Framework. The Assessment was launched in 2021 at a webinar on “Learning and Skills Development for Green Recovery: Building Back Better with Low Carbon Development in Indonesia”. Moving forward, it will also contribute to assessing skills and developing capacity-building activities targeting for policymakers and government. This work has supported the achievement of SDG 4, target 4.7, by identifying priority learning needs to promote sustainable development.

COUNTRY FOCAL POINTS

Coordinating Agency Focal PointsAmrei Horstbrink (UNITAR)
PAGE Project CoordinatorDiah Ratna Pratiwi (UNDP)
Government Focal PointsIrfan Darliazi Yananto, Ministry of National Development Planning (Bappenas)
Ir. Medrilzam, M.Prof.Econ, Ph.D Director of Environment Affairs | Ministry of National Development Planning (Bappenas)