Ir. Umiyatun Hayatitriastuti, M.Sc.
ECOSOC SPRING MEETING WITH BWIS, WTO, AND UNCTAD
Special Event on Financing of Climate Change Mitigation and Adaptation
NEW YORK, 14 APRIL 2008
Indonesiawelcomes this panel discussion to explore and share views on the emerging financial needs of responding to climate change.
As with other developing nations, Indonesia is concerned with how its development will be affected by climate change. Addressing the problem of climate change is not supposed to substitute or compete with poverty alleviation, employment creation and infrastructure development.
Meeting the additional financial requirements will be a challenge. Some estimates suggest that $200 billion or more in investments will be needed each year to implement low carbon, climate resilient development. It highlights the importance of existing financial mechanisms and development of innovative financing for mitigation and adaptation. All this must take place together with the implementation of the Monterrey Consensus.
These new responsibilities will fall on the shoulders of government, regional and international financial institutions. Finance and Trade Ministers met for the first time in Bali, in parallel with the thirteenth conference of parties of the UNFCCC. The meetings were to focus more deeply on the implications of climate change on our economy and development goals. A number of concrete outcomes were made at those meetings.
With regards to the Finance Ministers Meeting, it was agreed that the first step that needs to be taken is factoring climate change into development planning and economic policies. It is also in the global interest to improve existing financial mechanisms and develop innovative financing for adaptation and mitigation. It was recognized that a long term, steady flow of funding and investment is needed. Furthermore, an enabling environment to ensure that the needed economic and investment levels can be reached must be in place. The Trade Ministers Meeting recognized the role of trade in global economic development and welfare. However, there was still a divergence of views on how best trade can help mitigate and adapt to climate change, while keeping development objective in mind. Further analysis of the linkages need to be undertaken.
Further to the Finance and Trade Ministers Meeting in Bali, Indonesia welcomes the recent outcomes of the Bangkok Working Group on Long-term Cooperative Action (AWG-LCA). The decision to focus early in the negotiations on finance and technology is encouraging.
This broad consensus emerging from the Bangkok meeting demonstrates the seriousness of the developed nations in helping developing countries adopt low carbon, climate resilient pathways and adaptive measures.
In terms of mitigation, heads of government finance institutions must play an active role particularly in accessing important opportunities related to the carbon market, technology transfer and innovation. However, expectations are past government responsibilities alone. The private sector will also be an increasingly important stakeholder. Incentives to promote mitigation and corporate social and environmental responsibility need to be developed. Furthermore, consumers need to also be given incentives so that they also contribute to mitigation.
In terms of adaptation, we strongly feel that further mechanisms need to be explored. At the moment, the 2% levy from Clean Development Mechanisms cannot meet the needed investments that according to studies are US$ 4 – 37 billion per year. The recommendation of a GDP based levy on Annex I countries merits further consideration.
In closing, allow me to reiterate the centrality of finance and technology. Both are the linking pin between developing country engagement and industrialised country action. Indonesia is now taking steps to reduce emissions from deforestation and promote cleaner future energy initiatives. Other countries are expected to take more promising actions. We must not wait, but take action now in addressing the problem together.
Permanent Mission of the Republic of Indonesia to the United Nations, New York
325 East 38th Street, New York, NY, 10016, USA
Tel: 1.212.972.8333, Fax: 1.212.972.9780 - www.indonesiamission-ny.org