Indonesia Joins Top Rank Of Climate Action Leadership

Op-Ed / Opinion | 23 March 2010

One of the first international meetings to focus on climate finance since the Copenhagen summit last December ended here in Manila this week with plans to allocate some US$1.1 billion from the new multilateral Climate Investment Funds (CIF) for country-led, low-carbon growth in the Asia and Pacific region.

Indonesia features prominently in these plans.

Some $400 million in support from the Clean Technology Fund (CTF), approved in Manila on Monday, will help mobilize some $2.7 billion in public and private sector financing to help Indonesia nearly double its geothermal capacity and transform the country's use of renewable energy, ultimately supporting the government's objective of meeting its goal of reducing greenhouse gas emissions by 26% by 2020.

In further support to achieving this target, Indonesia is also among the countries named this week that will receive funding for pilot programs to reduce emissions from deforestation under the Forest Investment Program (FIP).

Both programs for Indonesia were approved in advance of the CIF Partnership Forum. It is fitting that this meeting was held in Asia, for this is the region where more people - especially women and the poor - are vulnerable to climate change impacts than in any other part of the world.

On top of that, Asia's energy demand is projected to almost double by 2030, which means that unless development and consumption patterns shift the region will soon become the largest source of new greenhouse gas emissions.

The CTF plan for Indonesia is designed to transform the country's development pattern while supporting its continued economic growth.

It will help unlock geothermal power resources to expand people's energy access while avoiding greenhouse gas emissions, to green urban areas, and to make it financially attractive to tap into the sun's power.

Indonesia has the world's largest geothermal power potential, and the plan allocates extensive co-financing to expand large-scale geothermal electricity generation.

It will also accelerate initiatives to promote energy efficiency and use of renewable energy sources by creating risk-sharing facilities and addressing financing barriers to small- and medium-scale investments.

The low-carbon growth investments in Indonesia are an example of similar programs now approved to receive CTF financing in Kazakhstan, the Philippines, Thailand and Vietnam.

Taken together, these programs will demonstrate how future energy demands can be satisfied in ways that will not generate excessive levels of greenhouse gases. From our vantage point as multilateral development bank partners in helping countries implement these CTF-funded plans, this bold action on the part of Indonesia and other Asian nations is a harbinger of a fundamental shift in climate action around the globe.

And the same sorts of actions are moving forward in developing countries in every region of the world.

While developing countries have not been the primary source of climate-altering greenhouse gas emissions from the past burning of fossil fuels, they are taking positive actions to help achieve a global solution to the common challenge posed by climate change.

As they continue on a path to improved economic prosperity for their citizens, they are making a wise choice to do so in a climate-friendly way that will also help ensure their energy security and improve their quality life.

This climate-smart approach offers lessons which all, including those in developed countries, can look to emulate in coming years.

The CTF is founded on partnerships between policymakers, indigenous peoples, private sector entities, civil society and others.

Its unique governance structure provides equal voice to contributor and recipient countries and it also ensures that the programs it supports are embedded in national development plans.

The CIF's were created in response to the Bali Action Plan, which resulted from the 2007 climate change talks in Indonesia, and called for commitment of new and additional financial resources from developed countries for developing countries to help address the climate change challenge.

A group of developed nations then pledged over $6 billion to the CIFs - a powerful signal of their serious support for developing countries, in helping them to respond to climate change.

Without measures to build resilience to climate change impacts, we know that the 60% of the working population in Asia and the Pacific who rely on agriculture for their livelihoods will suffer tremendously.

Fresh-water availability will fall, irrigation will become more difficult, and millions more children will go home hungry.

The CIFs expect to pilot measures that will support better water and forest management and agricultural adaptation measures that can ensure food security for Asia and the world.

The potential to replicate alternative approaches to energy and food production can transform development, placing us all on a more stable and sustainable footing.

As developing countries pick up the climate reins, we must all stand together to ensure their commitment to climate action is supported at the global level.

The need is enormous, and so is the funding and knowledge gap.

Developed countries must continue to provide financing for investments and knowledge, and a new regime for climate action must emerge. Without such actions, the progress achieved so far cannot be sustained.

Together, the global community must test and apply effective ways to combine reducing poverty, providing economic growth, and building a climate-smart greener future.

The meetings in Manila, buoyed by Indonesia's climate action, offer an important and welcome glimpse into such a future.

At the Asian Development Bank and World Bank, along with our fellow development banks with whom we have joined in a first-time alliance on this issue, we pledge our support to make this future a reality.