Ensure That The Preparation Of The State Budget Is In Accordance With The Challenges Of Climate Change, Sri Mulyani: These Are The New State Budget Tools

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The government through the Minister of Finance (Menkeu) Sri Mulyani Indrawati said that the management of state finances (APBN) was prepared by taking into account the opportunities and challenges of the green economy in the issue of climate change or commonly called the climate change fiscal framework.

“First, in terms of state revenue or taxation. The government uses tax regulations to be able to provide incentives for the business world so that they then see the opportunity in investing in the green economy as a good opportunity," he said in today's webinar, Tuesday, February 22.

According to the Minister of Finance, one of the concrete steps is the plan to implement a carbon tax. He said, the carbon tax can encourage the behavior of economic activities, especially the private sector to internalize economic activities in the form of carbon emissions in the calculation of investment.

“This is a new APBN tool. We will of course continue to communicate and discuss with all stakeholders, including the business world, to really increase investment in environmentally friendly fields," he said.

Furthermore, to support climate change through the State Budget, it is implemented through the expenditure side, both goods and capital expenditures. In this case, the Ministry of Finance introduced climate budget tagging or marking of government budgets dedicated to climate change.

"We have developed this climate budget tagging since 2016 and even now the government, the central government, in this case, are starting to introduce this climate budget tagging to the local government level," he said.

Meanwhile, other instruments in the APBN are through the financing side or called below the line. It is stated that the Ministry of Finance has developed green bonds, both conventional and sukuk.

"This is a way to diversify financing on the one hand from the APBN side but on the other hand it also increases real commitments regarding green activities and achieves sustainable development goals," he explained.

For information, RI's commitment to address the threat of climate change continues to be pursued through state financial instruments in order to assist the transmission of the Indonesian economy towards a greener economy. together, guarding against the possible threat of catastrophic climate change," closed the Minister of Finance Sri Mulyani.