Greater Impact of Innovative Climate Financing is Urged
Despite remarkable examples of climate financing in Indonesia, more effort is needed from the international community to leverage financing from various non-traditional sources, according to panelists of a ‘Paris Agreement’ policy discussion, hosted by the United Nations Development Programme (UNDP) and the French Embassy in Jakarta.
The online discussion marked the fifth anniversary of the Paris Agreement on Climate Change. The event brought together climate finance experts who discussed ways to combat climate change and to intensify the actions and investments needed for a sustainable low-carbon future.
“Identifying more non-traditional sources of climate financing will allow climate spending to be more catalytic and with much more transformative results, as countries strive to reduce emissions and keep their economies thriving at the same time,” said H.E. Olivier Chambard, French Ambassador to Indonesia
Paris Agreement obliges its 195 signatories to undertake ambitious efforts to combat climate change, including a commitment to keeping the rise in global average temperature to well below 2 degrees Celsius above pre-industrial level. It also requires all parties to bring their best efforts through Nationally Determined Contributions (NDCs), such as on emissions – and to strengthen these efforts.
This year’s event – postponed to November 2021- was to take stock of progress so far and to determine the way forward, particularly in light of the COVID-19 pandemic which caused global economic slowdown and recession.
UNDP Indonesia has been working closely with the Government of Indonesia on a variety of climate change issues. This year, the UNDP initiative Climate Promise was designed specifically to review the Nationally Determined Contributions (NDCs), a central component of the Paris Agreement. Indonesia aims to reduce its emissions by 29 percent, unconditionally, by 2030.
For its part, Indonesia has tapped into non-traditional sources of financing to close funding gaps in delivering on its commitment to climate action.
“When it comes to climate financing, the world should look no further than Indonesia as the country has taken pioneering steps in raising billions of dollars to close a sizeable gap between the available public resources with climate financing and investment. UNDP is proud to have a been a partner of the Government of Indonesia to provide innovative solutions in climate financing” said Norimasa Shimomura, Resident Representative of UNDP Indonesia in his opening remarks.
UNDP’s Innovative Finance Lab has worked in partnership with the Government of Indonesia to strengthen public climate finance reform that has enabled the issuance of USD 2.75 billion sovereign green bond through Islamic financing. It was the first green sukuk (Islamic bond) in the world and has shown how innovative financing can help meet the challenges — and how both private and public investment can bolster ambitions for a, low-carbon, sustainable future.
During the webinar, speakers focused on inclusion in policy development and remarked that the Green Sukuk framework, which is currently being developed, would be in line with the framework of the SDGs. Dr. Nana Riana, Deputy Director at Directorate of Islamic Financing, Ministry of Finance noted that the government has committed to be as inclusive as possible and that Ministry would engage in public consultations to ensure input from all.
