Transcript Indonesia

Climate Change and
Indonesia
By Charlie Reed
Background
•
•
Physical
– 735,000sq mi;
– 17,000 islands
Social Indicators
– Population – 211,700,000 (4th Largest in the World)
– Growth – 1.3%, Replacement Rate 2.3
– Urban 43%
– Poverty 16%
– Income Per Capita $810 (GNI 2003)
– Life Expectancy 67
– .6% of GDP on health, 1.2% of GNI on education (Low)
– Net Primary Enrolment %93; Illiteracy 12%
Indonesia is better off then other low income countries.
•
Economic indicators
–
–
GDP growth 3.4% ; per capita GDP growth 2.3%; Was around 6% until Asian financial crisis
Economic make up (Value Added % of GDP)
•
•
•
–
•
Export 31.2% of GDP, Import 25.7%
Investment Climate
–
–
Lost share in world export market
Major issues Investors : macroeconomic instability, policy uncertainty, and corruption
•
•
–
Indonesia must improve investment laws and increase confidence in the government
Survey shows that it takes 151 days to start a business (Thailand 33, Malaysia 30, China 41)
Terrorism affects investment
•
•
16.6 % Agriculture (40% of labor force)
43.3 % Industry
39.9 % Services
After 2002 Bali and 2003 Marriot bombing investment approvals declined
Future Economic Outlook
–
–
GDP growth to be 5% in 2005 and should remain high
Investment Climate to improve
Carbon Emissions
• Indonesia is responsible for 1% of global total.
CO2 Emissions, Relative Trends, Indonesia
Index 1980 = 1
4
Total CO2 Emissions
CO2 Emissions Per Capita
CO2 Emissions Per GDP (1993 Rupiah)
3
2
1
0
1980
1985
1990
Source: Energy Information Administration, World Development Indicators
1995
2000
Climate Change Impacts on
Indonesia
•
More than 17,000 islands, 81 thousand km coastlines- Estimated cost of
about 10% GDP
•
Health
–
–
•
Impacts due to sea level change
–
–
–
•
1990- 110 of 170 million live on near the Ocean.
Loss of marsh land and other agricultural land costing 11.3 billion annually (60cm)
Tsunami is example of how sea level rise can devastate the poor ocean side population.
Forestry
–
•
Like other developing countries- Increase transmission of vector born diseases
Heat stress
Forestry will benefit because of increased growth- Studies show that 2 times CO2 causes
tropical biomass growth of 12%
Agricultural Impacts
–
–
Agricultural production will decline due to flooding, erosion, loss of arable land, and
accelerated evapotranspiration during dry seasons
Crop yields will fall
•
–
Soybean production would decline by 20% to %40 and rice by 2.5%
Estimated that soil erosion and land loss has cost $6 billion annually
Developments/Agencies
•
•
•
Indonesia signed UNFCCC in June 1992 and ratified it in August 1994
Set up a monitoring system for CO2 emissions and sinks.
Set up the National Committee on Climate Change (NCCC) to address
climate issues
– Consist of representatives from various government agencies, NGOs, academic
and business communities.
–
–
–
–
–
–
–
–
•
•
Strengthen the coordination between government institutions.
Develop national institutions to anticipate climate change.
Evaluate the implementation of UNFCCC and KP.
Develop global cooperation and partnership in dealing with CC issues.
Represent Indonesia in the COP’s meetings and high level summits related to the
convention and the protocol.
Encourage active participation of all stakeholders in dealing with CC.
Encourage and guide R&D in related sectors.
Encourage and guide technology transfers in order to reduce GHG in all sectors.
Indonesia signed the Kyoto Protocol in 1998
Approved its ratification on June, 28 2004
Agencies
• Ministry of Environment
– Oversee all environmental affairs
• NCCC
– Consist of representatives from various government agencies, NGOs, academic
and business communities.
–
–
–
–
–
–
–
–
Strengthen the coordination between government institutions.
Develop national institutions to anticipate climate change.
Evaluate the implementation of UNFCCC and KP.
Develop global cooperation and partnership in dealing with CC issues.
Represent Indonesia in the COP’s meetings and high level summits related to the
convention and the protocol.
Encourage active participation of all stakeholders in dealing with CC.
Encourage and guide R&D in related sectors.
Encourage and guide technology transfers in order to reduce GHG in all sectors.
The National Committee on Climate Change
Chair:
Minister of Environment
Secretary: Deputy Min. for Env.
Conservation of MOE
Vice Secretary: Head of AMG
Secretariat /Support. Unit:
Climate & Atmospheric Affairs, MOE
NDPA
DOFA
DOFO
DOHRI
DEMR
DIT
DOT
MOE =
AMG =
NDPA =
DOFA =
DOFO =
DOHRI=
DEMR =
DIT
=
Ministry of the Environment
Agency for Meteorology and Geophysics
National Development Planning Agency
Department of Foreign Affairs
Department of Forestry
Department of Housing and Regional Infrastructure
Department of Energy and Mineral Resources
Department of Industry and Trade
DOA
DOT =
DOA =
DOH =
DOHA=
DOFI =
MORT=
DMF =
NISA =
DOH
DOHA
DOFI
MORT
DMF
Department of Transportation
Department of Agriculture
Department of Health
Department of Home Affairs
Department of Finance
Ministry of Research and Technology
Department of Maritime and Fisheries
National Institute for Space & Aeronautics
NISA
CDM
•
•
•
Under Article 12 the objective is to assist Annex 1 countries to meet
there target, and assist Non Annex 1 countries to achieve
Sustainable Development
Since 1996 Indonesia has actively supported the Activities
Implemented Jointly (AIJ) mechanism
Indonesia will be looking to attract CDM projects
– Indonesia has the potential of hosting CDM projects that reduce a total
of 125 MT of carbon
– Revenues of 50m/yr, profits of $25m/yr
•
Indication of a country’s preparedness for CDM Projects
– Ratification of Kyoto protocol
– Appointment on a Designated National Authority (DNA)
– Approved Criteria for National approval of CDM projects
– Number of projects approved
CDM
•
Ministry of the Environment established Indonesia’s Designated National Authority
(NDA) in April 2004
–
The DNA would act as a National Focal Point for communication between parties.
UNFCCC Secr.
COP
SBSTA,
SBI
National Committee
CER
NFP
Stakeholders
CER
•
Currently there are several components that need capacity building
–
–
–
–
–
–
–
DNA
Project proponents
Local authorities
Local communities and other local stakeholders
Potential operational entity
Legal consultant
Financial institutions
CDM
• CDM should only be accepted if they fulfill these Criteria to develop
Sustainable Development.
–
–
–
–
–
–
–
–
–
–
–
No adverse environmental impact
Environmentally sound technology transfer
Stakeholder participation
Respect of Customary Right (land tenure)
Increased employment
Community development program
Capacity building improvement
Local economic benefits
Equitable distribution of benefits
No net increase in external debt burden
See notes for more explanation
Posible CDM Projects
•
Wayang Windu Unit 2,
–
•
Utilization of Combined Solar, Wind and Biomass for a small agro-processing unit
–
•
•
Rice husk to be used to generate electricity . Potential of emission reduction is 139,390 over
10 years.
Inducement efficiency project
–
•
Potential emission reduction of 9,600 tCO2e over 10 years
Bandarjaya Rice Husk Power Plant
–
•
110MW geothermal project in Java. Potential reduction for a crediting period of 7 years
around 750,000 tCO2e for 5.2 euro a ton
Use alternative fuels and various process optimization techniques to reduce CO2 emissions
from cement producer. Reduction of one million tCO2e/year
Countries that have shown the most interest are Netherlands, Japan, Denmark,
Austria and Canada
"We'll offer more qualified projects that reduce more carbon, a guarantee that the
projects will be sustainable and of course, a more negotiable price of carbon,"
– Sudariyono, the deputy for environmental conservation at the Office of the State
Minister of Environment.
Sinks (Forestry)
•
•
Forest considered second to only Brazil as the most important world
heritage of tropical forest
The inclusion of sinks can be very profitable for Indonesia
– If Indonesia were to control 10% of the market for sinks they would produce 1.8
mtCO2e/year, causing revenues of an extra $80 million.
•
Indonesia has recently had a startling decline in forest cover
– Despite a 38% increase in plantation forest overall has fallen by 16% from 1990
to 2000
– Fires have reduced forest cover, emitted CO2 and regional air pollution, and
have cost billions
•
Adding value to forest through sinks would reduce the incentive fro
deforestation
– By combining carbon emission and forestry into a system with clear property
rights, progress could be made in solving many of Indonesia's environmental
issues linked to deforestation.
Forest
• Growth of Indonesian forest provide a sink that
sequester CO2 at a rate of 686,790 Gg annually
– The energy sector in Indonesia 170Gg annually
(1994)
Percentage Change in Forest Area by Type, Indonesia, 1990-2000
World
Asia (excluding Middle East)
Indonesia
Total Forest
Natural Forest
Plantation
-20%
0%
20%
40%
Percentage Change 1990-2000
Source: World Resources Institute
60%
80%
Oil and Energy
• Indonesia is part of OPEC receives $9 billion a year from oil exports
– Export 1.4 million barrels of oil a day out of world total of 78
million barrels which is 3.8% of OPEC in 2003
– A decreased demand for oil because of Kyoto protocol would
decrease revenues because of decreased market share of
OPEC.
– But Indonesia's Oil capacity is decreasing. In 1991 they
represented 6% of OPEC output and produced under capacity.
• Effects of a rise in Oil Prices
– On one hand it increase value of oil exports and generates
revenue
– On the other hand higher oil prices reduce demand for exports.
• Increase of oil cost by $10 causes a .6% decrease of world
GDP growth
Oil and Energy
•
Indonesia subsidizes oil prices
–
•
Implications of subsidies on energy use
–
–
–
•
As oil prices rise the cost of subsidies increases causing major fiscal strain
Since oil is under priced in Indonesia there is a tendency to overuse.
Energy use per GDP has increased slightly while in most countries it has decrease by
approximately 1% a year reflecting increased efficiency.
Indonesian can increase the economic incentive for energy efficiency reducing CO2 emission
Side Note: While OPEC is the sworn enemy of the Kyoto Protocol and emission
reduction measures, yet it has probably done the most to curb climate change by
inflating prices and making cleaner option viable.
Steps to Reduce Indonesia’s
Emissions
• Any steps measures to reduce emission must do so without
hampering the national development objectives.
– Energy
•
•
•
•
Removal of subsidies
Promote Renewable energy
Promote public adoption of energy conservation
Restructure prices to include externalities
– Transportation
• Promote use of public transportation.
• Road Pricing and area traffic control systems to allow road users to realize
the value of that public good
• Control vehicle emission and promote the use of clean fuels
– Agriculture
• Promote improved agricultural practices that emit less GHG
• Staple food diversification by promotion of non rice food sources
• Improve technology transfer.
– Forestry
•
•
•
•
Stronger regulations of forest management
Revise current management policies
Prevent the occurrence of forest fires through better preparation
Replenish forest
– Costal Resources
• Promote coral reef rehabilitation and develop national marine
resource evaluation and planning program
• Continue to Develop a nationwide tide gauge station network to
monitor sea level rise
• Prepare long term adaptation strategy for possibility of sea level
rise.
Conclusions
• Indonesia is highly susceptible to damage from climate change and
sea level rise.
– Have a vested interest GHG reduction
• Indonesia has just ratified the Kyoto protocol and is interested in
CDM projects
– Successful implementation of CDM project could improve the
investment environment as a whole and attract investors in all markets.
– CDM projects would help achieve the ultimate goal of sustainable
development.
• Energy subsidies are costly and hazardous to the environment.
• Carbon sinks can be used to set up a clear system of property rights
to help manage and protect the forest cover
• Many Steps that can be taken to reduce CO2 emissions improve
other pollution problems and contribute to Sustainable Development
Thank You
• http://unfccc.int/resource/docs/natc/indonc
1.pdf
• http://dna-cdm.menlh.go.id/en/
• www.menlh.go.id