Indonesia

International negotiations on climate change have been dogged by mutual recriminations between rich and poor countries, constricted by the zero-sum arithmetic of a shrinking... Show More + global carbon budget, and overtaken by shifts in economic power between industrialized and developing countries. To overcome these "narrative," "adding-up," and "new world" problems, respectively, this paper proposes a new Greenprint for cooperation. First, the large dynamic emerging economies -- China, India, Brazil, and Indonesia -- must assume the mantle of leadership, offering contributions of their own and prodding the reluctant industrial countries into action. This role reversal would be consistent with the greater stakes for the dynamic emerging economies. Second, the emphasis must be on technology generation. This would allow greater consumption and production possibilities for all countries while respecting the global emissions budget that is dictated by the climate change goal of keeping average temperature rise below 2 degrees centigrade. Third, instead of the old cash-for-cuts approach -- which relies on the industrial countries offering cash (which they do not have) to the dynamic emerging economies for cuts (that they are unwilling to make) -- all major emitters must make contributions. With a view to galvanizing a technology revolution, industrial countries would take early action to raise carbon prices. The dynamic emerging economies would in turn eliminate fossil fuel subsidies, commit to matching carbon price increases in the future, allow limited border taxes against their own exports, and strengthen protection of intellectual property for green technologies. This would directly and indirectly facilitate such a technological revolution. Show Less -

Indonesia has numerous hydro power potentials that are not being utilized. The technology for micro hydro energy is well developed and readily available, and the application... Show More + is appropriate for rural electrification. Integrated Micro-hydro Development and Application Program (IMIDAP) aims to expand and promote micro-hydro technology for electricity generation. The overall objectives of IMIDAP include: enhance interest among Indonesian private sector in the micro-hydro power business; increase the number of community-based micro hydro projects; improve the availability and local knowledge of micro hydro technology application; and increase private sector and rural community joint implementation of micro hydro projects. Show Less -

International developments continue to shape Indonesia's near-term economic outlook, but the focus of attention has shifted. In late 2011 the primary concern was the... Show More + deteriorating and uncertain outlook for the global economy and financial markets. Since then there has been further evidence of the slowdown in global economic momentum but also some positive signs, such as from the US, and international financial market conditions have improved. The recent sharp rise in global oil prices has added a new dimension to the situation. In particular, it has increased the projected cost of Indonesia's fuel subsidies. With the benefits of these subsidies mainly going to the wealthier segments of the population, there is a clear need to redirect this spending to more pressing development needs. The deficit in the proposed and approved revised 2012 Budget was 2.2 percent of gross domestic product (GDP), up from 1.5 percent in the original Budget as a result primarily of higher energy subsidies. However, the World Bank estimates that if oil prices average USD 120 over the year, the deficit could rise to 3.1 percent of GDP if there is no subsidized fuel price adjustment or 2.5 percent of GDP if a fuel price rise is implemented in the third quarter of 2012. Improving the business climate for the private sector can also play an important role in raising growth levels, through stimulating investment and entrepreneurship. The recent Doing Business in Indonesia 2012 survey of 20 cities across Indonesia illustrates the progress made in reducing red tape for local entrepreneurs. Yet, many challenges remain. However, there is scope for cities to learn from the best practices of other cities within Indonesia, some of which are already up to international standards, and internationally so as to help close the gap in performance between Indonesia and global leaders. Show Less -

Indonesia is an oil producing country and is the only East Asian member of the Organization of Petroleum Exporting Countries (OPEC). Over the years, this endowment of... Show More + oil resources has been steadily exploited with substantial rents flowing to the government from production and exports of crude oil. The country is also one of the world's largest exporters of another petroleum resource, liquefied natural gas. The introduction of a new oil and gas law in 2001 (the law) provides the policy and legal basis for moving away from the present ineffective and fiscally inefficient fuel pricing and subsidy regime, towards the goal of an independent, reliable, transparent, competitive, efficient, and environmentally friendly petroleum sector that encourages the growth of the national potential and role and at the same time does not exclude the Government of Indonesia (GoI) fully meeting its social responsibility towards certain community groups. Implementation towards achieving the goals set out in the Law has been slow and hesitant. The Indonesian treasury is still saddled with a rather inefficient and ineffective fuel pricing and subsidies regime. This present report identifies a way forward for Indonesia to meet the requirements of the Law. That way forward will progressively eliminate the waste inherent in the present system, signal correct market behaviors to consumers, achieve large fiscal savings and help the economy grow while the any negative impact on the poor and vulnerable are cushioned. Chapter one tracks the recent history to the present situation in terms of petroleum fuels utilization, supply, pricing and subsidies, and identifies some of the key impacts of the prevailing policies. Chapter two identifies the target petroleum fuel market regime based on the goals established in the law, evaluates where the present policy falls short, and proposes measures that will help Indonesia achieve the outcomes that are consistent with the law. Chapter three proposes a step-wise transition that will be required to transform the present regime and at the same time opening the oil products market to the beneficial forces of competition and restructuring Pertamina's downstream operations. Show Less -

This executive summary presents the main findings, recommendations and conclusions of the two separate Environmental and Social Impact Assessments (ESIA) undertaken... Show More + for the construction and operation of two geothermal power plants being developed by Pertamina Geothermal Energy (PGE). The ESIAs were publicly disclosed as preliminary drafts, along with non-technical summaries, in Indonesia and the info shop and were the subject of public consultation meetings in the project-affected areas in October 2010. The project is to utilize geothermal energy, production wells are drilled down into the heated water contained within the earth's crust - the geothermal reservoir. Once these geothermal reservoirs are tapped into, the heated water and steam rise to the surface where the steam is separated and used to power steam turbines, which then generate mechanical energy that can be converted to electricity. Brine and condensate are returned via reinjection wells back to the geothermal reservoir. The development of a geothermal resource is a sequential and lengthy process. Show Less -

The development challenge posed by climate change is putting past gains at risk. Specific areas of Indonesia are highly vulnerable to multiple climate change hazards.... Show More + In fact warming is not the greatest risk as more intense rainfall and sea-level rise will adversely affect food security, health, water resources, farming and coastal livelihoods, and forest and marine biodiversity. Vulnerability studies show that the economically productive areas of Java, Bali, Sumatra, and Papua are especially vulnerable to these risks. Rapid deforestation, illegal logging, forest fires, and peat-land degradation cause emissions, deplete Indonesia's natural assets, undermine revenue generation potential, and undermine community livelihoods. Indonesia emits significant amounts of greenhouse gases (GHGs), mostly from forest loss and land-use change. Deforestation and fires/haze reduce Indonesia's development potential and undermine its international reputation. Most deforestation and fire losses occur in just 10 provinces (78 percent of dry forest loss and 96 percent of swamp forest loss). Riau, Central Kalimantan, and South Sumatra alone account for over half of all forest degradation and loss. While efforts to measure emissions more precisely continue, there is a broad consensus within the Government of Indonesia (GoI) that forestry and land-use are key targets for mitigation. Indonesia should prioritize and mainstream climate change concerns in its development agenda and evaluate what actions make the most economic, social, and environmental sense. New climate financing instruments and markets can provide an important source of investment or incentives to achieve development objectives that also have climate benefits. Show Less -

The objective of this Country Environmental Analysis (CEA) is to highlight the underlying challenges and opportunities for Indonesia's environment and management of... Show More + its natural resources in order to guide the World Bank support to Indonesian institutions for more sustainable development. Rather, the CEA sets the broader context (chapter one) and economic costs of environmental degradation (chapter two) in order to identify underlying challenges and opportunities. These are divided into two sets of priorities those related to environmental governance and those that are more sectoral in nature. Environmental governance encompasses the decentralized framework for environmental management (chapter three), enabling policies for greater environment and resource sustainability (chapter four) and building environmental constituencies (chapter five). The sectoral challenges that are most important for Indonesian development are vulnerability to climate change (chapter six), land use and climate change (chapter seven) and energy and climate change (chapter eight). The report concludes with options for a more sustainable Indonesia, including recommendations for how the World Bank can more effectively invest in light of the CEA findings (chapter nine). Show Less -

The importance of forests in mitigating climate change, balanced with the need for participation of forest-dependent communities in developing forest conservation initiatives,... Show More + is without question. Of relatively recent interest is determining how governments at all levels, the private sector, non-government organizations and local communities can work together to ensure equitable distribution of benefits from initiatives targeted at reducing emissions from deforestation and forest degradation (REDD). Many countries have expressed their preference for forestry offsets, which are seen as an effective mechanism to channel carbon finance funding to developing countries capable of protecting their forests. To successfully accomplish this, challenges and questions remain, not least of which are: accurately measuring forest carbon emissions savings; the types of forests that can/should be included; ensuring REDD forests can remain standing for the long-term; effectively preventing illegal logging and losses due to fire; and the avoidance of leakage, i.e. the cessation of logging in one area leading to deforestation in another. In Asia, Indonesia has become the epicenter for REDD trial programs because of its existing, large tracts of forest undergoing rapid deforestation. With nearly 100 million ha of state forests, Indonesia contains the world's third largest area of tropical forests (after Brazil and Congo) and is, consequently, one of the world's largest greenhouse gas emitters, making Indonesia a key player in forest-related carbon projects. Show Less -

The brief includes the following headings: land use conversion contributes to high rates of greenhouse gas emissions; poor forest and land use management have long-term... Show More + social and economic costs; forest and land use sector: upstream policies and distortions impede progress and impose cost on society; focused efforts towards better forest management; and international forest carbon financing can benefit Indonesia. Show Less -

This economic update highlights the following in its overview: growth in Aceh's non-oil and gas economy slowed in the first half of 2008 as the reconstruction effort... Show More + neared an end; the agricultural sector grew by 4.5 percent in the first six months of 2008, slightly higher than in the first six months of 2007; despite low growth, private consumption seems relatively unaffected; and inflation is declining. For the first time since the tsunami, inflation in Aceh is lower than the national level. This paper includes sections on: overview; gross domestic product; employment; trade; banking sector; inflation; and economic outlook 2008. Show Less -