Presented at The National Workshop on Mobilizing the Public and Private Sector of Indonesia Towards a Resource Efficient and

d Green Economy Jakarta, 23 September 2010 1

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OUTLINE

1. OBJECTIVES 2. A NEW PERSPECTIVE OF DEVELOPMENT GREEN ECONOMY 3. LONG TERM PERSPECTIVE OF NATIONAL DEVELOPMENT PLANNING 4. SUSTAINABLE DEVELOPMENT PERSPECTIVES IN LONG TERM NATIONAL DEVELOPMENT PLANNING 5. PROPOSED ACTIONS

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1.General condition OBJECTIVES OF PRESENTATION

to review
existing green economy concept/initiatives

to indicate
current Indonesia's policy context and existing initiatives that support the resource efficiency/green economy approach

to suggest
possible new path of sustainable economic approach (toward green economy) in development planning mechanism

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2. A NEW PERSPECTIVE OF
DEVELOPMENT GREEN ECONOMY

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Megadiverse with valuable natural resource assets

General condition

We are one of the ten megadiverse countries and our life depends on natural resources
Our economy has largely been dependent on the productive value of biodiversity (genetic, species and ecosystem) Approximately 24.8% of our GDP comes from management of natural resources such as agriculture, forestry, mining/energy, fishery With population > 230m with growth rate + 1.2%, majority of working force (40%) is in natural resources management sectors

We have valuable assets

Archipelago with the largest waters, the highest number of islands, and the second longest coastal line in the world, located in the equator between two continents and two oceans Abundance natural resources and biodiversity in land, sea, air and space Human resources

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Megadiverse with valuable natural resource assets

General condition

We are one of the ten megadiverse countries and our life depends on natural resources
Our economy has largely been dependent on the productive value of biodiversity (genetic, species and ecosystem) Approximately 24.8% of our GDP comes from management of natural resources such as agriculture, forestry, mining/energy, fishery With population > 230m with growth rate + 1.2%, majority of working force (40%) is in natural resources management sectors

We have valuable assets

Archipelago with the largest waters, the highest number of islands, and the second longest coastal line in the world, located in the equator between two continents and two oceans Abundance natural resources and biodiversity in land, sea, air and space Human resources

GEOGRAPHIC CONDITIONS CONTRIBUTED TO THE INDONESIAN BIODIVERSITY RICHNESS AND UNIQUINESS

Indonesia is a maritime country with more than 17,000 islands laid across Asia and Australian continent. It covers 7.7 million km2 consists of 1.9 million km2 land areas, 3.1 million km2 water, 2.7 million km2 exclusive economic zones with the total coastal line about 80,791 km > 42 type of terestrial and 5 unique marine ecosystem from ice landscape and alpine vegetation in Papua to spectacular coral reefs, sea grass beds and deep weber seas Uniqueness is enriched by 3 demarcation lines and Wallace line

Source: LIPI, 2010

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Narrow persepctive of development

Unsustainable development
This is due largely to a narow perspective of development reducing the carrying capacity and the natural resource availability Anthropocentric economic growth is the root of the problem

Major issues implication or by-product of current development

Biodiversity threat Excessive exploitation of land and marine resources Environmental pollution and degradation Unmanaged growth of population Scarcity of water, food and energy The climate change and global warming

(1) Forest is over exploited; (2) Logged; (3) Converted to many other purposes; (4) No optimal replanting program

Borneo/Kalimantan in a great dangers

Source: LIPI, 2010
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Losing biodiversity
There have been five previous mass extinctions , but the extinction rate this time is faster Rising extinction rates
(based on Norman Meyers, The Sinking Ark - 1980)

70 million years ago 1600-1900 1900-1980 1980 2000

Source: LIPI, 2010

1 per 1000 years 1 every 4 years 1 per year 1 per day 100 per day

Why the lost of biological diversity must be stopped ?

The worst thing that can happen will happen in the 1980s is not energy depletion, economic collapse, ............. As terrible as these catastrophes would be for us, they can be repaired within a few generations. The one process ongoing in the 1980s that will take millions of years to correct is the loss of genetic and species diversity by the destruction of natural habitats. This is the folly our descendants are least likely to forgive us (Wilson, 1980).

Understandin g the value of Biodiversity

Food Health Energy

Source
Oil (Ton/ha)
Source: LIPI, 2010
Coconut 2.070 450

Magainins are small amphiphilic peptides produced by frogs and toads collapsing iongradients and cause lethal swelling of many bacteria.

Microalgae

Soybean

Jatropha 1.460

Alagae 6.757

Economic valuation of non timber product at the conservation site of the Private Company Timber Estate Crops at Province of Jambi - Indonesia

Not include diverse of animal genetic resources e.g. fishes, deer, antelope, amydas etc., as an important source of protein for the future Source: LIPI, 2010

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NEW WAY OF DEVELOPMENT PERSPECTIVE

General condition

Widening the Consideration of Economics beyond the Classical Economists Circular Flow
Source : Green Economics, Molly Scott Cato, 2009

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NEW WAY OF DEVELOPMENT PERSPECTIVE

General condition

Development that considers NOT ONLY a narrow-formal economy, but also see a wider perspective of development
Social Resource Economy Natural Resources Economy

TOWARD sustainable development

Meets the needs of the present without compromising the ability of future generations to meet their own needs. Must be economically viable, socially just, and environmentally sound

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NEW WAY OF DEVELOPMENT PERSPECTIVE

General condition

CONCEP INITIATOR KEY FEATURES T Green UNEP The process of reconfiguring businesses and infrastructure Economy to deliver better returns on natural, human and economic Initiative capital investments, while at the same time reducing (GEI) greenhouse gas emissions, extracting and using less natural resources, creating less waste and reducing social disparities Green UNIDO Industry to position economies on more sustainable pathways of growth by undertaking green public investments and implementing public policy initiatives that encourage greener private investments offer the potential to jumpstart economies the direct employment created in economic sectors and activities, which reduces their environmental impact and ultimately brings it down to levels that are sustainable and decent jobs that contributes to environmental sustainability a policy focus for the Asia and Pacific region that emphasizes environmentally sustainable economic progress

Green Jobs

ILO (+UNEP)

Green Growth

UNESCAP

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3. LONG TERM
PERSPECTIVE OF NATIONAL DEVELOPMENT PLANNING

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3.1General condition . POLICY DEVELOPMENT CONTEXT

Related Policy Development : 1.Long Term National Development Planning (RPJP) 2005-2020(Law No. 17/2007) 2.Medium Term National Development Planning (RPJM) 3.National Priority 4.10 Presidential Directive, Tampak Siring 2010 5.Program Pembangunan yang Berkeadilan (Presidential Decree No. 3/2010)

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Long Term National Development Planning (RPJP) 2005-2020

Vision:
Indonesia that self-confidence, onward, just and wealthy

Missions
1. Realizing asociety thathashighmorals, ethics,culture,andcivilization, basedonthe Pancasila 2. Realizing a nation that is competitive 3. Realizingademocraticsociety based on the rule oflaw 4. Achieving Indonesia safe, peaceful and united 5. Realizing developmentthat is equitable andJust 6. RealizinganIndonesiathat isbalancedandsustainable 7. Realizing an Indonesia as an archipelagonation that is selfreliant, advanced, strong, andthatisbasedonthenationalinterest 8. RealizinganIndonesiathat hasan importantrole in the international community

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NATIONAL DEVELOPMENT PLANNING SYSTEM

National Medium-Term Development Plan (5Years) National Long-Term Development Plan 2005-2025 (20 YEARS) Phase I (2004-2009) Phase II (2010-2014) Phase III (2015-2019) Phase IV (2020-2024)

Annual Government Work Plan (RKP)

RKP 2010 RKP 2011 RKP 2012 RKP 2013 RKP 2014

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MEDIUM TERM NATIONAL DEVELOPMENT PLANNING (RPJM)

RPJM Phase I (2004-2009): Improvement of the natural resource management and environmental quality, natural disaster mitigation, environmental pollution and degradation control, public awareness, and institutional capacity RPJP 20052025 Phase II (2010-2014): Improvement of the renewable energy management, institutional capacity, public awareness, biodiversity conservation, disaster mitigation and spatial planning Phase III (2015-2019): Preservation of carrying capacity, rehabilitation ability, improvement in natural resource management and environmental conservation, and in public awareness and attitude, institutional and spatial planning capacity Phase IV (2020-2024): Preservation of biodiversity and uniqueness of natural resources, improvement of value added, competitiveness and national development assets

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MEDIUM TERM NATIONAL DEVELOPMENT PLANNING 2010-2014 (Perpres 5/2010)

Vision Prosperous, Democratic and Just Indonesia Mission 1.Continue Development to achieve Prosperous Indonesia 2.Strengthen Democratic Pillars 3.Strengthen Justice in every Aspect of Development

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National Priority and Action Plan NATIONAL PRIORITY 2010-2014

1 2 3 4 5 6

Bureaucracy Reform and Good Governance Education Health Poverty Alleviation

Food Security
Infrastructure Investment Climate

11 + 3 National Priority 2010-2014

7 8 9 10 11 12 13 14

Energy Environment and Disaster Management (incl. Climate Change)

Culture, Creativity and Technology Innovation Disadvantaged, Borders and Post-Conflict Areas Politic, Law and Security Economic Development Social Welfare

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MAINSTREAMING SUSTAINABLE General condition DEVELOPMENT CONCEPT IN RPJMN

ENVIRONMENTAL ASPECT Improvement on land and water resource capacity Improvement on Air Quality

Mainstreaming on Sustainable Development

SOCIAL ASPECT Preserving structure and social values Improvement on community participation ECONOMIC ASPECT Economic growth, poverty reduction and social disparities

EXISTING INITIATIVES : 1. Strategic Environmental Assessment (KLHS) 2. Strategy on Poverty Reduction 3. Sustainable Forest Management 4. Sustainable Agriculture 5. Responsible and Sustainable Fisheries

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CROSS SECTORAL POLICY ON CLIMATE General condition CHANGE IN RPJMN

Mitigation: Forestry, Peatland, Energiy including transportation, industry, and waste management Adaptation: Agriculture, Marine and fisheries, Coastal, Infrastructure, and Health Supporting: Data, Information and communication, institutional capacity, research and technologi

Cross sectoral policy on Climate Change

EXISTING INITIATIVES : 1. The Indonesian Climate Change Sectoral Roadmap (ICCSR) support the GOIs development vision related to climate change for the next 20 years 2. Development of Financial Mechanism to Support Climate Change Initiatives (ICCTF) 3. Support GHG emission reduction through development of National Action Plan (RAN-GRK)

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SCENARIO of 2020 GHG Emission Reduction

President Commitment G-20 Pittsburgh and COP15 To reduce te GHG Emission in 2020

26%
Unilateral

26% 15%

41%

Unilateral and International Support

RAN-GRK
The Action Plan is focused on : 1. GHG Emission Reduction 2. Increase of GHG Absorbtion Capacity (carbon sequestration) The Action Plan - principles: 1. should not hinder economic growth, and prioritizing peoples welfare 2. supports protection of the poor and vulnerable communities, including environment conservation in the framework of sustainable development 3. Consists of core activities to reduce the emission and supporting activities to strengthen the policy framework

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10 PRESIDENTIAL DIRECTIVE (TAMPAK SIRING, 2010) 1. Economy must grow 2. Unemployment must be reduced by creating jobs. 3. Poverty reduction 4. Increasing income per capita. 5. Economic stability. 6. Domestic financing. 7. Food security and water. 8. Energy security 9. Economic competitiveness. 10.Environmentally friendly economic development

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4. SUSTAINABLE DEVELOPMENT PERSPECTIVES IN LONG TERM NATIONAL DEVELOPMENT PLANNING

4. SUSTAINABLE DEVELOPMENT PERSPECTIVES IN

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LONG TERM NATIONAL DEVELOPMENT PLANNING

Missions Goals National/Sector Policy & Existing Initiative
1. 2. 3. 4. 5. 6. 7. Government Regulation No.25/2004: National Development Planning System; Law No.17/2007: RPJPN (Long-Term Development Planning) 2005-2025; Law No.32/2009: Protection and environmental management; President Decree No. 43/ 1991: Energy Conservation; Government Regulation No. 41/1999: Forestry; Government Regulation No.70/2009: Energy Conservation; President Instructions No.2/2008: Provide Incentives for Implementing Energy Conservation Programs

General condition

1.Realizing asociety a. whocomplywiththelaw thathashigh morals,ethics,culture, and civilization, basedonthe Pancasila

Minister of Forestry Regulations No.P.37/Menhut-II/2007: Social Community Forest (Hutan Kemasyarakatan) 2. a. thatplacesahighimportanceont Strategic Plan 2010-2014 of MoMAF, Realizinganationthatis hedevelopment MoEMR, MoFr, MoAg, ofqualityandcompetitive human competitive resources

b. whodeveloptheirsocialassets

4. SUSTAINABLE DEVELOPMENT PERSPECTIVES IN

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LONG TERM NATIONAL DEVELOPMENT PLANNING

Missions Goals
b. Increasingthemastery and utilization ofscience and technologythroughresearch,development,an d applicationtowardssustainableinnovation

General condition

National/Sector Policy & Existing Initiative

Strategic Plan 2010-2014 of MoEMR

c. Developmentofadvancedinfrastructure Strategic Plan 2010-2014 of andreforming MoAg, MoPW the lawandstateapparatus 3.Realizingademocratic a. strengthensthequalityofdecentralizationand Law No.32/2004: Local society regional Government based onthe rule autonomy oflaw Government Regulation No. 62/1998: Apportioned Forestry Affairs of Government in the Field to Regional b. reformsthestructureofthe lawandenhancesthelawof cultureandenforcies thelawinajust,consistentandina nondiscriminative way President Instruction No.3/2010: Equitable Development Program Justice for all

5.Realizingdevelopmentt a. reducespovertyandunemploymentdramatica Strategic Plan 2010-2014 of

4. SUSTAINABLE DEVELOPMENT PERSPECTIVES IN

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LONG TERM NATIONAL DEVELOPMENT PLANNING

Missions Goals National/Sector Policy & Existing Initiative
Strategic Plan 2010-2014 of MoEv, MoAg, MoPW, Government Regulation No.32/2009: Protection and Environmental Management. MoAg: ISPO, sustainable agricultural development; MoPW: Green Infrastructure; MoFr: Sustainable Forest Management; MoEv, MoHA, Bappenas: SEA.

General condition

6.RealizinganIndon a. thatisimprovingthemanagementofde esiathat velop- mentthatcan isbalanced maintainthebalance among andsustainable theutilization, sustainability, availability,and uses of thenatural resourcesandenvironment, while stillpreserving the functions, capacity,and comfortsof life inthe present andinthe futurethroughthe utilizationof spacethat isharmoniousfor use for human settlement, for socialeconomicactivities, and for conservation purposes b. Increasestheeconomicuseofnatural resources and theenvironmentinasustainable manner

Strategic Plan 2010-2014 of MoFr; Gov Reg. No.03/2008: Forest & Forest Management Plan & Forest Utilization MoEv: Economic Instrument,incetive system of environmental financing, Green GDP, Develop the guidance & application of economic valuation of Natural Resources & Environment & Environmental Impact; BNI & Bank Mandiri: Green Banking; Bappepam: Green Investment

4. SUSTAINABLE DEVELOPMENT PERSPECTIVES IN

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LONG TERM NATIONAL DEVELOPMENT PLANNING

Missions Goals
d. Providesbeauty and comfortoflife,andincreases the preservationandutilization of bio diversityas the basicassetof nationaldevelopment.

General condition

National/Sector Policy & Existing Initiative

Strategic Plan 2010-2014 of MoFr

MoT: Green Transportation; MoEMR: Energy Efficient Equipment Labeling 7.Realizing anIndonesiaas a. bydevelopingthemarineeconomy Gov. Reg. No.26/2008: National an inanintegratedmannerbyptimizingtheutSpatial Plan (RTRWN); archipelagonationthat ilizationof marine resourcesina Strategic Plan 2010-2014 of is self sustainablemanner MoMAF eliant,advanced,strong,a ndthat isbasedon thenationalinterest
Note:

MoMAF: Integrated Coastal Management

8. MoMAF = Ministry of Marine and Fisheries; MoEMR = international,regional, MoFr = Ministry of Forestry; MoAg = RealizinganIndonesiatha a. encourages Enrgy and Mineral Resources; MoEv: PEMSEA t hasan andbilateral Ministry of Agriculture; MoI= Ministry of Industry; MoPW = Ministry of Public Work; MoEnv = Ministry of Environment importantroleinthe cooperationamong nations, among international community groups and among institutions in various fields

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THERE IS A NEED TO FILL THE GAP AND TO CALL FOR SECTORAL POLICY INTEGRATION

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5. PROPOSED ACTIONS

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5. PROPOSED ACTIONS General condition

1. Integrate related policy framework for promoting green economy development and identify financing needs and mechanism to mainstream the new approach. 2. Apply Principles of Green Budgeting in the Medium and Short Term Development Plan 3. Develop incentives for renewable energy development and acceleration of power plant development using renewable energy 4. Introduce incentives for more environmentally friendly industries 5. to actually apply sustainable development approach in development planning mechanism

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5. PROPOSED ACTIONS General condition

6. Integrate related policy framework for promoting green economy in sectoral development policy both at macro and micro level 7. Define a coherent strategy for Ecosystem & Biodiversity protection strategy (Taking more pro-active role in UNCBD for capturing biodiversity and ecosystem value) 8. Highlights from recent quantitative studies of the impact of green economy for Indonesia with emphasis on instruments (climate change related) 9. Mainstreaming green economy through extended macro economic indicator.

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5. PROPOSED ACTIONS General condition

10. Shifting strategy toward green economy ? a. Low carbon track: Decarbonizing energy and manufacturing sectors b. Ecosystem service tracks: valuing natures environmental services c. Accelerate bio-based economic development e.g. utilizing bioresources preferably unique or endemic to Indonesia for such initiatives d. Full all resources e.g. government, research institutes and Univeristy, private company, community in bio-based economy initiatives e. Direct intervention of the government in implementing biobase economy (infrastructure for ecotourism industry, agrobiodiversity, bioprospecting and its use in pharmaceutical Industry, air and water management)

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CALL FOR SUPPORT TO IMPLEMENT THE PROPOSED ACTIONS

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