Minister Sri Mulyani explained that Indonesia will require Rp4,000 trillion to attain a Net Zero Emission goal.
Heaptalk, Jakarta — Indonesia’s Minister of Finance, Sri Mulyani, revealed that climate change issues currently could harm human life and the earth’s sustainability. In this context, Indonesia is also facing the consequences of the impacts of climate change, particularly in terms of economic loss for the country.
“Climate change is the greatest risk for humanity and entire countries, specifically for low-income and developing countries. The implications of climate change are even more significant and damaging,” said Minister Sri at the Indonesia EBTKE ConEx 2023 event. (07/12)
Furthermore, according to Meteorology, Climatology, and Geophysical Agency (BMKG), Indonesia has experienced a temperature increase of around 0.03 degrees Celsius and a rise in water level of 0.8 cm – 1.2 cm per year. She also delivered that Indonesia had experienced and would encounter the complex implications of climate change. Moreover, greenhouse gas emissions in the archipelago have increased by 4.3% per year since 2010.
“if climate change is allowed to continue, there will be consequences because 80% of natural disasters in Indonesia are related to hydrometeorology. This issue might demonstrate an economic loss estimation of around 0.66% – 3.45% of Indonesia’s GDP in 2030,” affirmed Sri.
Although climate change is said to have had a devastating impact, Sri said that Indonesia still has to carry out developments that will lead to an increase in energy consumption, which will lead to a rise in demand for energy due to an increasingly prosperous society and high-intensity energy consumption.
To attain a Net Zero Emission goal, the Minister of Finance estimated that this country would need Rp4,000 trillion. Meanwhile, she claimed the state budget per year is around Rp3,000 trillion. Therefore, Sri looks forward to the private sector and community support to deliver the state’s determination to reduce carbon emissions because the state budget’s contribution is only around 10%.
“In our fiscal tools, we provide incentives for the emergence of innovative financing and increase investment from the private sector to penetrate green projects and industries. The government can also provide several instruments, including tax holidays, tax allowances, VAT differentiation facilities, import duties, and land and building taxes,” Sri said in her statement.
Sri views the archipelago has numerous potential renewable energy sources, including geothermal, solar, and hydro. However, she regrets the diminutive utilization of Indonesia’s renewable energy that was only 0.5% of the total potential. For this reason, Ministry of Finance will continue to engage and listen, expecting the policy arranged to enable the overall stakeholders to realize renewable energy more optimally.
“We will continue to work with all stakeholders to prepare all platforms, from regulations to the instruments that will eventually be realized in the form of investment decisions to build the energy sector and reduce CO2 emissions and avoid climate change.” Minister Sri, in her closing statement.
