Indonesia Spent Rp313tn Investing in Reducing Carbon Emission
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30 March 2023 13:32 WIB
TEMPO.CO, Jakarta - Indonesia's Minister of Finance Sri Mulyani Indrawati said the Indonesian government had disbursed Rp313 trillion as of until 2021, invested in efforts to reduce carbon emissions. This figure, she said, only accounted for eight percent of the total investment that the country need.
Speaking at the Asian Development Bank (ADB) symposium in Nusa Dua, Bali, Thursday, March 30, Sri said that until 2023, Indonesia's investment needs to support the nationally determined contribution (NDC) in reducing carbon emissions is around Rp4,002 trillion or around US$281 billion.
Previously, the Government had increased its emission reduction commitment from 29 percent to 31.89 percent for domestic efforts, and from 41 percent to 43.2 percent for international assistance.
"We, the Indonesian government, have issued a number of fiscal incentives as well as innovative financing to close this gap in investment needs," she said.
The incentives include tax holidays, tax allowances, value added tax facilities (VAT/VAT) to property taxes. Indonesia also issues market instruments related to green investments, namely Green Sukuk and Sustainable Bonds (SDG Bonds) both at the domestic and international levels.
Sri hopes that the two instruments can achieve the goal of reducing emissions by 10.6 million tons of carbon dioxide (CO2).
The former Managing Director of the World Bank added that emission reduction commitments also need to be supported by carbon trading policies and carbon taxes. "This policy will use carbon trading and non-trade instruments, including carbon taxes to internalize the external costs of greenhouse emissions," she said.
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