On Sept. 23, Indonesia increased its emissions-reduction target in its enhanced Nationally Determined Contribution (NDC) document, an implementation of the 26th United Nations Climate Change Conference (COP26) deal agreed in Glasgow, Scotland, that asked parties to increase their emissions-reduction targets.

According to the enhanced NDC, Indonesia aims to reduce emissions by 31.89 percent independently or 43.2 percent with international assistance by 2030, a slight increase from the 29 and 41 percent, respectively, outlined in the first NDC target submitted in 2016 and in the updated NDC in 2021.

The forest and land use sector is expected to be the largest contributor to emissions reduction, covering about 25.4 percent of the overall reduction, or 729 tonnes of carbon dioxide equivalent. The second largest is set to be the energy sector, covering a 15.5 percent reduction, or 446 tonnes of carbon dioxide equivalent.

However, the latest emissions-reduction target is still insufficient to curb global warming, as research group Climate Action Tracker (CAT) categorized both the “fair share target” or independent and the internationally supported target as “critically insufficient”, whereby if all countries were to follow Indonesia’s target, global warming would increase by 4 degrees Celsius.

Financing emission reductions

With the forestry and energy sectors expected to be the largest contributors to emissions reduction, Indonesia has also tried to get financing for those sectors from outside sources to help it meet its targets.

In September, Indonesia and Norway signed a bilateral memorandum of understanding (MoU) on emissions reduction in the forestry sector, with Norway’s first contribution being US$56 million to support Indonesia achieving a carbon sink in the forestry sector.

In October, the Environment and Forestry Ministry and the United Kingdom’s Foreign, Commonwealth and Development Office signed an MoU on environment and climate cooperation, including support for Indonesia's forestry cartoon sink goal.

Ahead of the Group of 20 Summit in Bali in November and coinciding with the COP27 in Sharm El Sheikh; Indonesia, Brazil and the Democratic Republic of Congo announced the launch of a climate partnership with the signing of a joint statement on tropical forest cooperation and climate action.

The agreement also included the three countries working toward the negotiation of a “new sustainable funding mechanism” to help developing countries to preserve biodiversity and conserve forests, according to a Brazilian government press release.

In December, Indonesia announced a new climate partnership with the United States to launch in early 2023 with funding worth up to $50 million to help Indonesia achieve its forestry carbon sink goal by 2030.

Meanwhile in the energy sector, during the G20 Summit the Indonesia Just Energy Transition Partnership (JETP) was launched.

In the partnership, involving Indonesia and a coalition of developed countries and global private lenders led by the US and Japan, the JETP pledged to mobilize up to $20 billion to help retire Indonesia’s coal power plants, help the energy sector to reach peak emissions by 2030 and achieve net-zero emissions in the energy sector by 2050.

Some $10 billion of the program are public sector pledges in the form of grants and concessional loans from multilateral development banks and “International Partner Groups” led by the US and Japan and which include Canada, Denmark, the European Union, France, Germany, Italy, Norway and the UK.

Meanwhile, the other $10 billion will be derived from investments of private financial institutions coordinated by the Glasgow Financial Alliance for Net Zero (GFANZ).

Loss and damage funding

Despite securing financial commitments from developed countries to help reduce its emissions in the forestry and energy sectors at the COP27, Indonesia was more muted than others on the issue of loss and damage.

The climate conference concluded with one of the agreements establishing a funding mechanism to assist developing countries in responding to the loss and damage from climate change.

While Pakistan, which in 2022 chaired the Group of 77 (G77), hailed the loss and damage funding mechanism agreement with its Climate Minister Sherry Rehman calling it a response to “the voices of the vulnerable, the damaged and the lost of the whole world,” Indonesia was less thrilled. 

Environment and Forestry Ministry Director General for Climate Change Control Laksmi Dhewanthi said that for Indonesia the deal on the loss and damage funding mechanism was a step forward in implementing the Paris Agreement, however, she also pointed out that it would take time for the funding mechanism to be implemented.