Ministry Of Finance Affirms State Budget Concerns Overcoming Climate Change Challenges

Illustration of the Rupiah (Photo: Doc. Antara)

JAKARTA - The Ministry of Finance (Kemenkeu) stated that Indonesia is committed to fighting together the world to overcome climate change. Indonesia's commitment is stated in the Nationally Determined Contribution (NDC) to reduce the emission target from 29 percent to 31.89 percent with its own efforts, and from 41 percent to 43.20 percent with international assistance by 2030.

This is the official broadcast of the Ministry of Finance which was released today. It was stated that the Enhanced NDC is aligned with the 2050 Low Carbon and Climate Resilience Long-Term Strategy and the vision to achieve net zero emissions by 2060.

The agency led by Minister of Finance Sri Mulyani said that various efforts were made to achieve these targets, such as strengthening the collaboration of the private sector and encouraging creative financing, as well as the establishment of the Environmental Fund Management Agency (BPDLH), and SDG Indonesia One.

"In this case, the State Budget also prioritizes projects to tackle climate change and encourage climate-friendly activities. The government has implemented a Climate Budget Tagging mechanism at the national and regional levels that is able to track the allocation of climate change budgets, as well as present activity data and results," said the minutes of the Ministry of Finance, Wednesday, September 27.

On the other hand, Indonesia has issued a carbon pricing policy through carbon trading and carbon taxes through Presidential Regulation Number 98 of 2021 concerning Carbon Economic Values.

The Coordinating Minister for Economic Affairs in his official statement revealed that President Joko Widodo had launched the Indonesian Carbon Exchange which was supervised by the Financial Services Authority (OJK) through the Indonesia Stock Exchange earlier this week.

"Indonesia also introduces demand side incentives to accelerate the new and renewable and environmentally friendly energy sectors, such as electric vehicles and B35 fuel mandatory," said the Ministry of Finance.

Not only at the national level, Indonesia encourages regionally through Indonesia's leadership in ASEAN 2023 which has agreed to develop the Electric Vehicle Ecosystem and development of ASEAN Carbon Neutrality.