Dicky Edwin Hindarto - Lessons From Indonesia Carbon Market
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Transcript of Dicky Edwin Hindarto - Lessons From Indonesia Carbon Market
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National Council on Climate Change of Indonesia
Lesson Learn from Indonesia Carbon Market
Dicky Edwin Hindarto
Coordinator of Carbon Trading Mechanism DivisionNational Council on Climate Change of Indonesia
Asia Clean Energy Forum, 23 June, 2011
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1. Domestic mitigation objectivesand role of market instrument(s)
2. Indonesia carbon market status
3. How to adapt the next carbon
market?
Structure of Presentation
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Indonesia is the first developing country that announces its voluntaryGHG emissions reduction target up to 26 percent by 2020.
Further, with international support, Indonesia is confident that it can
reduce emissions up to 41 percent.
To this end, Indonesia has finalized National Action Plan on GHG
Emission Reduction 2010-2020. The plan is aligned with the Medium and Long-term Development Plan;
it provides directives to priority development sectors on key and
supporting actions necessary to achieve the emission reduction
objectives while maintaining economic growth and improving
competitiveness. The action plan would be equipped with a measurable, reportable and
verifiable (MRV) system as a part of the national carbon accountancy
system.
Indonesia policies on GHG mitigation
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Indonesia emissions projected to
increase from 2.1 to 3.3 GtCO2e
between 2005 and 2030
Projected emission1, Million ton CO2e
Transportation
Electricity
LULUCF2
Peat
Agriculture
Oil and gasCementBuilding
2030
3,260
590
151105
7538
2020
2,534
650
14310345
2005
2,052
760
110129
96
Share of global emissions1 Only sector direct emission are included
2 LULUCF emission based on clean emission approximation, including absorbtion
5.1%5.0%
Indonesia GHG emission projections based
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We are devising an energy mix policy includingLULUCF (Land Use, Land Use Change, and Forestry)that will reduce our emissions by 26 percent by 2020from BAU (Business As Usual). With international
support, we are confident that we can reduceemissions by as much as 41 percent- President Yudhoyonos commitment
at the Pittsburgh G-20 Leaders Summit
-160
-140
-120
20
80
60
2
-80
-60
40
-40
-260
-240
-20
-220
Reduction cost
2
USD per tCO2e
-100
0
Reduction potential2
MtCO2e per year
800600
-200
400 2,2002,000200 1,8001,6001,4001,2001,0000
-180
Geothermal
Fireprevention
High efficiency appliances
Internal combustion engineimprovements in passenger cars
Switching to LEDs
REDDsmallholderagriculture
Largehydro
REDDtimberextraction
REDDtimberplantation
SustainableForestManagement
Peat landrehab.
Net Costs
Net Savings
1 Societal perspective implies utilizing a 4% discount rate2 The width of each bar represents the volume of potential reduction. The height
of each bar represents the cost to capture each reduction initiativeSource: Indonesia GHG Abatement Cost Curve
Societal perspective1, 2030
Options for Indonesia mitigation actions up to 2030
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Market
Compliance market(CDM)
Voluntary market
(VCM)
Future carbon
markets
Non-market
National budget
Private investment
Foreign public funding
Policies (e.g fiscal, banking incentives
and disincentives)
Philanthropic contribution (companies,
NGOs)
Market and non-market approaches to climate change mitigation
Market and non market approaches to climate change mitigation
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Per 1 May 1st
, 2011, there are 145 projects on CDM-EB pipeline Methane avoidance and biomass are the leading sectors
64 projects are registered
Indonesia CDM projects status per sectorIndonesia CDM projects status
CDM market in Indonesia
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Indonesia issued CER projects
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More than 20 Indonesian projects in VCM pipeline and all uses Voluntary
Carbon Standard (VCS) methodologies.
Total VER that already issued are more than 1,000,000 tVER.
Indonesia voluntary carbon market
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LULUCF
Power
Industry
Transport Waste
Institutional
Technical
Managerial Legal
Bilateral
Regional
Global
compliance post
2012
Global voluntary
Domestic
Supply
DEEP CUT??
DemandReadiness
?
Indonesia and the Future Carbon Markets
Indonesia is currently focusing on the supply side to meet the demand from theinternational markets
There are now 38 of submissions on new carbon market under LCA at UNFCCC
Mechanisms for domestic market are being explored with focus on forestry, small
renewable energy, and industry
The clarity and certainty on the demand side will boost readiness on the supply side
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Initiatives to develop new market mechanisms at domestic level
Forestry:
World Bank Forest Carbon Partnership Facility; Indonesia-Australia Forest Carbon Partnership
Pilot projects by non-government and
government entities to develop forest related
carbon market.
Industry: Standardization of energy usage/consumption
based on industry clusters
Socio-economic analysis, including carbon
market opportunities, on emission reductions in
industry sector.
Energy: Standardization of carbon footprint assessment
for pre-combustion, combustion, and post-
combustion
Transport:
Socio-economic analysis,including carbon market
opportunities, on emission
reductions in industry sector.
Waste: Assessment of mitigation in
municipal solid waste, incl.
technical and cost analyses.
Finance: Green Paper on fiscal policies
to support mitigation
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Planned links with the development of future carbon markets
International Carbon Markets
Link via offset
mechanism
(e.g. ETS)
Link via other domestic
market mechanisms
(e.g. KVER, JVER)
International
crediting
mechanisms
DOMESTIC MARKET MECHANISMS
that based on voluntary market system
(e.g. Emissions trading scheme or sectoral trading)
Indonesia will prepare standard, policies, and marketinstrument.
CARBON CREDIT SUPPLIER
Indonesia will produce carbon credit for mandatory
and voluntary based market system for international
market.
REGIONAL AND BILATERAL
MARKET
based on regional and bilateralagreements and domestic
emission reduction policies
(e.g. NAMA or sectoral
crediting)
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Terima kasihSalamat po
Thank you