BROWN TO GREEN - IESR

BROWN TO GREEN Executive Summary and Indonesia Country Profile | 2017

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This report was prepared by Swati Agarwal (The Energy and Resources Institute), Bridget Boulle (Climate Bonds Initiative),

Yann Briand (Institute for Sustainable Development and International Relations), Jan Burck (Germanwatch), Ipek Gençsü

(Overseas Development Institute), Sofia Gonzales-Zuñiga (NewClimate Institute), Markus Hagemann (NewClimate Institute),

Niklas Höhne (NewClimate Institute), Jiang Kejun (Energy Research Institute China), Gerd Leipold (HUMBOLDT-VIADRINA

Governance Platform), Karan Mangotra (The Energy and Resources Institute), Enrique Maurtua Konstantinidis (Fundación

Ambiente y Recursos Naturales), Andrew Marquard (Energy Research Center, University of Cape Town), Franziska Marten

(Germanwatch), Mia Moisio (NewClimate Institute), Keno Riechers (NewClimate Institute), Hannah Schindler (HUMBOLDT-

VIADRINA Governance Platform), Thomas Spencer (Institute for Sustainable Development and International Relations),

Fabby Tumiwa (Institute for Essential Service Reform), Thea Uhlich (Germanwatch), Jorge Villarreal (Iniciativa Climática

de México), Charlene Watson (Overseas Development Institute), Shelagh Whitley (Overseas Development Institute),

William Wills (CentroClima, Federal University of Rio de Janeiro). Responsibility for the report lies with the authors and

does not necessarily represent the opinions of their organizations.

We express our gratitude to the following contributors for their invaluable input and support: Cindy Baxter, Mona Freundt,

Joel Kenrick (European Climate Foundation), Rachel Chi Kiu Mok (World Bank), Takeshi Kuramochi (NewClimate Institute),

Alan David Lee (World Bank), Surabi Menon (ClimateWorks Foundation), Bert Metz (European Climate Foundation), Ragnhild

Pieper (European Climate Foundation), Chandra Shekhar Sinha (World Bank), Sandhya Srinivasan (World Bank), Caren Weeks,

Sebastian Wegner (HUMBOLDT-VIADRINA Governance Platform).

Suggested citation: Climate Transparency 2017: BROWN TO GREEN: THE G20 TRANSITION TO A LOW-CARBON ECONOMY, Climate Transparency, c/o Humboldt-Viadrina Governance Platform, Berlin, Germany, www.climate-transparency.org.

AUTHORS AND ACKNOWLEDGEMENTS

This report was made possible through support of

Partners of Climate Transparency:

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Alvaro Umaña and Peter Eigen

When President Trump decided to pull the US out of the Paris Agreement, his justification was that the agreement was “very unfair” to the US. The question of whether the Paris Agreement is fair and whether countries are delivering what is needed to meet the long-term objective is a hugely important one. While most people and states agree about “holding the increase in the global average temperature to well below 2°C” and “to pursue efforts to limit the temperature increase to 1.5°C,” a common understanding that burdens and benefits are shared fairly will be crucial for governments.

The ability to compare what governments do with what is required to meet the long-term objective is even more im-portant, as the Paris Agreement has a bottom-up architecture, where countries independently define what their contributions should be, depending on their national circumstances.

Our Brown to Green Report provides politicians, business leaders, experts, media and civil society with the information with which they can easily compare G20 government climate action, and whether their effort is sufficient to stay under the well below 2°C/1.5°C limit. Our report is comprehensive, yet concise enough that the non-expert and those with limited time gain a clear insight.

When we founded Climate Transparency in 2014, we were driven by our own personal experiences as Minister for Environment in Costa Rica and as founder of Transparency International. As a minister, you have to deal with many policy challenges simultaneously and you therefore are reliant on credible and precise information for making informed decisions. Country comparisons are crucial to develop a better understanding of what other countries in the region are doing and how Costa Rica could learn from them.

Transparency has been a powerful tool for civil society to combat corruption. The yearly Corruption Perception Index of Transparency International – ranking countries according to their perceived levels of corruption – has demonstrated that governments care about their reputation. Repeatedly, governments have responded to Transparency International, signalling they would be raising anti-corruption measures.

These experiences motivated and guided us, when we were thinking about describing government climate action. Global greenhouse gas emissions will need to peak in the near future, and be reduced to net zero soon after 2050 to meet the well below 2°C or 1.5°C limit under the Paris Agreement. Even a cursory look at the present government commitments shows that this limit will be far exceeded unless they step up their ambition.

For this reason, we decided to bring together experts from around the world to produce an annual report of the G20 countries’ climate actions. For good reason, we call the report “Brown to Green”. The laudable efforts for more green investments will only help the climate if they are coupled with a drastic reduction in investments in “brown” fossil fuels.

The G20 countries are well positioned to provide the needed leadership for this transition. They account for 85% of global GDP and 80% of worldwide CO2 emissions. According to IRENA-IEA, these countries are also home to 98% of global installed capacity of wind power, 97% of solar power and 93% of electric vehicles.

We rely on publicly available information, but, of course, we know that the choice of what information to use involves judgment calls. And the judgment of even the most scientifically minded expert can be influenced by national and institutional perspectives. We are proud to say that our partnership has significantly grown over the last year and now includes experts and institutions from Argentina, Brazil, China, France, Germany, India, Indonesia, Mexico, South Africa and the UK. And we believe that the convergence of these global perspectives together with a commitment to work according to scientific standards leads to credible information.

Article 13 of the Paris Agreement mandates an “enhanced transparency framework”. This transparency framework is crucial to track the actions undertaken by countries as well as the financial, technological and capacity-building support provided. A global stocktake every five years will determine whether national contributions add up to remain well below 2°C/1.5°C and is supposed to lead to strengthening the plans of countries.

Our Brown to Green report complements the UNFCCC transparency mechanism. It reports on countries’ progress

TRANSPARENCY AND COMPARABILITY ARE DRIVERS FOR MORE AMBITIOUS CLIMATE ACTION

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once a year – a shorter interval than the Paris Agreement demands. In contrast to government technical reporting, it provides easily accessible and independent information for politicians, policy makers, civil society, media and non-climate experts that can stimulate the national debates to increase ambition. By driving transparency, we support the building of trust and confidence among countries.

The German G20 Presidency has put climate change high on the agenda. And while President Trump withdraws from the Paris Agreement, we can observe positive decarbonisation developments in many countries, even the US.

The Brown to Green Report 2017 is Climate Transparency’s third report published on the eve of the G20 summit. We are proud to present several changes to last year’s report that improve our analysis on how well G20 countries are transitioning towards a low-carbon economy:

• For the first time, the Brown to Green report sheds light on the decarbonisation developments per sector in each G20 country.

• We have strived to refer to the well below 2°C and aiming for 1.5°C benchmark where possible. In some cases – for example the adequacy analysis of the Nationally Determined Contributions – only measurements based on 2°C are available. We are aware that these do not reflect the Paris Agreement goals and efforts have to go further, and we are aiming to adjust our analysis accordingly next year.

• The finance section of the report has been extended, now also presenting information on green bonds, public finance invested in fossil fuels, effective carbon prices and a more detailed account of climate finance.

We hope our transparent and comparable information can be a powerful tool to stimulate a race to the top in climate action.

Peter Eigen

Founder and Chair of the Advisory Council of Transparency International, and Co-Founder of the HUMBOLDT-VIADRINA Governance Platform

Alvaro Umaña

Former Minister of Environment and Energy of Costa Rica, and former Ambassador of Costa Rica to the United Nations Copenhagen Climate Change Conference

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G20 countries account for 75% of global greenhouse gas emissions and about 82% of global energy-related CO2 emissions (2014).1 If present emission trends were to continue, global temperatures would increase between 3 and 4°C.2 The consequences for the world would be dramatic.

Because they are the biggest contributors, the G20 governments have a special responsibility to act on climate change, using their economic strength to lead the transition to a low-carbon economy.

The necessity to protect the climate is not simply a burden, it coincides with other urgent needs and offers substantial benefits. The industrialised world’s ageing energy system needs massive investments, and many people without – or with only limited access to energy – require more non-polluting energy for a decent, healthier life. Moving from a “brown” economy based on fossil fuels to a sustainable “green”

economy creates jobs and fosters innovation. Moving away from fossil fuels in energy production, transport and industry would dramatically reduce air pollution and increase public health for billions of people.

The G20 countries as a whole have made big efforts to reduce their impact on climate. They have started the transition from brown to green, but are in an early phase. Present efforts are neither sufficient in speed – nor in depth – to keep global warming to the limit set in the Paris Agreement: “holding the increase in the global average temperature to well below 2°C” and “to pursue efforts to limit the temperature increase to 1.5°C”.

E X E C U T I V E S U M M A R Y

THE G20 IS DECARBONISING, BUT TOO SLOWLY

1) PRIMAP (2017), https://www.pik-potsdam.de/research/climate-impacts-and-vulnerabilities/research/rd2-flagship-projects/gia/primap/primap and IEA (2017): “CO2 Emissions from Fuel Combustion”, https://www.iea.org/statistics/relateddatabases/co2emissionsfromfuelcombustion/

2) Rogelj, J., den Elzen, M., Höhne, N., Fransen, T., Fekete, H., Winkler, H., Schaeffer, R., Sha, F., Riahi, K. & Meinshausen, M. (2016). “Paris Agreement climate proposals need a boost to keep warming well below 2 °C”, Nature, 534(7609), 631–639, http://doi.org/10.1038/nature18307

https://www.iea.org/statistics/relateddatabases/co2emissionsfromfuelcombustion/

http://doi.org/10.1038/nature18307

% G20 annual variation

1990 1995 2000 2005 2010 2014

120

100

80

60

40

20

0

- 20

- 40

GDP PPP

Energy-relatedCO2 emissions

Energy-related CO2 emissions per capita

Carbon intensityof the energy sector

Carbon intensityof the economy

Energy intensityof the economy

GHG emissionsGHG

G20 keyindicators(1990-2014)

-30 %-27 %

+3.5%

Carbonintensity

of theenergysector

Energyintensityof the

economy

Carbonintensity

of theeconomy

G20 key indicators in 2014

+7.1 %

-0.2 %

+1.3%

GHG

Energy-related

CO2

emissions

GHG emissions

GDP PPP

% G20 annual variation

1990 1995 2000 2005 2010 2014

120

100

80

60

40

20

0

- 20

- 40

GDP PPP






GHG emissionsGHG


-30 %-27 %

+3.5%

Carbonintensity

of theenergysector


economy

Carbonintensity

of theeconomy


+7.1 %

-0.2 %

+1.3%

GHG

Energy-related

CO2

emissions

GHG emissions

GDP PPP% G20 annual variation

1990 1995 2000 2005 2010 2014

120

100

80

60

40

20

0

- 20

- 40

GDP PPP






GHG emissionsGHG


-30 %-27 %

+3.5%

Carbonintensity

of theenergysector


economy

Carbonintensity

of theeconomy


+7.1 %

-0.2 %

+1.3%

GHG

Energy-related

CO2

emissions

GHG emissions

GDP PPP

If the climate objectives are to be met, the carbon intensity has to reduce substantially.

According to the International Energy Agency, global energy-related CO2 emissions stalled in 2014 for the first time and were kept almost constant also in 2015 and 2016.

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STILL RISING, BUT ENERGY-RELATED CO2 EMISSIONS HAVE STALLED

The G20 countries’ greenhouse gas emissions3 grew by 34% between 1990 and 2014.4 Yet, in the same period their economies grew more, by nearly 117%, demonstrating that G20 countries are using energy resources more efficiently than in the past.

There are signs of an absolute decoupling of emissions and economic growth (i.e. declining emissions with a growing economy) within the G20. According to the International Energy Agency, global energy-related CO2 emissions stalled

in 2014 for the first time and were kept almost constant also in 2015 and 2016.5 This trend is confirmed by other estimates.6

To stay within the Paris Agreement limits, G20 emissions need to be drastically reduced – a peak needs to be reached by 2020 and CO2 emissions need to decline to net zero by around 2050.7

GREENHOUSE GAS (GHG) EMISSIONS DEVELOPMENT


3) Including Land Use, Land Use Change and Forestry (LULUCF) emissions4) PRIMAP (2017), https://www.pik-potsdam.de/research/climate-impacts-and-vulnerabilities/research/rd2-flagship-projects/gia/

primap/primap5) IEA (2017): “IEA finds CO2 emissions flat for third straight year even as global economy grew in 2016”, https://www.iea.org/

newsroom/news/2017/march/iea-finds-co2-emissions-flat-for-third-straight-year-evenas-global-economy-grew.html6) The Global Carbon Project (2017), http://www.globalcarbonproject.org and BP (2017), http://www.bp.com/en/global/corporate/

energy-economics/statistical-review-of-world-energy.html7) Rogelj, J., Luderer, G., Pietzcker, R. C., Schaeffer, M., Krey, V., & Riahi, K. (2015): “Energy system transformations for limiting end-of-

century warming to below 1.5°C”, Nature Climate Change, 5, 519–527, http://doi.org/10.1038/NCLIMATE2572

KEY INDICATORS ON THE G20 TRANSITION TO A LOW-CARBON ECONOMY

Source: IEA, 2016; PRIMAP, 2017; World Bank, 2017

https://www.pik-potsdam.de/research/climate-impacts-and-vulnerabilities/research/rd2-flagship-projects/gia/primap/primap

https://www.pik-potsdam.de/research/climate-impacts-and-vulnerabilities/research/rd2-flagship-projects/gia/primap/primap

https://www.iea.org/newsroom/news/2017/march/iea-finds-co2-emissions-flat-for-third-straight-year-ev

https://www.iea.org/newsroom/news/2017/march/iea-finds-co2-emissions-flat-for-third-straight-year-ev

http://www.globalcarbonproject.org

http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html

http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html

http://doi.org/10.1038/NCLIMATE2572

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GREENER, YET STILL TOO BROWNG20 economies are becoming more efficient – both the energy intensity and the carbon intensity of the economies are decreasing.8 As both energy consumption and the economy have grown, the higher efficiency has not been sufficient to lead to an overall reduction in greenhouse gas emissions.

The carbon intensity of the energy sector (CO2/Total Primary Energy Supply (TPES)) in the G20 has been slightly increasing between 1990 and 2014 as the growing energy demand has been partly satisfied with coal. The needs of developing countries will require an increase of their total primary energy supply. If the climate objectives are to be met at the same time, the carbon intensity has to reduce substantially. During recent years, there has been a decreasing trend for more than half of the G20 countries (Argentina, Australia, the EU, France, Italy, Mexico, Republic of Korea, Russia, Turkey, the UK and the United States).

Renewable energy is on the rise, but coal and other fossil fuels still dominate in the G20’s energy mix.

HIGH ON POLICY DEVELOPMENT, LOW ON AMBITION AND IMPLEMENTATIONAll G20 governments have put forward mitigation targets and introduced national climate policies in different sectors. In most countries, policy frameworks are quite comprehensive. But 2020 targets and the initial Nationally Determined Contributions filed with the Paris Agreement are insufficient to limit global warming to well below 2°C, let alone to the 1.5°C target, as mandated in the Paris Agreement.

After the great success of the adoption and the fast entry into force of the Paris Agreement, the real challenge is in implementing measures at home. This is reflected in the fact that experts from many G20 countries have ranked their government’s performance in international policy processes (being constructive in the international climate negotiations) higher than their national climate policy performance, where they are criticised for their inadequate ambition and implementation. China, Brazil, France, Germany, India, Mexico and South Africa receive high scores for both their national and international climate policy performance. After the change in the US government, the US's national and international policy performance has been rated down by experts from high to very low.

8) See graph in Executive Summary

CLIMATE POLICY PERFORMANCE DECARBONISATION

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9) Bhattacharya, A., Meltzer, JP., Oppenheim, J., Qureshi, Z. & Stern, N. (2016): “Delivering on sustainable infrastructure for better development and better climate. Brookings Institution”, https://www.brookings.edu/wp-content/uploads/2016/12/global_122316_delivering-on-sustainable-infrastructure.pdf

10) Frankfurt School-UNEP Centre/BNEF (2017), “Global Trends in Renewable Energy Investment 2017”, http://fs-unep-centre.org/publications/global-trends-renewable-energy-investment-2017

11) Bast, E., Doukas, A., Pickard, S., van der Burg, L., Whitley, S. (2015): “Empty Promises. G20 Subsidies to Oil, Gas and Coal Production.”, https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9958.pdf

FINANCING THE TRANSITION


G20 GOVERNMENTS CONTINUE TO SUBSTANTIALLY FINANCE BROWN INFRASTRUCTUREInvestments

Globally, total investment required in infrastructure over the next 15 years is estimated to be around US$ 80-90 trillion. To make this investment compatible with a 2°C target initially requires a higher investment of about 5% which pays off over time.9 Countries need to scale up public and private financial flows, and to redirect flows from brown to green.

G20 countries are attractive for renewable energy investments, with notable differences between countries. Investment attractiveness is particularly high in China, France, Germany and the UK. Green bonds, while still only a small part of the G20 debt market, have shown strong growth rates in recent years, particularly in China.

Global capacity for renewable energy production has increased faster than ever in 2016, and thanks to significant price drops lower investments were needed than in the previous year.10 Overall more green capacity was added than brown.

The emissions intensity of electricity production from capacity that was installed in 2016 indicates how green or brown recent investments have been. For G20 countries that mainly installed renewables or other low-carbon sources, the average emissions intensity of new investments in the power sector ranges between 0 to 0.2 tCO2/MWh, e.g. in Italy, France, Germany, and the US. Australia and South Africa also had a low emissions intensity in 2016, but added significant coal capacity in the years prior to 2016. Countries with a high share of new capacity from emissions-intensive coal (often alongside investments in renewables) are in the order of 0.5 to 0.8 tCO2/MWh, such as China, India, Korea and Indonesia. Saudi Arabia has an equally high emissions intensity with added oil and gas capacity.

Public institutions are lagging behind: G20 countries’ public finance institutions, such as national and international development banks, majority state-owned banks and export credit agencies, spent over US$ 88 billion on average annually on coal, oil and gas projects between 2013 and 2014.11 Among G20 countries, the highest levels of public finance for fossil fuels come from Japan and China, who provided about US$ 19 billion and US$ 17 billion a year between 2013 and 2014, respectively.

Fiscal policies

The G20 countries are not living up to their long-standing and repeated commitment to phasing out fossil fuel subsidies. Based on data from the OECD and IEA, in 2014, G20 countries provided over US$ 230 billion subsidies to coal, oil and gas.

More carbon pricing mechanisms have been introduced in recent years. However, carbon prices and effective carbon rates, which take into account various energy taxes and carbon pricing schemes remain too low in G20 countries to encourage a substantial shift to a low-carbon economy.

Provision of international support

Key to building trust and faith in the UNFCCC negotiations between developed and developing nations is the provision of international climate finance. The G20 countries with obligations under the UNFCCC include some of the biggest contributors of international public finance to developing countries. Japan, France, Germany, UK and the US each provided between US$ 8.4 billion and US$ 1.2 billion per year in 2013-2014 amounting to between 0.2 and 0.02% of GDP. Australia, Canada and Italy provided less climate finance during this period, both in absolute terms and relative to GDP. President Trump has announced the US will cease its funding altogether.

https://www.brookings.edu/wp-content/uploads/2016/12/global_122316_delivering-on-sustainable-infrastructure.pdf

http://fs-unep-centre.org/publications/global-trends-renewable-energy-investment-2017

http://fs-unep-centre.org/publications/global-trends-renewable-energy-investment-2017

https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9958.pdf

https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/9958.pdf

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ARGENTINAArgentina’s performance rates medium in the category of greenhouse gas emissions per capita and low in the category of energy use per capita compared to other G20 countries. The share of renewables in Argentina’s energy supply is above G20 average, with an upward trend in absolute renewable energy supply. Investment attractiveness for renewable energy is in the middle range of the G20.

After a long period of virtually no climate policy activity, and an election, Argentina is now catching up. A discussion on the long-term strategy has started, as Argentina remains one of the few G20 countries without a national climate strategy beyond its NDC. A new renewable energy law, two successful, large-scale renewable energy tender rounds in 2016, coupled with a gradual phase-out of fossil fuel consumption subsidies, show a fresh commitment to clean technologies.

Argentina has been heavily investing in the exploration and development of new reserves of oil and gas in recent years. It separately provides financing through its public institutions, which spent, on average, US$ 2 billion on fossil fuels a year between 2013 and 2014. Argentina‘s experts continue to rate their country’s policy performance in many sectors as low, and have demanded more ambitious and sector-specific targets.

AUSTRALIAAustralia’s performance in the greenhouse gas emissions per capita category rates medium. Its performance for all other decarbonisation indicators is low – or even very low. Australia has the fifth highest share of coal in energy supply in the G20, and it continues to subsidise the production and consumption of fossil fuels. Yet, its investment attractiveness for renewable energy ranks in the higher middle range. In 2016, Australia’s investments in renewables reached record numbers.

Experts rate Australia’s climate policy performance very low. They acknowledge Australia’s progress in developing enhanced renewable energy schemes and energy efficiency programs, particularly in the residential building sector, but criticise the government’s overall lack of ambition in climate policies and its continued support for coal.

Australia provides less than 0.01% of GDP on international climate finance – it ranks fifth of the eight G20 countries obliged to provide climate finance.

The Australian climate policy has been characterised by significant uncertainties during recent years. The government abolished the Australian carbon price mechanism in 2014.

BRAZILBrazil heads the G20 rating on performance of greenhouse gas emissions per capita, taking into account the trend and level, also in relation to a "well below 2°C" benchmark. Brazil’s performance in energy use per capita rates medium. Its share of renewable energy is by far the highest in the G20 (38%).

Brazil’s investment attractiveness for renewable energy is in the middle field of the G20. Economic recession and political instability have led to a sharp decline in energy demand causing the A-3 wind and solar auction in December 2016 to be cancelled. The end of financing of oil and coal-fired power plants by the Brazilian Development Bank (BNDES) will have an effect on future investments.

National experts rate Brazil’s policy performance high: while acknowledging developments in renewable energy and the forest sector, they demand more ambitious emissions and efficiency targets. A plan for phasing out fossil fuel subsidies and an effective carbon price signal are still missing. Brazil’s fossil fuel subsidies amounted to US$ 27 billion in 2014 (one of the highest levels of support in the G20). Financing of fossil fuel projects through public institutions was, on average, US$ 3 billion a year in 2013 and 2014.

CANADACanada performs very low in the two categories of greenhouse gas emissions and energy use per capita – it has the highest greenhouse gas emissions per capita and the highest energy use per capita in the G20. While hydropower dominates its power sector, Canada has the G20’s second-highest rate of new wind energy installations.Experts rate the climate policy performance of Canada’s government medium. They give credit to their government for developing the Pan-Canadian Framework on Climate Change and Clean Growth that sends a signal for a strengthened climate policy.Although Canada has cut some subsidies to exploration, it continues to subsidise the production and consumption of fossil fuels. In addition, Canadian public finance institutions provided, on average, about US$ 3 billion a year for fossil fuels between 2013 and 2014. While official OECD estimates only report US$ 114 million of subsidies in 2014, other research finds that subsidies to coal, oil and gas production, including through public finance institutions, total US$ 1.6 billion.13

Canada's provision of international climate finance is lower than 0.01% of its GDP, ranking second-last within the G20 countries obliged to provide climate finance under the UNFCCC.

12) The country overview summarises the main findings of the report. Its main sources are Allianz Climate and Energy Monitor (2017), CAT (2017), CCPI (2017), Climate Bonds Initiative (2017), OECD (2017), OCI & NRDC (2017) and RECAI (2017).

13) Touchette and Whitley (2015), “G20 subsidies to oil, gas and coal production: Canada”, https://www.odi.org/publications/10091-g20-subsidies-oil-gas-coal-production-canada

COUNTRY OVERVIEW 12

https://www.odi.org/publications/10091-g20-subsidies-oil-gas-coal-production-canada

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CHINAChina’s performance rates low in the categories of greenhouse gas emissions per capita, energy intensity of the economy, carbon intensity of the energy sector, energy use per capita and share of coal in energy supply.

Yet experts rate its current policy performance high compared to other G20 countries. On an international level, China has assumed a strong leadership role. National experts stress China’s rapid expansion of renewable energy and the possibility of CO2 emissions peaking before 2030, earlier than planned. The country is swiftly decommissioning coal power plants and aims to increase its renewable energy capacity by 38% above 2015 levels by 2020. China‘s coal use started to decline from 2014, and it is believed this trend will continue. China has the highest subsidies for electric cars within the G20.

China rates as having one of the G20’s highest levels of investment attractiveness for renewable energy. The first Chinese green bonds were issued in late 2015, but substantial growth has since made China 2016’s largest single green bond issuing country.

However, Chinese public finance institutions spent US$ 16 billion – the second highest amount in the G20 – on fossil fuel projects between 2013 and 2014. A change in fiscal policies is still needed: the Chinese government continues to subsidise its fossil fuel industry, including coal. Encouragingly, China plans to implement a national Emissions Trading System in 2017, in addition to the pilot ETS’s now running in several regions. China reports increasing provision of international public finance to a number of developing countries, although annual data on the scale or nature of such contribution is not available.

EUROPEAN UNIONThe European Union rates high in the categories of green-house gas emissions per capita and energy use per capita.

Experts rate its climate policy performance medium. The EU and many of its member states are currently failing to deliver on their mitigation targets. According to experts, policies are not ambitious enough to stay well below the limit of 2°C or 1.5°C warming. Nevertheless, the EU‘s role in the negotiations leading to the Paris Agreement and especially its reaction to the US's exit from the accord indicates that the EU can assume a leadership role.

The EU has been the largest issuer of green bonds (US$ 76 billion) breaking new boundaries in 2017 through sovereign issuance, green bond funds and exchange-traded funds. Efforts are being made to provide greater price stability and predictability in the EU Emissions Trading System. The

European Commission has repeatedly asked Member States to phase out fossil fuel subsidies by 2020, and they have committed to developing plans to do so. The EU has also committed to remove subsidies to hard coal mining by 2018. However, the EU has not established a mechanism for tracking progress on these pledges.

FRANCEFrance’s performance in the greenhouse gas emissions per capita category is very high. It has the third lowest level of emissions per capita in the G20, with a decreasing trend during recent years. The country performs high in the category energy use per capita.

Experts give France a high score for its policy performance. They expect President Macron to uphold the targets set by the previous administration. France is one of the few G20 countries that has submitted a long-term emissions-development strategy to the UNFCCC, and has a national strategy for near-zero energy buildings (as part of EU policies).

France is one of the G20 countries that is highly attractive to renewable energy investment. It aims for a decarbonisation of its electricity sector by 2050, although its renewable energy target remains relatively unambitious. France continues to support fossil fuels, most notably through consumption subsidies for diesel.

France is a frontrunner in green finance: it has the highest market penetration of green bonds within the G20. In early 2017, it issued its first green sovereign bond at EUR 7 billion. France is also the G20’s second largest donor of bilateral climate finance relative to GDP.

GERMANYGermany ranks relatively low in the indicator for the level of greenhouse gas emissions per capita due to its high share of coal in energy supply.14 It has a medium score in the energy use per capita category. Its absolute coal supply has increased in recent years by 11% (2009-2014). It continues to provide significant subsidies to coal and, while it plans to end subsidies to coal production by the end of 2018, it has recently introduced new subsidies for coal-fired power.15

Germany’s public investment to fossil fuels was, on average, about US$ 3 billion a year between 2013 and 2014.

Experts rate Germany’s policy performance high, but point to the need to improve its sectoral targets and to an adequate phase-out for coal. Germany is one of the few G20 countries that submitted a long-term low-emission development strategy to the UNFCCC and has a national strategy for near-zero energy buildings (as part of EU policies).

14) Germany’s performance rates high in the overall category of greenhouse gas emissions per capita which is based on three indicators: 1) level of greenhouse gas emissions per capita in 2014, 2) recent development of emissions between 2009-2014 and 3) the recent level compared to a well below 2°C pathway. From 2014 onwards there was no positive emission trend.

15) Whitley et al. (2017): “Cutting Europe’s Lifelines to Coal”, https://www.odi.org/sites/odi.org.uk/files/resource-documents/11494.pdf

https://www.odi.org/sites/odi.org.uk/files/resource-documents/11494.pdf

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Investment attractiveness for renewable energy is very high in Germany. It has the G20’s highest effective carbon rate, but this is still too low to meet the Paris Agreement goals. Germany provides the G20’s third largest amount of international climate finance relative to GDP.

INDIAIndia receives high ratings for its performance in the category of greenhouse gas emissions per capita, and very high ratings in the category of energy use per capita. It has the G20’s lowest levels of greenhouse gas emissions and energy use per capita.Despite a growth in renewable energy over recent years, coal is dominant in India’s primary energy supply above G20 average. Given the recent transitions in the power sector, India is witnessing an opportunity to stop building any inefficient coal power plants till 2022, and add massive renewable based capacity of 175GW by the same year. Its investment attractiveness for renewable energy is relatively high. India is the only country in the G20 that has announced to end the sale of fossil fuel cars by 2030, thus out-performing the G20 in the personal transport sector. However, it continues to support consumption of diesel, LPG and kerosene, as well as production of oil, gas and coal, although the support for coal has been decreasing.

INDONESIAIndonesia’s performance rates medium in the category of greenhouse gas emissions per capita, and very high in the category of energy use per capita – it has the G20’s second lowest level of energy use per capita. Its share of renewables in energy supply (8.5% in 2014) is above the G20 average. There is barely any growth in absolute renewable energy supply and absolute coal supply is increasing.According to national experts, Indonesia has to improve its forest protection policies: it has the G20’s highest deforestation-related emissions. In addition, support schemes for renewable energy in the electricity sector and a carbon price signal have to be enhanced. In comparison to other G20 countries, Indonesia’s investment attractiveness for renewable energy is rated low: 2016 saw a small increase in installed capacity of geothermal and solar PV. Indonesia’s overall renewable energy capacity remains low. Indonesia lags behind other G20 countries in installed wind and solar PV capacities, and in attracting major global renewable energy businesses.Indonesia’s fossil fuel subsidies are one of the G20’s highest, and and represented a substantial part of the government's budget in 2014. Since 2014, there has been progress in phasing out fossil fuel subsidies partly due to fiscal pressures. On the other hand, Indonesia has plans to expand its coal plant construction.16

ITALYItaly’s performance in the categories of greenhouse emissions per capita, and energy use per capita rates very high due to a reduction in emissions and energy use over recent years. Italy’s share of renewable energy (15%) in energy supply is above the G20 average.Italy’s investment attractiveness for renewable energy ranks in the lower mid-range of G20 countries. Having already surpassed its 2020 target for renewable energy, its future pathway is unclear as its 2030 Energy Strategy is still under preparation. There is no strategy on how Italy plans to implement competitive bidding for large-scale renewables as set by the EU. Little new net renewable energy capacity has been installed since 2013.Following a stable period, the amount of support dedicated to fossil fuel consumption in Italy has also risen sharply since 2012 – to more than US$ 4.6 billion in 2014.This trend is also reflected in the expert rating of Italy’s climate policy performance: National experts criticise the fact that the focus of energy policy is still mainly on fossil fuels. National and international climate policy continues to be uninspired, and lacks proactivity. Yet, Italy‘s performance in hosting the G7 – and prioritising climate protection on the G7 agenda – was seen as a good first step.Italy provides the G20’s lowest levels of international climate finance relative to its GDP.

JAPANJapan’s performance in the category of greenhouse emissions per capita ranks very low. Its emissions are above the G20 average and have shown an increasing trend over the last years. In contrast, it performs high in energy use per capita.National experts rank Japan’s policy performance very low due to the reactivation of nuclear energy as the main alternative to fossil fuels, instead of sufficiently promoting renewable energy.Japan’s investment attractiveness for renewable energy performs in the middle range of the G20. Japan has extended its feed-in tariff scheme for wind until 2019, further supporting the strong investments in the technology. Investments in solar energy may be decreasing after the government switched from feed-in tariffs to auctions and a focus on smaller rooftop projects. Japan has two subnational Emission Trading Schemes as well as a national carbon tax - in place since 2012.Japan provides the G20’s highest amount of international climate finance relative to GDP – most of it as bilateral funding (including efficient coal technologies). However, Japan also spent the highest amount of public finance on fossil fuels in the G20 – an average of US$ 19 billion a year between 2013 and 2014. Moreover, the Japanese government provides subsidies to oil

16) CAT (2015): “The Coal Gap: planned coal-fired power plants inconsistent with 2°C and threaten achievements of INDCs, http://climateactiontracker.org/assets/publications/briefing_papers/CAT_Coal_Gap_Briefing_COP21.pdf

http://climateactiontracker.org/assets/publications/briefing_papers/CAT_Coal_Gap_Briefing_COP21.pdf


12


and gas production, mainly to Japanese companies operating overseas.

KOREA, REP.The Republic of Korea performs very low in the category of greenhouse gas emissions per capita and the category of energy use per capita. Current levels of both categories are above the G20 average and too high compared to a well below 2°C benchmark. Its share of coal in energy supply is about 36%, above G20 average.Experts rate its climate policy performance low. Yet, Korea’s new president has announced greater efforts in reducing greenhouse gas emissions and promoting renewable energy. He has temporarily closed ten coal-fired plants.17

The Republic of Korea’s investment attractiveness for renewable energy ranks in the G20’s lower middle field. Total wind and solar PV capacity increased in 2016. Overall, levels of market capacity and maturity for renewables remain low, with a marginal share of renewables in the generation mix.The Republic of Korea spent the third largest amount of public finance in the G20 on fossil fuels – an average of US$ 10 billion a year between 2013 and 2014. Separately, the government subsidises fossil fuels, mainly through tax breaks for gasoline. While the Republic of Korea planned to phase out subsidies to coal production by 2020, it has introduced new subsidies for oil refineries.While the Republic of Korea has no obligation to provide climate finance under the UNFCCC, it reports US$ 0.19 billion in support to other developing countries and has supported the Green Climate Fund (GCF) with pledges of US$ 100 million.

MEXICOMexico has a relatively high performance in the categories of greenhouse gas emissions per capita and energy use per capita. Its share and growth rates of renewable energy re-main below the G20 average, despite significantly increasing the amount of renewable energy capacity installed in 2016 compared to previous years.

Mexico is one of the few G20 countries that has submitted a long-term low-emissions development strategy to the UNFCCC. Unlike most G20 countries, it has no energy efficiency standards in the industry sector. Overall, Mexico receives a positive policy performance rating from national experts, but they criticise its mitigation strategy for 2050 for not containing an implementation roadmap, and the fact that it does not provide clear measures and actions of how to comply with the emission reduction targets set in its Climate Change Law.

Mexico has recently improved its support policy for renewable energy. Its investment attractiveness for renewables is in the middle range of the G20 due to its low market absorption capacity and general investment conditions. A carbon tax was introduced in 2014, which applies to fossil fuels but exempts natural gas. In 2016, it announced plans to establish a national carbon market in 2018, and expressed a strong interest in a North American carbon market. However, it continues to subsidise its oil and gas industry through tax breaks and budgetary support. Although without obligation, it has made a voluntary contribution to the Green Climate Fund.

RUSSIARussia performs comparatively low in the categories of greenhouse gas emissions per capita and energy use per capita. It has the fifth highest level of greenhouse gas emissions per capita in the G20.

Experts rate Russia’s climate policy performance low. They criticise the fact that the focus of its national energy strategy is still on fossil fuels and, while there are some approaches to improve renewable energy and energy efficiency, implementation is still slow.

The government provides significant subsidies to oil and gas producers, and has stalled plans to reduce consumption subsidies by raising fuel prices. Separately, it provided an average of US$ 7 billion a year of public finance for fossil fuel energy between 2013 and 2014.

The investment attractiveness for renewable energy in the country is low with a negligible amount of installed renewables capacity.

SAUDI ARABIASaudi Arabia performs very low in the categories of greenhouse gas emissions and energy use per capita. It has the G20’s second highest energy use per capita.

Saudi Arabia’s climate policy performance assessed by national experts is rated very low. They stress that the government continues to rely on its oil reserves instead of exploiting the high potential for renewable energy.

Saudi Arabia’s investment attractiveness for renewable energy is very low and in 2016 no new renewable energy capacity was installed. Saudi Arabia recently announced it would seek to invest US$ 30-50 billion in renewables by 2030, but there are doubts whether it can achieve these plans.18

Saudi Arabia provides the largest amount of fossil fuel subsidies in the G20. Separately, it spent an average of US$ 7 billion of public finance on fossil fuels a year between 2013 and 2014 – the fourth highest amount in the G20.

17) Reuters (2017): “South Korea plans energy U-turn away from coal, nuclear”, http://www.reuters.com/article/us-southkorea-politics-energy-idUSKBN18V0EH18) Saha, S. & Livingston, D. (2017): “Saudi Arabia’s Renewable Revolution”, https://www.foreignaffairs.com/articles/saudi-arabia/2017-06-06/saudi-arabias-renewables-revolution

http://www.reuters.com/article/us-southkorea-politics-energy-idUSKBN18V0EH

https://www.foreignaffairs.com/articles/saudi-arabia/2017-06-06/saudi-arabias-renewables-revolution

13


SOUTH AFRICASouth Africa’s performance ranks medium in the category of greenhouse gas emissions per capita. Its emissions per capita have increased slightly since 2009. South Africa ranks medium for its energy use per capita.Despite an increase in absolute renewable energy supply, South Africa has the highest share of coal in the G20.South Africa is one of the few G20 countries that has no emissions performance standards for cars. Yet, national experts rate South Africa’s policy performance as high, valuing the sectoral approaches for achieving its national targets, as well as its contribution to the international climate negotiations. South Africa aims to implement a carbon price, but its start date has been delayed.South Africa’s investment attractiveness is ranked in the middle range of the G20. Given the current unwillingness of South Africa’s national utility Eskom to sign further Power Purchase Agreements, uncertainty among investors remains. The government provides tax breaks for some liquid fuels users, and subsidises some fossil fuel exploration and production.

TURKEYTurkey performs medium among G20 countries in the categories of greenhouse gas emissions and energy use per capita. It has the sixth highest share of coal in energy supply in the G20, with an increasing trend.Experts rank Turkey’s national climate policy and international policy last and second to last in the G20. They criticise the lack of Turkey’s energy efficiency targets and remark that the funding of most of the climate protection projects comes from international institutions rather than national budgets.The investment attractiveness for renewable energy in Turkey is very low. Turkey increased both its solar PV and wind capacity in 2016. Yet, recently the government provided significant subsidies to fossil fuels, mainly to the coal industry, including through the state-owned coal company, which has created uncertainties about the future of renewables. Turkey plans a significant expansion of coal-fired power plants.19

UKThe UK performs very high in the categories of greenhouse gas emissions and energy use per capita – both levels have decreased during recent years. The UK has had one of the highest recent growth rates in absolute renewable energy supply, although its share of renewable energy in energy supply remains below G20 average.Experts rate the UK’s climate policy performance as low.

The government has failed to deliver a policy framework for renewables from 2017 onward; the UK Treasury expects investment in renewables to fall by 96% by 2020. The continuation of several other important policies, including zero carbon homes, also seems to be at risk.The investment attractiveness for renewables in the UK is high. Yet, this is expected to decline due to the recent rollback on policies supporting renewable energy. The UK is one of the few G20 countries with no renewable energy target beyond 2020.By reducing taxes and increasing subsidies to oil and gas production, the UK is the only G7 country that has sharply increased fossil fuel support in recent years. However, the UK claims it has no fossil fuel subsidies, basing that claim on its own definition.The UK provides the G20’s fourth highest level of international public climate finance relative to GDP, and the highest amount through multilateral climate funds. Between 2013 and 2015, however, it has spent an average of about US$ 6 billion a year of public finance on fossil fuels.

UNITED STATESThe United States performs very low in the category of greenhouse gas emissions and low in the category of energy use per capita. It has the G20’s fourth highest level of greenhouse gas emissions per capita and the highest level of energy use per capita.After the change in the federal government, national experts have rated both the US' national and international climate policies down. The US now ranks at the bottom of the G20. If all the Trump administration’s announcements and budget cuts continue being implemented, support schemes for renewables would be reduced. The announced exit from the Paris Agreement is seen as an immense step backwards.The investment attractiveness for renewable energy in the US is still high, but has been marked by a downward trend. There is uncertainty in the US about possible reductions in the Investment Tax Credit and Production Tax Credit and after the new US administration announced it will review – and repeal – the Clean Power Plan. Such recent developments add to existing federal tax breaks that subsidise various types of offshore oil and gas production.The US spent an average of US$ 4 billion of public finance a year on fossil fuels between 2013 and 2014. Despite a decline in coal-fired power, federal tax breaks support various types of offshore oil and gas production. Trump also threatens the US’s position as fourth highest provider of international bilateral climate finance and the remaining US$ 2 billion of its Green Climate Fund Pledge.

19) CAT (2015): “The Coal Gap: planned coal-fired power plants inconsistent with 2°C and threaten achievements of INDCs, http://climateactiontracker.org/assets/publications/briefing_papers/CAT_Coal_Gap_Briefing_COP21.pdf



INDONESIACountry Profile | 2017

15

INDONESIA Country Facts 2017

BROWN TO GREEN: THE G20 TRANSITION TO A LOW-CARBON ECONOMY | 2017

CLIMATEACTION

TRACKER

G20 average

G20 average

18,373

NOTRE DAME GLOBAL ADAPTATION INITIATIVE (ND-GAIN) INDEX 4

0 1

0.40 Vulnerability Subindex

AIR POLLUTION INDEX 5 (PM 2.5)

10 µg/m³WHO

benchmark 15 µg/m³

INDONESIAGDP PER CAPITA2 ($ (const. 2011, international))

10,368Indonesia

Source: WB databank, 2017

0.69HUMAN DEVELOPMENT INDEX 1

Source: UNDP, 2016

0.70

Global GDPSHARE OF GLOBAL GDP 2

2.3 %

5.3 %

Source: WB databank, 2017

Indonesia

GHG EMISSIONS PER CAPITA3 (tCO2 e/cap)

G20 average8.310.5

IndonesiaSource: PRIMAP-hist, 2017

SHARE OF GLOBAL GHG EMISSIONS 3

Indonesia

Source: PRIMAP-hist, 2017Source: WB databank, 2017Source: ND-GAIN, 2015

This country profile assesses Indonesia’s past, present - and indications of future - performance towards a low-carbon economy by evaluating emissions, climate policy performance, climate finance and decarbonisation. The profile summarises the findings of several studies by renowned institutions.



16

CCPI PERFORMANCE RATING OF GHG EMISSIONS PER CAPITA 7

1400

1200

1000

800

600

400

200

0

Total emissions across sectors (MtCO2e/year)

1990 1995 2000 2005 2010 2015 2020 2025 2030

Waste

Other emissions

Agriculture

Industrial processes

Energy

Projected emissions(excl. LULUCF*)

LULUCF*

Recent developments (2009-2014)

Current level (2014)

Current level compared to a well below 2°C pathway

very low low medium high very high

Indonesia’s emissions (excl. LULUCF) have grown steadily in the past. LULUCF emission have increased over recent decades with cycles of very high emissions peaks and are the highest in the G20.6

Source: CCPI 2017 – G20 Edition

CONTENT

n GREENHOUSE GAS (GHG) EMISSIONS DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . .16

n CLIMATE POLICY PERFORMANCE . . . .17

POLICY EVALUATION . . . . . . . . . . . . . . . . . . . . . .17

CCPI EXPERTS’ POLICY EVALUATION . . . . . . . . . .17

REGULATORY INDICATORS FOR SUSTAINABLE ENERGY (RISE) INDEX . . . . . . . . . . . . . . . . . . . . .17

COMPATIBILITY OF CLIMATE TARGETS WITH A 2°C SCENARIO . . . . . . . . . . . . . . . . . . . .18

n FINANCING THE TRANSITION . . . . . . . . .18

INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Investment attractiveness . . . . . . . . . . . . . .18

Green Bonds . . . . . . . . . . . . . . . . . . . . . . . . .19

Emissions of new investments

in the power sector . . . . . . . . . . . . . . . . . . .19

FISCAL POLICIES . . . . . . . . . . . . . . . . . . . . . . . . .19

Fossil fuel subsidies (for production and consumption) . . . . . . .19

Effective carbon rate . . . . . . . . . . . . . . . . . .19

PROVISION OF INTERNATIONAL PUBLIC SUPPORT .20

Pledge to the Green Climate Fund (GCF) . . . .20

Contributions through the major

multilateral climate funds . . . . . . . . . . . . . . . .20

Bilateral climate finance contributions . . . . . .20

Climate finance contributions through . . . . .20

Multilateral Development Banks (MDBs) . . . .20

Future climate finance commitments . . . . . .20

n DECARBONISATION . . . . . . . . . . . . . . . . . .21

SECTOR-SPECIFIC INDICATORS . . . . . . . . . . . . . . .21

ENERGY MIX . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

SHARE OF COAL IN ENERGY SUPPLY . . . . . . . . . .22

SHARE OF RENEWABLES IN ENERGY SUPPLY . . . .22

ENERGY USE PER CAPITA . . . . . . . . . . . . . . . . . .23

ENERGY INTENSITY OF THE ECONOMY . . . . . . . .23

CARBON INTENSITY OF THE ENERGY SECTOR . . .24

Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

*Land Use, Land Use Change and Forestry emissions according to the Climate Action Tracker

Source: PRIMAP, 2017; CAT, 2017

INDONESIAGREENHOUSE GAS (GHG) EMISSIONS DEVELOPMENT



17

CLIMATE POLICY PERFORMANCE

low medium high

Long term low emissions development strategy

GHG emissions target for 2050

Renewable energy in power sectora

Coal phase-outb

Efficient light duty vehicles

Efficient residential buildings

Energy efficiency in industry sector

Reducing deforestationc

POLICY EVALUATION 8

a) Share of renewables in the power sector (2014): 11% b) Share of coal in total primary energy supply (2014): 17% c) Forest area compared to 1990 levels (2014): 77% Source: own evaluation


CCPI EXPERTS’ POLICY EVALUATION 9

CCPI 2008

CCPI 2009

CCPI 2010

CCPI 2011

CCPI 2012

CCPI 2013

CCPI 2014

CCPI 2015

CCPI 2016

CCPI 2017

very high

high

medium

low

very low

CCPI EVALUATION OF CLIMATE POLICY (2017)

Evaluation of international climate policy

Evaluation of national climate policy


Climate Transparency evaluates sectoral policies and rates them whether they are in line with the Paris Agreement temperature goal. For more detail, see Annex.

National experts state the Indonesian government is well engaged in international climate diplomacy, though its targets are not sufficient to stay in line with the well below 2°C goal. To reach this goal, experts say Indonesia would have to improve its forest

protection policies in particular, given it has the G20’s highest deforestation-related emissions. Support schemes for renewable energy in the electricity sector and a carbon price signal would have to be enhanced.

Overall policy performance

Source: RISE index, 2017

REGULATORY INDICATORS FOR SUSTAINABLE ENERGY (RISE) INDEX

0-33 34-66 67-100

RISE scores reflect a snapshot of a country’s policies and regulations in the energy sector. Here Climate Transparency shows the RISE eva-luation for Renewable Energy and Energy Efficiency.

ENERGY EFFICIENCY 34RENEWABLE ENERGY 55

INDONESIA



18

COMPATIBILITY OF CLIMATE TARGETS WITH A 2°C SCENARIO 10

CLIMATE ACTION TRACKER EVALUATION OF NATIONAL PLEDGES, TARGETS AND NDC 10

inadequate medium sufficient role model

Indonesia’s emissions from both deforestation and coal are set to increase rapidly over the period to 2030. In contrast, to be consistent with the Paris Agreement temperature goal, the emissions should be stabilising, if not beginning to decline, by then. The Climate Action Tracker (CAT) rates Indonesia’s Nationally Determined Contribution (NDC) submitted under the Paris Agreement as “medium” as it is at the least ambitious end of what would be a fair contribution, and is not consistent with limiting warming to below 2°C, let alone with the stronger 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort.

2000

1500

1000

500

0

1990 1995 2000 2005 2010 2015 2020 2025 2030

Historical emissions (excl. LULUCF*)

Max. emissions levelunder mitigation targets

Min. emissions levelunder mitigation targets

Emissions projections (excl. LULUCF*)

MtCO2e/year

Climate Action Tracker's mediumto sufficient 2°C emissions range

* Land Use, Land Use Change and Forestry

CLIMATE POLICY PERFORMANCE

Source: CAT, 2017

Source: CAT, 2017


INVESTMENTS

n INVESTMENT ATTRACTIVENESS 2016 saw some increase in solar PV installed capacity in Indonesia after a period of limited activity. Yet there is a long path ahead as Indonesia currently lags behind other G20 countries in installed wind and solar PV capacities, and in attracting major global renewable energy businesses (Allianz, 2017).

RENEWABLE ENERGY COUNTRY ATTRACTIVENESS INDEX (RECAI) 12 ALLIANZ CLIMATE AND ENERGY MONITOR 11


TREND

Source : Allianz, 2017; EY, 2017

INDONESIA

INDONESIA

low medium high

Indonesia was not included in the top 40 countries listed in the latest RECAI issue (May, 2017) but was ranked 38th (low) in their Oct. 2016 issue.



19

n 17 FINANCING THE TRANSITION

FISCAL POLICIES

n EMISSIONS OF NEW INVESTMENTS IN THE POWER SECTOR This indicator shows the emissions per MWh coming from newly-installed capacity in 2016. The smaller the value, the more decarbonised the new installed capacity.

n FOSSIL FUEL SUBSIDIES (FOR PRODUCTION AND CONSUMPTION) 14 Subsidies for petroleum products and fossil fuel-based electricity comprised close to over US$ 32.5 billion in 2014, over a fifth of the government spending. However, the government phased out gasoline subsidies in its revised 2015 budget due to increasing fiscal pressures, keeping smaller subsidies for LPG, diesel fuel, and kerosene. As a result, budgeted subsidies were reduced significantly, to $8 billion in 2015. For production, tax exemptions continue for goods used in oil and gas exploration and investment credit allowances for oil and gas, while the state-owned oil and gas monopoly invests substantially in exploration activities. 32.5 billion US$2014

Source: Calculations done by ODI based on OECD inventory, 2017

G20 total: 230 billion US$2014

Source: Calculations done by IDDRI for Climate Transparency, 2017 0.76 tCO2/MWh

n GREEN BONDS

Green bonds are bonds that earmark proceeds for climate or environmental projects and have been labelled as ‘green’ by the issuer.13

Source: Calculations done by Climate Bonds Initiative for Climate Transparency, 2017

TOTAL VALUE OF GREEN BONDS

0 billion US$2017

GREEN BONDS AS SHARE OF OVERALL DEBT

0 %G20 average: 0.16%

n EFFECTIVE CARBON RATE 16

In 2012, effective carbon rates in Indonesia consisted entirely of specific taxes on energy use, and only applied to fuels used in road transport. Indonesia had neither an explicit carbon tax nor an emissions trading system, leading to 17% of carbon emissions of energy use being priced, and none above € 30/tCO2 (~US$ 37).17

0 US$/tCO2

Source: OECD, 2016

EFFECTIVE CARBON RATE IN 2012 17

for non-road energy,excluding biomassemissions

INDONESIA



20

PROVISION OF INTERNATIONAL PUBLIC SUPPORT

n PLEDGE TO THE GREEN CLIMATE FUND (GCF)

Indonesia is not listed in Annex II of the UNFCCC, and it is therefore not formally obliged to provide climate finance. While there may be climate-related contributions through bilateral or multilateral development banks, these have not been included in this report.

Obligation to provide climate finance under the UNFCCC

Signed pledge to the GCF (Million US$)

Pledge per 1000 dollars of GDP (US$2011 (constant))

no 0.3 n/a


Source: GCF,2017

n CONTRIBUTIONS THROUGH THE MAJOR MULTILATERAL CLIMATE FUNDS 18

Annual average contribution 2013-2014 (Billion US$)

Annual average contribution 2013-2014 per 1000 dollars of GDP (Billion US$) Adaptation Mitigation

n/a n/a n/a n/a

n BILATERAL CLIMATE FINANCE CONTRIBUTIONS 19

Bilateral finance commitments

(annual average 2013-14) (Billion US$)

n/a

Bilateral finance commit-ments per 1000 dollars of

GDP (annual average 2013-14) (Billion US$)

n/a

Financial instrument (average 2013-2014)

Grant Concessio-nal Loan

Non- Concessional

loanEquity Other

n/a n/a n/a n/a n/aTheme of support (average 2013-14)

Mitigation Adaptation Cross-cutting Other

n/a n/a n/a n/a

n CLIMATE FINANCE CONTRIBUTIONS THROUGH MULTILATERAL DEVELOPMENT BANKS (MDBs) 20

MDBs in aggregate spent $21.2 billion on mitigation and $4.5 billion on adaptation in developing countries in 2014.

n FUTURE CLIMATE FINANCE COMMITMENTS

No national disaggregation available

Source: MDB report, 2015 Source: “Roadmap to US$100 Billion” report, 2016.

Source: Party reporting to the UNFCCC, 2013-14

Source: Climate Funds Update, 2017

INDONESIA



21

SECTOR-SPECIFIC INDICATORS

POWER SECTOR

TRANSPORT SECTOR

BUILDING SECTOR

ELECTRICITY DEMAND PER CAPITA(kWh/capita)

SHARE OF GLOBAL ELECTRIC VEHICLE SALES (%)

SHARE OF RENEWABLES IN POWER GENERATION (incl. large hydro)

SHARE OF POPULATION WITH ACCESS TO ELECTRICITY

SHARE OF POPULATION WITH BIOMASS DEPENDENCY

Data from 2014Source: CAT, 2016

Data from 2014Source: IEA, 2016





EMISSIONS INTENSITY OF THE POWER SECTOR(gCO2/kWh)

38%G20 Indonesia G20 average: 632

3,601

781632

736

G20 average: 1.2

TRANSPORT EMISSIONS INTENSITY(kgCO2/vkm)

Source: CAT, 2016

0.22n/a

G20 average: 0.22

1.20.53

TRANSPORT EMISSIONS PER CAPITA(tCO2e/capita)


G20 average: 26

RESIDENTIAL BUILDING SPACE(m2/capita)

14


INDUSTRY EMISSIONS INTENSITY (tCO2/thousand US$2012 sectoral GDP (PPP))

0.13

FOREST AREA COMPARED TO 1990 LEVEL


77%

Data from 2014Source: PRIMAP, 2017; WorldBank, 2017

AGRICULTURE EMISSIONS INTENSITY (tCO2e/thousand US$2010 sectoral GDP (constant))

0.8

FOREST SECTORAGRICULTURE SECTOR

INDUSTRY SECTOR

84%

DECARBONISATION

G20 average: 22%

SHARE OF PRIVATE CARS AND MOTORCYCLES

Source: CAT, 2016

G20 average: 64%

RESIDENTIAL BUILDINGS EMISSIONS INTENSITY(kgCO2 /m2)



G20 average: 1.4 G20 average: 37

3720

n/a

1.4 0.5

BUILDING EMISSIONS PER CAPITA(tCO2/capita)

INDONESIA

11.4%

n/a



22

DECARBONISATION

ENERGY MIX 21

Total Primary Energy Supply (PJ) Share in 2014

1990 1995 2000 2005 2010 2014

8,000

6,000

4,000

2,000

0

17%

33%

0%

9 %

15 % Gas

Renewables (incl. hydro and excl. residential biomass)

Nuclear

Oil

Coal

Note: numbers might not add up to 100% due to exclusion of residential biomass from the share of renewables.

Source: IEA, 2016

SHARE OF COAL IN ENERGY SUPPLY 22 SHARE OF RENEWABLES IN ENERGY SUPPLY 23

1990 1995 2000 2005 2010 2014

Indonesia G20 average

Share of coal (%)

40

30

20

10

0

Share of renewables (incl. hydro and excl. residential biomass) (%)

1990 1995 2000 2005 2010 2014


10

8

6

4

2

0

Indonesia’s share of coal in the energy mix remains relatively high – close to 17% in 2014 – but still below the G20 average.

The share of renewables in the energy mix (excl. residential use of biomass) has steadily increased in recent decades. In 2014, Indonesia‘s relatively high level of renewables was at 8.5%.

Source: IEA, 2016

Source: own evaluation Source: CCPI 2017 – G20 Edition

Source: IEA, 2016

PERFORMANCE RATING

RECENT DEVELOPMENTS (2009-2014)

CURRENT LEVEL (2014)



CCPI PERFORMANCE RATING OF THE SHARE OF RENEWABLES 7

Recent developments(2009-2014)

excl. hydro and traditional biomass

Current level(2014)

incl. hydro and excl. traditional biomass


INDONESIA



23

DECARBONISATION

ENERGY USE PER CAPITA 24

Total Primary Energy Supply per capita (GJ/capita)

1990 1995 2000 2005 2010 2014


100

80

60

40

20

0

At only 36 GJ/capita, Indonesia’s energy use per capita is the G20’s second lowest. It has crept up in recent years, but is still far below the G20 average of 91 GJ/capita.

ENERGY INTENSITY OF THE ECONOMY 25

Source: IEA, 2016

Total Primary Energy Supply per unit of GDP PPP (TJ/million US$2012)

1990 1995 2000 2005 2010 2014


8

7

6

5

4

3

2

1

0

Having started at a low level, the energy intensity of Indonesia’s economy has been relatively steady over past decades and only recently started falling.

Source: own evaluation





PERFORMANCE RATING


CCPI PERFORMANCE RATING OF ENERGY USE PER CAPITA 7

Recent developments (2009-2014)

Current level (2014)

Current level compared to a well below 2°C

pathway

Future target compared to a well below 2°C

pathway


Source: IEA, 2016

INDONESIA



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CARBON INTENSITY OF THE ENERGY SECTOR 26

1990 1995 2000 2005 2010 2015 2020 2025 2030

Indonesia: past development G20 average Indonesia: future projections

Tonnes of CO2e per unit of Total Primary Energy Supply (tCO2e/TJ)

70

60

50

40

30

20

10

0

The carbon intensity of Indonesia’s energy supply grew sharply in the 1990s, but has been fairly steadysince 2003. Scenarios project an upward trend.

DECARBONISATION

Source: own evaluation

Source: IEA, 2016





PERFORMANCE RATING

INDONESIA



25

ANNEX

Criteria description

Low Medium High

Long term low emissions development strategy

No long term low emissions strategy

Existing long term low emissions strategyLong-term low emissions strategy submitted to the UNFCCC in accordance with Article 4, paragraph 19, of the Paris Agreement

GHG emissions target for 2050No emissions reduction target for 2050 (or beyond)

Existing emissions reduction target for 2050 (or beyond)

Emissions reduction target to bring CO2 emissions to at least net zero by 2050

Renewable energy in power sector

No policy or support scheme for renewable energy in place

Support scheme for renewables in the power sector in place

Support scheme and target for 100% renewables in the power sector by 2050 in place

Coal phase-outNo consideration or policy in place for phasing out coal

Significant action to reduce coal use implemented or coal phase-out under consideration

Coal phase-out in place

Efficient light duty vehicles No policy or emissions performance standards for LDVs in place

Energy/emissions performance standards or support for wLDVs

National target to phase out fossil fuel cars in place

Efficient residential buildingsNo policy or low-emissions building codes and standards in place

Building codes, standards and fiscal/financial incentives for low-emissions options in place

National strategy for near-zero energy buildings (at least for all new buildings)

Energy efficiency in industry sector

No policy or support for energy efficiency in industrial production in place

Support for energy efficiency in industrial pro-duction (covering at least two of the country’s subsectors (e.g. cement and steel production))

Target for new installations in emissions-intensive sectors to be low-carbon after 2020, maximising efficiency

Reducing deforestationNo policy or incentive to reduce deforestation in place

Incentives to reduce deforestation or support schemes for afforestation /reforestation in place

National target for reaching zero deforestation by 2020s

To endnote 8) Rating

KEY INDICATORS 1) The Human Development Index (HDI) is a composite index published

by the United Nations Development Programme (UNDP). It is a summary measure of average achievement in key dimensions of human development. A country scores higher when the lifespan is higher, the education level is higher, and GDP per capita is higher. Data for 2016.

2) Gross Domestic Product (GDP) per capita is calculated by dividing GDP with midyear population figures. GDP is the value of all final goods and services produced within a country in a given year. Here GDP figures at purchasing power parity (PPP) are used. Data for 2015.

3) PRIMAP-hist combines several published datasets to create a comprehensive set of greenhouse gas emissions pathways for every country and Kyoto gas covering the years 1850 to 2014 and all UNFCCC member states as well as most non-UNFCCC territories. The data resolves the main IPCC 1996 categories. Data for 2014.

4) The ND-GAIN index summarizes a country‘s vulnerability to climate change and other global challenges in combination with its readiness to improve resilience. It is composed of a vulnerability score and a readiness score. In this report, we display the vulnerability score, which measures a country‘s exposure and sensitivity to the negative impact of climate change in six life-supporting sectors – food, water, health, ecosystem service, human habitat and infrastructure. In this report, we only display the vulnerability score of the index. Data for 2015.

5) Average level of exposure of a nation‘s population to concentrations of suspended particles measuring less than 2.5 microns in aerodynamic diameter, which are capable of penetrating deep into the respiratory tract and causing severe health damage. Data for 2015.

n GREENHOUSE EMISSIONS (GHG) 6) This indicator gives an overview of the country’s emissions profile and

the direction the country’s emissions are taking under current policy scenario.

7) The Climate Change Performance Index (CCPI) aims to enhance transparency in international climate politics. On the basis of standardised criteria, the index evaluates and compares the climate protection performance of countries in the categories GHG emissions, renewable energy and energy use. It assesses the recent developments, current levels, policy progress and the compatibility of the country‘s current performance and future targets with the international goal of limiting global temperature rise well below 2°C.

G20n CLIMATE POLICY PERFORMANCE: 8) The table below displays the criteria used to assess a country’s policy

performance. For the sector-specific policy criteria the ‘high’ rating is informed by the Climate Action Tracker (2016) report on the ten steps needed to limit warming to 1.5°C and the Paris Agreement.

9) The CCPI evaluates a country‘s performance in national climate policy, meaning the performance in establishing and implementing a sufficient policy framework, as well as international climate diplomacy through feedback from national climate and energy experts.

10) The Climate Action Tracker is an independent, science-based assessment that tracks government emissions reduction commitments and actions. It provides an up-to-date assessment of individual national pledges, targets and NDCs and currently implemented policies to reduce greenhouse gas emissions.

n FINANCING THE TRANSITION 11) The Allianz Climate and Energy Monitor ranks G20 member states on

their relative fitness as potential investment destinations for building low-carbon electricity infrastructure. The investment attractiveness of a country is assessed through four categories: policy adequacy, policy reliability of sustained support, market absorption capacity and the national investment conditions.

12) The Renewable Energy Country Attractiveness Index (RECAI) produces scores and rankings for countries’ attractiveness based on macro drivers, energy market drivers and technology-specific drivers which, together, compress a set of 5 drivers, 16 parameters and over 50 datasets. For comparability purposes with the Allianz Monitor index, we divided the G20 members included in the latest RECAI ranking (May 2017) in two categories and rate the top half as “high performance” and the lower half as “medium performance”.

13) The green bonds country indicator shows which countries are active in the green bond market by showing green bonds per country as a percentage of the overall debt securities market for that country. Green bonds were created to fund projects that have positive environmental and/or climate benefits.

14) The data presented is from the OECD inventory: www.oecd.org/site/tadffss/ except for Argentina and Saudi Arabia for which data from the IEA subsidies database is used. The IEA uses a different methodology for calculating subsidies than the OECD. It uses a ‘price-gap’ approach and covers a sub-set of consumer subsidies. The price-gap approach compares average end-user prices paid by consumers with reference prices that corresponds to the full cost of supply.



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ANNEX (continued) G2015) This footnote had to be deleted as the data for the corresponding

indicator was not available at the time of publication of this report.

16) In addition to carbon pricing mechanisms, emissions trading schemes and various energy taxes also act as prices on carbon, although they are generally not developed with the aim or reducing emissions. The OECD report presents calculations on ‘Effective Carbon Rates’ as the sum of carbon taxes, specific taxes on energy use, and tradable emission permit prices. The calculations are based on 2012 energy policies and prices, as covered in OECD’s Taxing Energy Use database. According to OECD estimates, to tackle climate change emissions should be priced at least EUR 30 (or US$ 37) per tonne of CO2 revealing a major ‘carbon pricing gap’ within the G20.

17) The effective carbon rate presented in this country profile does not factor in emissions from biomass, as many countries and the UNFCCC treat them as carbon-neutral. However, in many cases biomass emissions are found to be non-carbon neutral over their lifecycle, especially due to the land use changes they cause.

18) Finance delivered through multilateral climate funds comes from Climate Funds Update, a joint ODI/Heinrich Boell Foundation database that tracks spending through major multilateral climate funds. Figures include: Adaptation for Smallholder Agriculture Programme; Adaptation Fund; Clean Technology Fund; Forest Carbon Partnership Facility; Forest Investment Program; Global Environment Facility (5th and 6th Replenishment, Climate Focal Area only); Least Developed Countries Fund; Partnership for Market Readiness; Pilot Program for Climate Resilience; Scaling-up Renewable Energy Program; and the Special Climate Change Fund.

19) Bilateral finance commitments are sourced from Party reporting to the UNFCCC under the Common Tabular Format. Figures represent commitments of funds to projects or programmes, as opposed to actual disbursements.

20) Data for the MDB spending on climate action includes ADB, AfDB, EBRD, EIB, IDB, IFC and the World Bank. Data is self-reported annually by the MDBs, based on a shared methodology they developed. The reported data includes MDBs own resources and expenditure in EU13, not funding from external sources that are channelled through the MDBs (e.g through bilateral donors and dedicated climate funds that are captured elsewhere). Data reported corresponds to the financing of adaptation or mitigation projects or of those components, sub-components, or elements within projects that provide adaptation or mitigation benefits (rather than the entire project cost). It does not include public or private finance mobilised by MDBs.

n DECARBONISATION21) Total primary energy supply data displayed in this factsheet does not

include non-energy use values.

22) The share of coal in total primary energy supply reveals the country’s historical and current proportion of coal in the energy mix. As coal is one of the dirtiest of fossil fuels, reducing coal’s share in its energy mix is a crucial step for a country‘s transition to a green economy.

23) The share of renewable energy in total primary energy supply shows a country’s historical and current proportion of renewables in the energy mix. The numbers displayed in the graph do not include residential biomass and waste values. Replacing fossil fuels and promoting the expansion of renewable energy is an important step for reducing emissions.

24) TPES per capita displays the historical, current and projected energy supply in relation to a country’s population. Alongside the intensity indicators (TPES/GDP and CO2/TPES), TPES per capita gives an indication on the energy efficiency of a country’s economy. In line with a well-below 2˚C limits, TPES/capita should not grow above current global average levels. This means that developing countries are still allowed to expand their energy use to the current global average, while developed countries have to simultaneously reduce it to that same number.

25) TPES per GDP describes the energy intensity of a country‘s economy. This indicator illustrates the efficiency of energy usage by calculating the energy needed to produce one unit of GDP. A decrease in this indicator can mean an increase in efficiency but also reflects structural economic changes.

26) This indicator describes the carbon intensity of a country‘s energy sector (expressed as the CO2 emissions per unit of total primary energy supply) and gives an indication on the share of fossil fuels in the energy supply.

For more detail on the sources and methodologies behind the calculation of the indicators displayed, please download the Technical Note at:

http://www.climate-transparency.org/g20-climate-performance/g20report2017

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The Brown to Green Report 2017 by Climate Transparency provides a comprehensive overview of the G20 countries, whether – and how well – they are doing on the journey to transition to a low-carbon economy. It assesses the main trends for the G20 in emissions, climate policy performance, finance, and decarbonisation. The report summarises and compares the findings presented in Climate Transparency’s country profiles for each G20 country (incl. the EU). Findings are based on publicly available data by renowned institutions.

The country profiles and a technical note on data sources and methodology can be downloaded on http://www.climate-transparency.org/g20-climate-performance/g20report2017.

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BROWN TO GREENExecutive Summary and Indonesia Country Profile | 2017

BROWN TO GREEN - IESR

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