Again, Sri Mulyani Voices Issues Of Climate Change To The Economy: Financing And Technology Are Key

Minister of Finance Sri Mulyani. (Photo: Doc. Antara)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani stated that climate change is a global challenge that is extraordinarily complex but has a very real impact on life, including the economic sector.

"The very important keys in translating commitments into real action are financing and technology," he said when speaking at a discussion forum held by Tempo, Tuesday, December 14.

According to the Minister of Finance, the action currently being taken by the working group of world finance ministers is to design the Energy Transition Mechanism (ETM).

“All countries that will definitely develop more, will need more energy or electricity. But how can the higher energy demand not be accompanied by higher or worse CO2 emissions, causing climate change to occur," he said.

In realizing ETM, continued the Minister of Finance, Indonesia also plays a role domestically together with PLN and the business world to be able to carry out affordable transition designs.

"This energy transition plan must continue to pay attention to the public so that they can get affordable electricity, as well as costs in terms of the implications of the APBN because there will be implications for subsidies or tax revenues," he said.

Apart from ETM, another source with enormous potential is to deal with climate change in terms of forestry and land use. The Minister of Finance said that President Jokowi's commitment to net zero emissions from the forestry and land use side needed to get support from the financing side.

“The most important innovation from the Ministry of Finance is to create blended finance that supports or combines various desires and resources both from the APBN, private sector, and philanthropists in Indonesia and globally, including bilateral and multilateral institutions. We must together deal with the issue of climate change consistently and fully through adequate resources," he said.

For information, Minister of Finance Sri Mulyani is a central figure in determining the carbon tax through the Tax Harmonization Law (HPP). This effort is also a response to the issue of climate change which is now becoming a global concern.

According to the VOI record, the carbon tax levy will take effect on April 1, 2022. As an initial stage, the government is targeting Steam Power Plant (PLTU) business activities that produce by burning coal. Meanwhile, the tariff imposed is Rp. 30 per kilogram of carbon dioxide equivalent (CO2e) or equivalent units.