Background

Indonesia is one of the major global emitters of greenhouse gases (GHG), and as a large archipelago, Indonesia is also very vulnerable to the impacts of climate change. Therefore, it is critical for Indonesia to transit to an inclusive green economy, departing from the “business as usual” scenario. The current energy- and carbon-intensive economy of Indonesia is considered to inhibit sustainable development. The Government of Indonesia (GoI) is already taking steps to address these challenges. President Joko Widodo’s moratorium, declared at the UN Climate Change Conference in Marrakesh in 2016, calls for the restoration of peat land, and control and prevention of forest fires as a measure to reduce carbon emissions and restore Indonesia’s major carbon sink.

At the same time, Indonesia has made significant progress towards poverty reduction and overall national development with solid 6% GDP growth annually since 2011 and the population living below national poverty line reducing to 10.64% in 2017 from 15.1% in 1990. However, challenges remain such as vulnerabilities to natural disasters, environmental degradation, discrimination against marginalized groups, increasing economic and gender inequality (Indonesia ranks 88 out of 144 countries in the World Economic Forum’s Gender Development Index, 2016), as well as limited capacities of highly decentralised local governments.

Gender Inequality in Indonesia:

The GoI has shown political commitment to tackle gender inequality through multiple initiatives, including the ratification of the UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) in 1984 which obligates nation states to harmonize domestic laws in line with international laws pertaining to gender-based violence. Mainstreaming gender to national development has been regulated through Presidential Instruction since 2000.

When it comes to gender equality and women’s right to political participation, Indonesia ratified the UN Covenant on Civil and Political Rights and committed to the Beijing Platform of Action which lays out a plan of acceleration for removing women’s barriers to active participation in public life. Indonesia consented to both the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil and Political Rights (ICCPR) in 2006. As a result, the government passed legislation in 2008 mandating a 30% quota on female legislative candidates and women in party leadership.

Poverty in Indonesia:

Indonesia is developing at a fast pace, attaining middle-income status, and joining the ranks of the G20, however persistent inequality prevents the benefits of Indonesia’s impressive economic growth from reaching the poorest and the most vulnerable. Since 2000, economic growth has helped lift millions out of poverty, with the proportion of people living in extreme poverty falling from 40 % in 2000 to 8 % in 2014. However, the benefits of growth have not been shared equally, and millions are left behind.

Indonesia has several policy initiatives pertaining to poverty reduction. The Long-term Development Plan (RPJP 2005-2025) tackles this issue with a three-pronged approach: focusing on the disadvantaged in remote areas, increasing food security, and developing rural areas. Similarly, the target of the Medium-term Development Plan (RPJMN 2015-2019) is economic independence by promoting self-reliance and through higher, sustainable, and inclusive growth. One strategy for poverty reduction pushed by the GoI is the implementation of a subsidized rice program and a conditional cash transfer program aimed directly at food and energy security.

Human Rights in Indonesia:

The Government of Indonesia has ratified 8 out of the 9 core UN human rights treaties, including the Covenant on Civil and Political Rights (ICCPR) and the UN Covenant on Economic, Social and Cultural Rights (ICESCR) and has thereby made a commitment to implement the human rights principles and standards enshrined in these treaties at the national level. In 2015, the government adopted a second National Action Plan on Human Rights 2015-2019 (RANHAM). The Plan includes the goals, strategies, and priority activities to be implemented to ensure the protection, promotion and fulfilment of Indonesian citizens, particularly special interest and marginalized/underprivileged individuals and groups. However, despite these commitments made by the government, a number of challenges remain.

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Inter-linkages between climate change, gender and human rights in Indonesia

While the poverty rate for Indonesia is perilous at 10.64% in 2017, this number is expected to rise due to climate change. Inhabitants of rural areas are affected by the impacts of climate change: the aftermath of natural disasters and the degradation of natural resources acutely affect coastal communities, landless farmers, and forest dwellers through diminished returns on traditional methods of livelihoods and quality of life.

Both men and women are affected by the impacts of climate change - however in drastically different ways. It is widely acknowledged that due to persisting social norms and the different gender roles assigned to them in most societies, women are more vulnerable and face higher poverty risks as a result of climate change and related impacts from extreme weather events. It has been shown that existing inequalities between men and women will be exacerbated if climate change mitigation and adaptation efforts are not gender sensitive. For example, women are particularly vulnerable to the impacts of climate change with regard to access to food, energy, health and water. In addition, women who traditionally play an active role in the management of forest resources are often not involved in decision-making processes due to social norms, roles, and power structures. Women’s involvement is further threatened by the changes from environmental degradation which will decrease the number of forest resources. Therefore, gender-specific inclusionary measures are needed to target these gaps.

Climate change threatens the full enjoyment of a wide range of rights, including the rights to life, health, water, food, housing, development and self-determination, especially for the poor and marginalized sections of society. Combined vulnerabilities can also increase the impact climate change may have on the rights of individuals in Indonesia. For example, women from a lower socio-economic strata and Indigenous communities are triply marginalized due to their social standing in gender, class, and ethnicity.

There is a significant risk that governments’ climate change responses adversely jeopardize gender equality, poverty reduction efforts and the promotion of transparency and participation if climate responsive budgeting reforms fail to take these issues into account.

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Indonesia’s Climate Change Targets

National Action Plan on Climate Change Mitigation (RAN-GRK)

Developed by the Government in 2011, the RAN-GRK aims to tackle GHG emissions and commits to reducing GHG by 26% on its own efforts, and up to 41% with international support, against the business as usual (BAU) model by 2020. The action plan covers five sectors: forestry and peat land, energy and transportation, agriculture, industry, and waste management

National Action Plan for Climate Change Adaptation (RAN-API)

Developed by the Government in 2014 to ensure that low carbon development goes hand in hand with the country’s resilience in anticipating adverse impacts of climate change. The action plan explicitly acknowledges gender equality as an essential issue in climate change related action. Both the RAN-GRK and the RAN-API have been adopted in the cross-cutting programs of the national mid-term development plan (RPJMN 2015-2019) with target of reducing GHG emissions and increasing climate resilience.

Indonesia’s Nationally Determined Contribution (NDC)

Released on 24 September 2015, Indonesia’s NDC includes an unconditional GHG emissions reduction target (including land-use, land-use change and forestry (LULUCF) emissions) of 29% below BAU and a conditional 41% reduction below BAU by 2030 (with sufficient international support).

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Our Theory of Change

The Challenge

Despite Indonesia’s ambitions towards clean development, Indonesia’s economy can still be referred to as a ‘brown’ economy because of the high and intensive use of energy and carbon, and ongoing exploitation of ecosystem services. The institutional framework has not traditionally promoted inclusive green economy principles, nor has it ensured strong links between any climate change efforts and standards in the arena of planning, budgeting, and monitoring and evaluation. This has contributed to a silo approach which results in an unsustainable development and serious ecosystem degradation.

Our Solution

What is required is a restructuring of Indonesia’s development planning and budget making processes to depart from working in silos to a more integrated approach when tackling climate change. To be truly effective, the greening of local and national budget processes is essential and must be part of promoting gender equality, transparency, and participation -based principles and standards as well as poverty reduction. UNDP’s Governance of Climate Change Finance Programme is working with the Government of Indonesia through the Sustainable Development Financing (SDF) Project in Indonesia to improve domestic budget systems.

Building on the momentum of the SDGs that call for an integrated approach to development, the second phase of UNDP’s Governance of Climate Change Finance Programme represents a timely opportunity to support Indonesia to mainstream other development priorities including gender equality, poverty reduction and transparency, and participation into the budget systems through the climate responsive budgeting reforms that have been established in Phase I.

Domestic budget systems within line ministries currently address these issues independent of each other, however there is a need to stress the interlinkages between gender equality, transparency, and participation and poverty reduction with climate change budgeting systems and for line ministries to make this a priority.

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Our Previous Work in Indonesia

Sustainable Development Financing (SDF)

The SDF project was established in 2014 with aims to assist the GoI in strengthening its capacities in order to ‘green’ the processes of policy decision making, and budget planning and monitoring by focusing on the development and implementation of budget tagging and the performance-based budgeting system. The SDF project is a joint collaboration between UNDP and UNEP’s Poverty–Environment Initiative (PEI), and UNDP’s Strengthening Governance of Climate Change Finance Programme.

Mitigation Fiscal Framework (MFF)

In 2012, UNDP assisted the Ministry of Finance (MoF) to identify the country’s climate mitigation expenditures and income in the country’s first “Mitigation Fiscal Framework”. The arrangement of MFF is used to analyse the effectiveness of government budget allocation for mitigation actions within forestry, peatland, energy and transportation sectors.

Low Emission Budget Marking Scoring System (LESS-2013)

UNDP and MoF have conducted a study on a ‘Low Emission Budget Marking and Scoring System’ (LESS) to institutionalize a climate change mitigation budget tracking and tagging, system at the national level which promotes more effective monitoring of spending on mitigation efforts.

Climate Public Expenditure and Institutional Reviews (CPEIRs)

CPEIRs were conducted at the sub-national level in five separate provinces.(HYPERLINK) The structure and patterns of expenditure related to climate change mitigation (and in some cases adaptation) at the sub-national level were identified from this process and options for a more effective tracking of climate related expenditure at the provincial level were provided. The studies also encouraged integration of climate change issues in the regional RPJM (Medium-term plans).

Climate Mitigation Budget Tagging

Through the SDF project, the budget tagging system has been developed and rolled out to sector ministries mandated to implement climate mitigation actions under the RAN-GRK. Climate mitigation budget tagging is embedded in the MoF regulation since 2014 and has been included in the national budgeting system (ADIK system-Architecture and Performance Indicator) since 2015.

Performance Based Budgeting (PBB) Analysis

Performance based budgeting analysis, which was based on budget tagging results period 2016-2017, has been undertaken and served as a basis for policy makers to evaluate the budget allocation for climate change and consider strategic fiscal instruments needed in the future to narrow the financing gap.

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Our Upcoming Activities

• Budget Tagging and Performance Based Budgeting

  In 2017, the process to develop a budget tagging system for climate adaptation has been started. The revised MoF Regulation has included adaptation budget tagging. This system will be implemented with the new national integrated planning and budgeting system, called KRISNA.

• Climate Finance Landscape Review

  It was determined by the MoF that there is a need to assess the overall national climate change financial landscape, develop a long-term national climate finance strategy and vision with key ministries and local governments and then clearly define what part of the climate finance strategy this budget tagging system can contribute to, in order for the SDF project to better define the best strategic entry points and approach.

Over the coming years, the GCCF team will also:

• Trace the number of budget submissions and budget circulars that have integrated climate change, gender and poverty—stressing the correlations.

Conduct collaborative research to measure the gender and poverty impacts of climate change in key programs in selected sectoral ministries. This will reveal the gaps and overlaps and provide a foundation that will inform responsive budgeting. As part of the implementation process, ensure the inclusion of marginalized and excluded communities, particularly vulnerable poor women and men, directly and indirectly impacted by climate change to add their voices.

• Strengthen the existing budgeting tagging system for climate mitigation and adaptation. This includes working with existing budgeting units in selected sector ministries to enhance their capabilities through capacity building and the provision of technical assistance.

Support the MoF in designing sound climate fiscal policy and strategic fiscal instruments needed in the future to narrow the climate financing gap.

• Design a provincial climate mitigation budget tagging and/or tracking system and (subject to availability of resources) update sub-national climate integrated expenditure analysis (CPEIR). This activity will build the technical capacity of selected local governments to plan, prioritize, budget, access and deliver climate change finance with policy recommendation to improve the participation of marginalized and vulnerable groups/actors in decision making processes.

Through these processes, accountability for gender responsive climate change related investments which have a positive impact on poverty, transparency, and participation will be increased.

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