RADARBANGSA.COM - Climate change is a real phenomenon that has become a global concern. Right now every country has concern regarding the climate change. At present, every country has the same concern for the problem of climate change. The results of the 2010 National Council on Climate Change said that 85 percent of Indonesia's total national emissions came from land use change and forestry. This is in line with the swift policy of land clearing/forestry in the SBY era, when the position of minister of forestry was held by Zulkifli Hasan in 2009, which reached 1.64 million hectares, or nearly 25 times the area of ​​DKI Jakarta.

In the arena of global-level relations to combat climate change, there are already global agreements that are generally initiated by the United Nations (UN) under the United Nations Framework Convention on Climate Change (UNFCCC). Further development, negotiations related to climate change are held routinely every year in the framework of the Conference of Parties (CoP). What is intended to continue to maintain the consistency of the commitment of the parties to the emission reduction, including the mechanism of climate change funding through bilateral and multilateral cooperation, and in the form of grants, debt, technical assistance and capacity building.

The Green Climate Fund (GCF) is the implementing entity of the United Nations Framework Convention on Climate Change (UNFCCC) financial mechanism established in Cancun, Mexico in 2010. Officially the GCF began operations in 2015 and is headquartered in Songdo, South Korea. The GCF funds a number of areas that are expected to have a strategic impact on climate change mitigation and adaptation.

For strategic mitigation impacts, GCF funding is expected to reduce emissions from energy generation, transportation, forest and land use, as well as buildings, urban, industrial, and equipment. As for the strategic impact of adaptation, GCF funding is expected to increase the resilience of food and water health, community and community livelihoods, ecosystems, infrastructure, and the environment.

Institutions that may submit funding proposals from the GCF are institutions that are accredited by the GCF International. In addition to the Accredited Entity (AE), there is also a so-called National Designated Authority (NDA). Both are key components in accessing GCF funding.

The GCF works through AE to channel its funding towards a project or program. Developing countries have NDA to be the main link between the GCF and these countries. In Indonesia, the role of NDA is the Ministry of Finance, specifically the Fiscal Policy Office.

The main task of NDA is to determine country programs related to climate change. If later there are project proposals from the private sector, NDA will evaluate whether the proposals are compatible with the state program. Consultation is certainly carried out with the Ministry of Environment and Forestry (KLHK), Bappenas, and related Ministries or Government Institutions. After confirming these matters, the NDA INSTITUTION is tasked with issuing a no objection letter and informing the GCF that the government has no objection to the funding proposal from the agency that submitted the proposal.

Projects in Indonesia that have been approved by the GCF include: Development of Bus Rapid Transit in Semarang by PT Sarana Multi Infrastruktur (SMI), Geothermal Resource Risk Mitigation (GREM) by the World Bank, Climate Investor One by the Entrepreneurial Development Bank (FMO), and GCF Readiness Program by the Global Green Growth Institute (GGGI) to strengthen the capacity of NDA institutions and National Accredited Institutions.

In addition to the GCF, other multilateral climate change funding is the Clean Technology Fund, the Amazon Fund, the Global Climate Change Alliance, the Least Developed Countries Fund, the Pilot Program for Climate Resilience, and the GEF Trust Fund.

Indonesia's challenges related to climate change funding include limited national AEs, setting sector priorities in accordance with national development strategies, increasing the number and quality of funding proposals that are in line with GCF investment criteria, and the involvement of affected communities.

Funding to tackle climate change

Funding to tackle climate change in Indonesia comes from 3 sources. First, domestic financing through APBN allocation. Second, it is in the form of grants or loans from abroad. Both are included in the recording of the State Budget and have legal consequences in accordance with the applicable laws and regulations in Indonesia. Third, sources of funds from the private sector. For example, from the banking or non-banking sector, Corporate Social Responsibility (CSR), potential investments from the private sector, and so on which are expected to be a policy incentive to support mitigation efforts.

Melalui PP No. 38 Tahun 2007 tentang Pembagian Urusan Pemerintahan Antara Pemerintah, Pemerintah Daerah Provinsi, dan Pemerintahan Daerah kabupaten/kota, juga menyatakan bahwa urusan lingkungan hidup juga termasuk ke urusan pemerintahan yang dibagi bersama antar tingkatan dan/atau susunan pemerintahan dari pusat, pemerintahan provinsi dan pemerintahan kabupaten/kota. Dialokasikan melalui DAK.

The laws and regulations show Indonesia’s commitment in tackling climate change, in terms of commitment to putting the issue of climate change as a cross-cutting issue in national development including its financing. even this commitment starts from the constitution as the highest legal basis to the technical regulations. Article 28 H and 33 of the 1945 Constitution.

Grants and foreign loans related to climate change financing included in the APBN cycle are regulated by a Presidential Decree, this is in accordance with Article 26 of the Law on State Finance. In accordance with the provisions of Article 41 PP number 10 of 2011, foreign loans related to climate change financing also have the consequences of returning either interest or principal loans. The Minister of Finance is responsible for paying according to the allocation contained in the APBN, this payment process also involves Bank Indonesia.

As with foreign loans, climate change financing sourced from grants also follows the path set by the APBN. The Minister of Finance monitors the realization of the budget sourced from the grant, while the Minister of National Development Planning/Head of Bappenas will monitor the realization and progress of the activities that originate from this grant. If the absorption of the budget sourced from foreign loans or grants is low, the finance minister may request the cancellation of part or all of the foreign loan or grant agreement.

***Points on 'Access and Opportunities for Climate Funding in Indonesia' by Billy Ariez (Climate Change Fosterer) in a Public Discussion held by FNF Indonesia and the Climate Institute.

RadarBangsa.com / M. Isa
https://www.radarbangsa.com/opini/18730/pendanaan-perubahan-iklim-antara-peluang-dan-tantangan