Dr. Syaifullah Deputy Director of Policy Center for Climate Finance and Multilateral Fiscal Policy Agency - Ministry of Finance of the Republic of Indonesia

Indonesian Climate Expenditure Tracking System

December 4th, 2014 EU Pavilion – UNFCCC COP 20 Lima, Peru

Presidential decree 61/2011 on RAN-GRK (National Action Plan on Greenhouse Gas Emission Reduction)

26% [767 Mt CO2]

41% [1,189 Mt CO2]

Domestic Capacity

With International Support

26%(MT) 41%(GT)

Forestry and peat land 672 87,61% 1,039 87%

Waste management 48 6% 78 7%

Energy and transportation 38 5% 56 5%

Agriculture 8 1% 11 1%

Industry 1 0,130% 5 0%

Total 767 100% 1,189

Further Elaboration

RAN GRK Draft INDC Indonesia

COMMITMENT

MFF focus on mitigation actions in forestry, peat, energy and transportation which includes 93% of national emissions reduction targets.

Budget related to mitigation activities in RAN-GRK in 2012 around Rp 15.9 trillion.

If financing RAN-GRK maintained at the same level in 2012, the emission reduction achieved only 15% (116 MtCO2e) from the target of 767 MtCO2e.

MFF Study suggested MoF to apply budget tagging/tracking and scoring system in order to achieve 26% percent emission reduction target with existing spending trend.

MoF – UNDP : Mitigation Fiscal Framework

MoF – CPI : Indonesia Climate Finance Landscape

66% Govt Budget

33% others

68%

32%

20%

80%

5

LESS Study (2013) proposed budget-tagging system for climate change mitigation actions at national level.

MoF issued Ministerial Decree No. 136/PMK.02/2014 in June 2014 on Guideline for Budget Planning and Review for line ministries.

Budget tagging aims to track and report public expenditure for mitigation actions (and later on adaptation) mandatory for 7 key line ministries under RAN-GRK.

Identify clearly the contribution of budget units for mitigation actions and enable budget negotiations to take place in the knowledge of the impact of decisions on emission reduction.

MoF – UNEP/UNDP : Low Emission Budget Tagging and Scoring System

Based on Presidential Decree No. 61 Year 2011, activities for climate change can be classified into 2 types :

1) Main Activity : all activities which have direct impact to emission reduction, improve the capacity for emisiion absorption, and stabilization/conservation of carbon stock;

2) Support Activity : all activities which have not direct impact to emission reduction but give support to main activity implementation.

Program

Activities

Component

Sub-Component

Budget Code

Detailed Expenditure

Outcome (Quantitative and Qualitative)

Output (Volume, Type, Unit)

Main Indicator Perfomance

Indicator Performance for Activities

Climate Mitigation Marking

CLIMATE MITIGATION MARKING

Budget themes : 1. MDG’s-1 : Poverty Alleviation; 2. MDG’s-2 : Basic Education; 3. MDG’s-3 : Gender Equality and Women

Empowerment; 4. MDG’s-4 : Child Mortality Rate; 5. MDG’s-5 : Mother Health; 6. MDG’s-6 : HIV/AIDS, Malaria, and Other Diseases

Alleviation;

7.MDG’s-7 : Environment and Climate Change;

8. MDG’s-8 : Global Cooperation; 9. Infrastructure; 10. Public Private Partnership; 11. South-South and Triangular Cooperation.

BUDGET SOFTWARE

WAY FORWARD

Strengthening the Consistency and Accountability of Planning and Budgeting Process

Putting in Place Performance-Based Budgeting System for Budget Efficiency

Preparation of Fiscal Instruments to Support Climate Financing