TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati in the G20 presidency press conference on Thursday said the government would need over Rp3,500 trillion or Rp3.5 quadrillion to finance Indonesia’s transition towards green economy, or low carbon, resource efficient, and socially inclusive.

The minister presented Indonesia’s commitment towards a low carbon economy overseen by the nationally determined contribution (NDC) that results in very high costs.

Indonesia’s NDC, she explained, is 29 percent CO2 emissions reduction and 41 percent from international contribution. The government has calculated the estimated funding needs based on the contribution per sector to reduce CO2 emissions, especially with international assistance by 41 percent.

Citing Bisnis.com, the cost needed to reduce emissions with international contributions reaches Rp90 trillion for the forestry and land use sectors. Much bigger funding is needed for Indonesia to reduce 41 percent of CO2 emissions in the energy sector, which all of this totals to Rp3,500 trillion.

The high financing needs in reducing emissions in the energy sector is caused by the national electricity usage, which is mostly generated from coal-fired power plants. Moreover, the public’s electricity consumption will only continue to grow in the future.

Sri Mulyani said a combined financing sources will be needed to reach the Rp3,500 trillion, which surpasses the national State Budget (APBN) annual spending of Rp2,700 trillion.

“It would be impossible to only spend it on the energy sector,” she added.

Read: Momenatum for Green Economy

BISNIS