Institute for Global Environmental Strategies
Towards sustainable development - policy oriented, practical and strategic research on global environmental issues
ADB-JICA-AFD Seminar at ADB Annual Meeting,
Hanoi, Viet Nam
Experience in Implementing
Indonesia Climate Change
Program Loan and Lessons for
Future Cooperation
May 6, 2011
Hironori Hamanaka
Chair of the Board of Directors
Institute for Global Environmental Strategies
Panel Questions (Tentative)
•
•
•
•
Q1: Is investing in “climate-smart” development really smart? What
changes in international financing framework are critical to facilitate
“climate-smart” development? Is there a need for new international
investment-development paradigm?
Q2: Which mechanisms did/did not Southeast Asian countries adopt to
mobilize investments to address climate change? What are key
strengths and weaknesses? What changes are necessary for domestic
policy frameworks in various Southeast Asian countries?
Q3: What are the drivers and determinants of “climate-smart”
investments, especially from the private sector? What are the key
reasons for limited private investments in Southeast Asia? What needs
to be done to change this situation?
Q4: Which innovative financing mechanisms (climate change credit
lines, program loans, carbon funds, climate change trust funds, etc.) are
worth pursuing in Asia in general and Southeast Asia in particular,
especially for climate change adaptation and disaster risk reduction?
Introduction
• Government of Japan (GOJ) and JICA, in collaboration with
AFD, have been providing a Climate Change Program Loan
(CCPL) to the Government of Indonesia (GOI) since 2008.
– With a view to supporting GOI in enhancing climate
change mitigation and adaptation policies and measures.
• Setting targets in the policy matrix, addressing Indonesia’s
major concerns and priority with regard to climate change
• Conducting monitoring and policy dialogues
– General budget support by the loan
• Experience gained in implementing CCPL and lessons
leaned are useful:
– For answering some of the panel questions
– For planning and implementing NAMAs, and for
promoting international cooperation to support
enhanced actions by developing countries.
Why Indonesia?
•
•
•
•
A major emitter of GHG
Vulnerable to climate change impacts
National Climate Change Action Plan (2007)
Hosted UNFCCC COP13 and adopted the Bali
Action Plan (2007)
• Japan and Indonesia agreed on CCPL (2008)
– Focusing on institution building to enhance climate
mitigation and adaptation actions
– GOJ/JICA and AFD have been providing program loan
to GOI.
Estimated net greenhouse gas
emissions in Indonesia
Source: ”Indonesia’s National
Action Plan and MRV”, Ministry
of Environment, Republic of
Indonesia, 2010.
Indonesia’s low carbon development:
challenges
 Mainstreaming climate policy in national development
program
 Enhancing capacities for policy implementation
– Financing scheme
– Establish greenhouse gas inventory system
– Develop NAMA & MRV system
•
For CCPL, development of MRV systems (in terms of MRV of actions as well as MRV
of financing of CCPL)
– Further improve policy coordination among government agencies
– Enhancing capacities of local government
 Improving and enhancing international cooperation
6
CCPL: Scheme
How CCPL operates?
General budget support
Deciding continued/
additional support
Monitoring/assessment of
agreed policy targets/actions
Modifying/adding
targets/actions as necessary
Providing information for
discussion/decision making
Policy dialogues
7
CCPL Phase I
CCPL Phase I (2007-09) Policy Matrix
Implementation of legal/regulatory and institutional reforms;
and pilot projects are monitored/discussed in the following
sectors and cross sectoral issues:
Mitigation
Adaptation
LULUCF
Water
Resource
Agriculture
Energy
Water Supply
& Sanitation
Disaster
management
Marine,
Coral &
Fisheries
Cross sectoral issues
Understanding climate change impact; Mainstreaming; Spatial Planning;
CDM; Co-benefits; Fiscal Incentives; Early Warning Systems
8
CCPL Phase II
CCPL Phase II (2010-2012) Policy Matrix
 Phase II puts more priority on upstream policies or key policy issues
(planning, GHG inventory, financing)
 More stakeholders are joining the cooperative framework. i.e. World
bank(2010-))
Key policy issues
Mainstreaming
Financing scheme/
Policy coordination
GHG inventory
Mitigation
Adaptation
LULUCF
Vulnerability assessment
Energy
Water
Resource
Transportation
Agriculture
Marine, Coral & Fisheries
9
CCPL: Impacts
Provided further opportunity to coordination and
communication in inter-ministerial issues:
Watershed management issue
Renewable energy development
Facilitated sharing progress/challenges of policy actions
and discussion on potential measures/additional
cooperation toward further progress among GOI, and
development partners: (e.g.) forestry, renewable energy
Mainstreamed climate change into development issue
(National Medium Term Development Plan ( 2010-14) and
Indonesia Climate Change Sectoral Roadmap)
Implemented important new policies in key sectors
could provide further progress of policies and actions in public
and private sector in the future
10
CCPL: Lessons (1)
Experience in preparation, monitoring and implementation
of policy matrix provides insight to development of NAMA and
MRV.
Series of policy dialogues based on monitoring the policy
matrix in CCPL process brought positive effects to
indentifying barriers to and discussing countermeasures
for implementation of policies and projects;
enhancing additional international cooperation (i.e.
development of additional TAs and Grant)
11
CCPL: Lessons (2)
 Factors would strengthen positive effects of CCPL:
 Sense of ownership among all relevant
ministries/agencies is key to success of programs;
 Targets should be linked with clear means of evaluation;
 A series of strategically designed policy dialogues can
facilitate the introduction of enhanced climate policies and
better coordination among stakeholders;
Budget process is strengthened to encouraging sector
ministries engage more seriously.
 Better coordination with other schemes addressing
climate change (such as JICA climate change related TAs) is
important.
12
Potential contribution to the collective
effort for enhancing climate actions
Experience gained in implementing CCPL:
– Demonstrate that developing countries can enhance
climate actions, with appropriate support by developed
countries.
Experience in developing NAMAs and MRV
system in Indonesia, through CCPL Phase II and
TA projects:
– Can be widely shared with international community,
and
– Is expected to contribute to the design of international
MRV system.
Further issues related to panel
questions (1)
(Related to First Question)
• Further aligning development and climate change
assistance (i.e. grant, TA and loan, multi-funding
approach, etc)
• Develop a evaluation tool and guidelines for MRV of
development assistance
(Related to Second Question)
• CCPL process provides further international cooperation
• Indonesia developed Innovative mechanisms
– ICCTF
– REED+ financing instrument (on-going)
• Weakness: need to enhance personal and institutional capacity
• Strength: secure budget with national ownership
Further issues related to panel
questions
(Related to Third Question)
• One of the major barriers for limited private investment is
domestic regulatory uncertainty in Indonesia.
– Pricing/subsidy issue
• To attract private investment, further policy reform
should be encouraged.
– Developing policy framework and attempting to
establish exploration fund and FIT(feed-in-tariff)
scheme for geothermal power (in the policy matrix)
Thank you very much
Hironori Hamanaka
Chair, Board of Directors,
Institute for Global Environmental Strategies
hamanaka@iges.or.jp