Jakarta—Observers say Indonesia needs to immediately harmonise national policies to maximise funding opportunities, as agreed at the 29th Conference of the Parties (COP-29) on Climate Change. However, the funding agreed upon is still far from the target.
According to the COP29 agreement, climate finance from developed countries will be mobilised at USD 300 billion per year by 2035, far below the USD 1.3 trillion target proposed by developing countries.
“This figure is disappointing. Without adequate funding support, it is difficult for developing countries to achieve ambitious mitigation and adaptation targets,” said Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), in the COP29 Media Briefing, Tuesday, December 3.
Fabby emphasised that climate finance, technology transfer, and capacity building are key to a successful energy transition. “Indonesia must immediately revise its policies to strengthen its position in utilising these funds, especially in the energy sector,” he added.
Opportunities amidst challenges
One of the key outcomes of COP-29 was the ratification of the Paris Agreement Credit Mechanism (PACM), which opened up opportunities for carbon trading between countries. This mechanism is expected to encourage global funding flows of up to USD 1 trillion per year by 2050.
Arief Rosadi, IESR’s Climate and Energy Diplomacy Program Manager, cautioned that the carbon market’s effectiveness needs to be continuously evaluated. “The carbon market is not a magic solution. There is a risk that focusing on carbon trading will distract from real emission reductions,” Arief explained.
He said that for Indonesia, the concrete steps that need to be taken are accelerating the energy transition to renewable sources and early retirement of coal-fired power plants, as has been launched by the government.
Arief also highlighted the need for large investments to achieve net zero emissions by 2050. “Indonesia needs USD 20-40 billion per year for energy transition, but the current average investment is still far from that figure,” he said.
Experts agree that Indonesia must move quickly with climate finance opportunities now opening up. Otherwise, other countries that are better prepared may benefit more from these funds. “COP-29 signals that time is no longer in our favour. This is not just about funds, but about the sustainability of our future,” Fabby concluded. (Hartatik)
