Washington, D.C. – The government said Thursday (13/10), that the climate change management budget of IDR 28,223 trillion requires the support of financial institutions, especially banks.
Finance Minister Sri Mulyani in a written statement said that the budget cannot be covered by the state budget alone. “The banking support can be like funding projects related to climate change management. I hope that financial institutions will start to be very serious about doing that, because it is impossible for climate change problems to be overcome without all stakeholders working together,” she said.
Climate change mitigation and adaptation can only be handled with financial support from banking financial institutions and the private sector. This is intended so that Indonesia achieves the target of net-zero emissions by 2060. Furthermore, Mulyani said, the majority of the funding needs are for the energy and transportation sectors, amounting to IDR 26,601 trillion or 94 percent of the total funding needs. Meanwhile, funds for handling waste amounted to IDR 829 trillion, Industrial Processes and Product Use (IPPU) of IDR 730 trillion, forestry of IDR 70 trillion and agriculture of IDR 1.4 trillion.
She said that the government has started to introduce climate budget tagging or marking the types of spending that support climate change targets since the last few years. If accumulated, funding from the state budget will cover no more than 34 percent of the total needs each year. Thus, there is still room for 66 percent of the budget needs that can be filled by various parties, including banking financial institutions.
“Climate change is a very serious global threat after the Covid-19 pandemic. If the country and the world are faced with a big shock like a pandemic, at least we have tried the global shock, then climate change will be another shock,” Mulyani said.
In this regard, the government is currently preparing carbon markets and carbon taxes to energy transition mechanisms to intensify the climate change agenda. Sri Mulyani said that another challenge after climate change was the global crisis, due to food and energy and high inflation. The war in Ukraine, he said, caused a supply disruption so that the aggregate supply would also experience a shock, which may not have the same trend as during the Covid-19 pandemic. (Hartatik)
Banner photo: Finance Minister of Indonesia Mrs. Sri Mulyani Indrawati in Speech in Jakarta October 2018 (Ronny Kwok/shutterstock.com)
