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 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 with a focus on the energy, waste, industry, forestry, peat, agriculture, and blue carbon sectors. PAGE work in Indonesia is currently aligned to SDGs 8, 9,13 and 17.
- LCDI launched
- Indonesia joins PAGE
- Kick-off meeting held providing an overview on the RPJMN
- PAGE Inception Workshop held to inform PAGE support
- Report on “Low Carbon Development: A Paradigm Shift Towards a Green Economy in Indonesia” launched with inputs provided by PAGE on LCDI policy scenarios
- A Framework for LCDI Phase 2 developed, including a role sharing matrix
- Validation workshop for the Green Industry and Trade Pre-Assessment held
- Four day introductory training on Low Carbon Development, System Thinking, System Dynamics Modelling and Red-cluw held
- Draft green economy stocktaking study completed
Progress in 2019: A snapshot
Supporting Phase 1 of the LCDI
PAGE provided support in identifying policy interventions for the green economy modelling exercise under the LCDI, which the national modelling team used for its simulations in the LCDI model. Completed in January 2019, this work formed the basis of LDCI Phase 1, with policy scenarios to be incorporated into the RPJMN 2020-2024. The modelling exercise is an essential contribution to the development of Indonesia’s RPJMN 2020-2024 and supports the Ministry of National Development Planning (BAPPENAS) to introduce systems thinking into national and regional development planning.
The modelling exercise was used as an input to the ground-breaking report “Low Carbon Development: A Paradigm Shift Towards a Green Economy in Indonesia”, launched on 26 March 2019 by BAPPENAS, showing how the country could gain tremendous economic benefits by transitioning to a low-carbon economy.
Supporting Phase 2 of the LCDI
With support from PAGE and other partners, BAPPENAS developed a framework for implementation of LCDI Phase 2, completed in July 2019. 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. By becoming part of the LCDI Phase 2 framework, the government will broaden this National Action Plan to incorporate socio-economic and other environmental impacts.
A side event at UNFCCC COP25 in Madrid in December 2019 on “Mainstreaming Low Carbon Development Economy into Policy Planning” drew attention from a global audience to the Indonesian experience in mainstreaming low carbon development into policy planning.
Taking stock of current green economy initiatives
PAGE conducted a stocktaking of green economy initiatives and policies, with a draft for review completed in December 2019. The study has identified entry points for PAGE support for implementation of LCDI policy scenarios, as well as existing challenges with implementation at the national and regional level. These include:
- Supporting the translation of LCDI targets into specific sectoral policies at the national level;
- Enhancing the LCDI model and improving the database system development required for LCDI modelling;
- Supporting local governments to mainstream the national LCDI model within their RPJMD and build capacity for its utilisation for the next term planning process;
- Developing a private sector engagement platform and incentives for the private sector to support implementation of the LCDI; and
- Improving knowledge and awareness of LCDI amongst stakeholders.
Promoting green industry
On 22 October 2019, PAGE Indonesia carried out a validation workshop of the recently developed Green Industry and Trade Pre-Assessment. The assessment focuses on resource efficiency, energy intensity and other relevant indicators of the IGE, in three industry sectors - pulp and paper, cement, and food and beverage. The workshop was held together with BAPPENAS and other line ministries, including the Ministry of Industry, the Ministry of Environment and Forestry, the Ministry of Energy and Mineral Resources and several industrial associations.
Capacity building to support policy making
PAGE, in collaboration with GIZ, has provided support to BAPPENAS in conducting an introductory training on system thinking and System Dynamics Modelling targeted at Regional Governments (Provincial Government and to some extent City/District Governments) officials and universities in the Central Indonesia region. Held in Surabaya, East Java on 28-31 October 2019, the training was attended by 222 participants.