Indonesia Climate Change Trust Fund ICCTF PROGRESS REPORT

Indonesia Climate Change Trust Fund ICCTF PROGRESS REPORT 2010 - 2012 January 2013 The Indonesia Climate Change Trust Fund (ICCTF) is a national-m...
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Indonesia Climate Change Trust Fund

ICCTF PROGRESS REPORT 2010 - 2012

January 2013

The Indonesia Climate Change Trust Fund (ICCTF) is a national-managed trust fund that aims to contribute effectively and efficiently to mainstreaming climate change issues in government planning and the implementation of climate change activities across Indonesia. The establishment of ICCTF demonstrates the commitment of the Government of Indonesia to address climate change following the principles of the Jakarta Commitments to enhance national ownership and improve aid coordination. ICCTF was established through two Ministerial Decrees by the Minister of National Development Planning: No. KEP. 044/M.PPN/HK/09/2009 No. KEP. 059/M.PPN/HK/09/20I0 In addition to these Ministerial Decrees, the Government of Indonesia issued Presidential Regulation No. 80 Year 2011 to provide further guidance on the establishment and operation of national trust funds.

Contents 1 | INTRODUCTION 2 | ACTIVITIES 2.1 | Funded Projects 2.2 | Participation in the UNFCCC COP 2.3 | Policy Coordination Forum 2.4 | Steering Committee Meeting 2.4 | CSOs Meeting 2.5 | Development of RAN and RAD GRK 3 | CLIMATE CHANGE INITIATIVES IN INDONESIA 4 | CHALLENGES AND THE WAY FORWARD

Indonesia Climate Change Trust Fund ICCTF Progress Report 2010-2012 First printed December 2012

ICCTF Secretariat Wisma Bakrie 2, 6th floor, Jl. H.R. Rasuna Said Kav. B-2, Jakarta 12920, Indonesia Phone: +62 21 57945760 Fax: +62 21 57945759 Email: [email protected] Web: www.icctf.or.id 1

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1Introduction PROGRESS REPORT 2010 - 2012

Introduction

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n light of climate change as a major emerging environmental threat influencing the national development agenda of Indonesia, the Government of Indonesia (GoI) has made a decision to be at the forefront of efforts to reduce carbon emissions. At the G-20 Summit in September 2009, the President of Indonesia pledged to reduce GHG emissions by 26% unilaterally (against projections of business as usual emissions), with a possibility of up to a total of 41% reduction with international support by year 2020. To meet its national emission reduction targets, the GoI developed the Indonesia Climate Change Sectoral Roadmap (ICCSR) as a policy guideline for mitigation and adaptation measures. A National Action Plan for Greenhouse Gas Emission Reduction (RAN-GRK) was formulated as Presidential Regulation No. 61/2011 to operationalize these mitigation activities. RAN-GRK elaborates sector-specific mitigation targets for five main sectors and identifies programs and activities to achieve emission reduction goals. To harmonize and coordinate the international support for climate protection activities, the GoI then established the Indonesia Climate Change Trust Fund (ICCTF) in 2009 as Indonesia’s first nationally managed climate change trust fund. Jointly launched by Minister of National Development Planning and the Minister of Finance on 14 September 2009, ICCTF is established by Bappenas Ministerial Decree No.44/M. PPN/HK/09/2009 in September 2009 and its revision No.59/M.PPN/HK/09/2010. To date, ICCTF is the only national trust fund in Indonesia on climate change, led and managed by the Government of Indonesia (GoI) to attract, manage KEY ACHIEVEMENTS and mobilize financial investments in climate change mitigation and • ICCTF has become fully operational, adaptation. ICCTF is projected to be successfully selecting and funding three Indonesia’s first national trust fund pilot projects implemented in different managing grants on climate change locations across Indonesia. A new batch in-line with the new Presidential of project funding is currently on-going Regulation No.80/2011 on Trust to be implemented until 2014. Funds. Since its establishment in 2009, ICCTF has become a key • ICCTF solidified its institutional financing mechanism for climate framework to become a legitimate change initiatives in Indonesia and has financing mechanism supporting the provided a crucial policy platform for GOI’s initiatives on climate change, and dialogue and collaboration for those is recognized at international, regional, initiatives, involving all stakeholders at national and local levels. international, regional, national and • ICCTF developed a business plan and local levels. investment strategy, including priority Along with the evolving process programs and proposed activities with of ICCTF, a lot of activities have been associated budgets. facilitated and inspired by ICCTF. • The National Council on Climate Change Therefore, it is necessary to report (DNPI) endorsed ICCTF as Indonesia’s all of the existing progresses, current National Implementing Entity (NIE) under challenges and the future steps that the UNFCCC Adaptation Fund. should be taken by ICCTF.

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2Activities PROGRESS REPORT 2010 - 2012

Activities

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CCTF established three high priority “windows” for financing responses to the risk of climate change, namely Land-based Mitigation, Energy and Adaptation and Resilience Window. To meet the ICCTF objectives, strategies for each window are developed as follows:

a.

The Land-based Mitigation Window aims to reduce GHG emissions by supporting afforestation/reforestation activities along with sustainable agriculture and forest management and by avoiding deforestation activities. The finance activities focus on strengthening the institutional setting and capacities as well as reforming forest governance. It will also support technical assistance on the development of adequate methods to measure reduced emissions from sustainable landbased activities and on improved monitoring and information systems.

b.

The Energy Window is expected to significantly reduce GHG emissions linked to energy supply and energy demand, encompassing the financing of low-carbon energy supply technologies and the implementation of energy conservation and efficiency measures.

c.

The Adaptation and Resilience Window strives for preparing Indonesia’s national and local institutions, and vulnerable communities, for the current and future impacts of climate change by enhancing the dissemination of climate information, developing and improving the design of adaptation strategies, utilizing appropriate technology and knowledge, and establishing favourable policies for supporting adaptation activities change.

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2.1 Funded Project The ICCTF Steering Committee has approved three pilot projects to be funded in the first batch funding of ICCTF in 2010-2011. The pilot projects covers the area of sustainable peatland management (land based mitigation window), energy conservation (energy window), and public awareness raising and education (resilience and adaptation window).

PILOT PROJECT 1:

SUSTAINABLE PEATLAND MANAGEMENT

PROGRESS REPORT 2010 - 2012

The Land Based Mitigation Window pilot project: ‘Research and Technology Development of Sustainable Peat Land Manage-ment to Enhance Carbon Sequestration and Mitigation of Greenhouse Gas Emissions’ was implemented by the Ministry of Agriculture (MoA). Contextual Relevance Indonesia’s peat land covers approximately 20 million hectares, and stores more than 40 Gt of carbon. Various land activities such as land clearing, burning, and draining of peat land are known to cause carbon oxidation, and result in emission of CO2. At the time of this project, there was no accurate baseline for the GHG emissions from peat lands. Because peat land covers such a vast area and has potential to be a large source of GHG emissions, ICCTF determined that establishing a baseline of GHG emissions as well as developing guidelines for the effective management of peat lands would be necessary for reducing GHG emissions. In addition, sustainable peat land management is strategically significant because the peat lands have the potential to become the reserve lands for national food security program. 6

PROGRESS REPORT 2010 - 2012

Project Description In order to develop the sustainable peat land management guidelines necessary for reducing GHG emissions, this project helped set a baseline of GHG emissions and carbon sequestration from different types of peat land usage and created maps of biophysical characteristics and properties of peat lands in a number of Indonesian provinces. The data, map and guidelines produced from this project will be used to develop a nationwide guideline on sustainable peat land management. This project aims to: (1) Measure peat land related GHG emission/carbon stock; (2) Map and identify peat land profile at four selected locations; (3) Collect and process data on GHG emissions and identify emission factors to support the sustainable peat land management practices that reduce GHG emissions; and (4) Develop a policy brief and guideline on sustainable peat land management.

Pilot Project Name Research and Technology Development of Sustainable Peat Land Management to Enhance Carbon Sequestration and Mitigation of Greenhouse Gas Emissions Executing Agency Ministry of Agriculture (MoA) Total Budget US$ 1,166,208 Expected Output emissions data, research reports, guidelines and policy brief for sustainable peat land management Project Sites • Banjarbaru, South Kalimantan; • Jabiren, Central Kalimantan; • Muaro, Jambi; • Pelalawan, Riau.

project is the development of Indonesia’s Executing Agency: Ministry first national guideline forof sustainable Agriculture (MoA) peat land management. These include guidelines on: (1) Total Budget: US$Peatland 1,166,208identification and characterization; (2) Measurement of Expected Output: emissions data, greenhouse gas emissions from research reports, guidelines and peat policyland: for sustainable peat land in peat land; (3)brief Carbon stock measurement management and (4) Demonstration plots to reduce greenhouse gas emission from peat land. Project Sites: - Banjarbaru, South Kalimantan; - Jabiren, Central Kalimantan; - Muaro, Jambi; - Pelalawan, Riau.



Through ICCTF funded project, we wanted to develop guidelines for degraded peatland management, in which we can also increase its productivity and at the same time improve the quality of human resources in GHG emission and carbon sequestration measurement at national and local levels. The ICCTF project has been an important milestone in an effort to map degraded peatlands throughout the country Muhrizal Sarwani, Head of Indonesian Center for Agricultural Land Resources Research and Development, Ministry of Agriculture



Pilot Project Name: Research and Technology Development of Sustainable Peat Land Management to Enhance Achievement Carbon Sequestration and Mitigation of The most significant Greenhouse Gas Emissionsoutput of this

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Pilot Project 2

Energy Efficiency in Steel, and Pulp and Paper Industries

The Energy Window pilot project: ‘Energy Conservation and CO2 Emission Reduction in Industrial Sector (Phase 1)’ was implemented by the Ministry of Industry (MoI). Contextual Relevance Energy consumption in 2008 for the industry sector was 49.14% of the total national energy consumption in Indonesia. Some surveys indicated that energy consumption in this sector could be reduced by 15-30% through energy saving practices. Steel and pulp and paper industries are two of the eight groups defined as energy intensive industries in Indonesia. Therefore, increasing energy efficiency in these industries can significantly contribute to the effort of reducing GHG emission.

Project Description In order to identify energy saving opportunities in steel and pulp and paper industries, this project created a baseline for CO2 emissions and established a data system to manage the emission data. This resulted in the identification of energy saving practices, and the development of industry guidelines on implementation of energy conservations and reduction of CO2 emissions. The objectives of this project are: (1) To strengthen MOI capacity in coordinating, developing, and supporting the implementation of energy conservation in the steel and pulp and paper industries; (2) To facilitate energy efficiency and energy conservation in target industries; and (3) To increase capacity of target industry companies to realize energy conservation and CO2 emission reductions.

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PROGRESS REPORT 2010 - 2012

Pilot Project Name Energy Conservation and CO2 Emission Reduction in Industrial Sector (Phase 1). Executing Agency Ministry of Industry (MoI) Total Budget US$2,035,966 Expected Output Standard Operating Procedures, System Information Management of Energy Audit from each participating industry Project Sites 18 cities all over Indonesia

Implementing Agency: Ministry of Industry (MoI) Total budget: US$2,035,966 Expected Output: Standard Operating Procedures, System Information Management of Energy Audit from each Achievements participating industry

This project enabled companies Project sites: 18 cities all over to utilize energy usage audit data to Indonesia develop/implement energy efficient practices. Further, the project established Indonesia’s first technical guidelines for energy efficiency and conservation for the steel and pulp and paper industries. Based on these successes, the MOI is preparing for the second phase of this project to create an energy service company model implementation in the industrial sectors.



PT. Pindad has committed to energy conservation program and built an energy management team to develop and manage efforts of energy conservation in our facilities. In 2010-2011, through ICCTFfunded project we have run an audit on energy consumption and come up with several recommendations. We commit to the recommendations as we work on the implementation with our own internal funding.Implementing energy conservation measures recommended by ICCTF project, PT. Pindad has reduced its energy consumption by 12-15% Silaningsih, Advisor for Energy Management Team, PT. Pindad



Pilot Project Name: Energy Conservation and CO2 Emission Reduction in Industrial Sector (Phase 1).

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Pilot Project 3

Public Awareness on Climate Change and Education

The Resilience and Adaptation Window pilot project: ‘Public Awareness, Training and Education Program on Climate Change Issue for All Levels of Societies in Mitigation and Adaptation’ was implemented by the Agency of Meteorology, Climatology, and Geophysics (BMKG). Contextual Relevance Indonesia is the largest archipelago in the world, with approximately 230 million inhabitants on 17,000 islands, mostly living along the coastal lines. Therefore, erratic weather patterns have significant impact on their livelihoods, especially for farmers and fishermen. BMKG was chosen as the executing agency for the project because of its mandate to provide climate and meteorological information to the public to forecast seasonal weather changes and help agricultural and fishery sectors adapt to the changing climate.

Project Description In order to create a better adaptation response to the changing climate, this project employed different methodologies to increase awareness among the general public of the effects of climate change. These included using local community radio programs, providing training on climate change mitigation and adaptation and developing educational curriculum on the impact of climate change. The objectives of this project are: (1) To enhance awareness of climate change and food security issues among the targeted communities and extension workers in the agriculture and fishery sectors; and (2) To establish climate change education modules for different levels of education to be distributed and used in all levels of the education system.

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PROGRESS REPORT 2010 - 2012

Pilot Project Name Public Awareness, Training and Education Program on Climate Change Issue for All Level of Societies in Mitigation and Adaptation. Executing Agency BMKG (the Agency of Meteorology, Climatology, and Geophysics Total Budget US$1,127,917 Expected Output radio programs, training for trainer modules for field extensions and educational module on climate change Project Sites Serdang Bergadai, North Sumatra; Batu, Malang, East Java; Bau-Bau, Sulawesi; Kamal Muara, North Jakarta; Indramayu, West Java

in Indonesia.

Issue for All Level of As part Climate of theChange pilot project, BMKG used Societies in Mitigation and Adaptation. the community radio program for the first Agency: BMKG (the time as aImplementing way to increase the awareness Agency of Meteorology, Climatology, Geophysics on climateand change and food security issues among the farmers fishermen in five Total budget: and US$1,127,917 most vulnerable provinces in Indonesia. Expected Output: radio programs, BMKG also employed new typesforoffield media training for trainer modules andto educational on and TV extensions programs attractmodule broader climate change audiences and to make information on Pilot project sites: Serdang climate change adaptation andBergadai, mitigation North Sumatra; Batu, Malang, East Java; efforts more accessible to the general Bau-Bau, Sulawesi; Kamal Muara, North Indramayu, public. InJakarta; addition, BMKGWest alsoJava developed training modules and conducted training sessions on climate change mitigation and adaptation measures for approximately 400 extension workers in the agriculture and fishery sectors. These extension workers, in turn, went to rural areas to share their new knowledge with hundreds of other local workers, farmers and fishermen. Lastly, for the first time, BMKG developed curricula on climate change awareness for all levels of schools



Our appreciation to ICCTF for choosing Bau-bau city as one of the pilot project to disseminate the impact of climate change, and its adaptation measures particularly for farmers and fishers through community radio programs. The ICCTF project also gave ways for our teachers and field extensions to have further training and education on the impact of climate change which in turn transferred into local curriculum. Sudjiton, Head of Regional Development Planning Board (Bappeda) of Bau-bau City, Southeast Sulawesi



Pilot Project Name: Public Awareness, Achievements Training and Education Program on

Building on these achievements, BMKG distributed the educational module and publication materials developed in this project to schools and BMKG stations throughout Indonesia and measure their effectiveness.

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Project Lessons Learned The three pilot projects funded by ICCTF have provided some lessons learned:

First, ICCTF learned that the best way to monitor and supervise the implementation of the funded project is through a “participatory approach” or an approach that accommodates the needs and the concerns of the participants. In this process, the ICCTF Secretariat closely oversees the pilot projects and provides support and coaching to the PMU in preparing financial reports, monitoring and evaluation reports, and other project management practices as requested by the executing agencies. Through this approach, the executing agencies were able to provide their input and feedback to the coaching sessions and inform ICCTF of the specific needs that each agency required to comply with the requirements of the ICCTF.

Second, ICCTF learned that a thorough consideration and analysis was necessary to ensure that the selected projects are aligned with the national priorities and that the implementing entities have the adequate capacity to effectively implement the projects.

Third, the standardized monitoring and evaluation procedures at the initial phase of project

implementation were not fully followed by the pilot projects. ICCTF, in response, developed its own monitoring and evaluation framework for each pilot project to ensure timely and effective completion of the project.

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PROGRESS REPORT 2010 - 2012

New Projects 2012-2014 Furthering the project appraisal process conducted by Technical Committee, on July 2012, the Steerng Committee granted funding approval for 3 new ICCTF projects to be implemented in 2012-2014. The new projects include the following:

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Sustainable Degraded Peatland Management (ICCTF-MoA)

The Ministry of Agriculture will implement the project “Sustainable Management of Degraded Peatland to Mitigate Green House Gas Emissions and Optimize Crop Productivity” as a continuation of previously ICCTF funded project in 2010-2011. The project is focused on efforts to sustainably manage degraded peatland in order to support mitigation of GHG emissions and to increase agricultural productivity. Based on the framework, this project attempts to enhance agricultural productivity and socio-economic aspect. There are 2 new project locations of demonstration plot in Papua and West Kalimantan, in addition to Riau, Jambi and Central Kalimantan as in previous project. The expected outputs of this project include (1) maps of degraded peatlands in Papua, Sumatera and Kalimantan, (2) models and strategies on sustainable peatland management, (3) individual and institutional capacity building in research management and peatland monitoring; (4) policy recommendation and guidance for sustainable peatland management based on socialeconomy and environmental aspects; and (5) publication and networking among national and international research agencies, government and non-government agencies, universities and farmer groups.

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Community Forest Management (ICCTF-MoFor)

The project “Enhancing Sustainable Management of Community-Based Wood Pellets Production as Biomass Energy to Support Low Carbon Economy and Climate Change Mitigation in Bangkalan, Madura, East Java” will be implemented by the Ministry of Forestry in collaboration with local government and community in Madura, East Java. The project is aimed to develop models of biomass energy estate that will support mitigation to climate change, with focus on community forest management. The outputs to be delivered by this project include (1) demonstration plot of biomass energy estate, (2) measurement of the net emission of CO2 absorbed by the biomass energy estate and CO2 net emission substituted by wood pellet product, (3) development of business, institution and incubator of wood pellet industry, and (4) capacity building for community and institutions.

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Health Vulnerability Assessment (ICCTF-MoH)

A new adaptation project namely “Health Vulnerability: Assessment, Mapping, and Community Based Adaptation on Dengue Hemorrhagic Fever (DHF) and Malaria Diseases” will be implemented by the Ministry of Health in collaboration with the University of Indonesia. The project is aimed at increasing preparedness to the changing Dengue Hemorrhagic Fever and Malaria Diseases pattern induced by climate change. The expected outcome is increased capacity of health officials, officers and policy makers to respond to changing DHF and Malaria Diseases pattern induced by climate change based on additional information on the link between climate change and DHF, Malaria and the distribution of vulnerable population. The project is expected to deliver three outputs including (1) Model of DHF and Malaria incidence linked with climate change projection complemented with diseases distribution maps developed for each of 21 cities/districts in 5 provinces: West Sumatera, DKI Jakarta, East Java, Bali and Central Kalimantan, (2) Increased awareness of health officers and policy makers at provincial and districts level on climate induced DHF and Malaria and vulnerable communities in West Sumatera, East Java and Bali, (3) Increased capacity of health officials and community to develop adaptation strategies in response to climate change induced DHF and Malaria in West Sumatera and East Java. 14

PROGRESS REPORT 2010 - 2012

2.2 Participation in the UNFCCC COP

UNFCCC COP 17 Durban, 2011 Since its establishment in 2009, ICCTF has been involved in UNFCCC COP as part of its effort to maintain and develop network at international level. In 2011, ICCTF participated in the COP 17 in Durban, South Africa on 28 November – 9 December 2011 as part of the Indonesian delegation. During the event, a Side Event on Indonesia was held on December 6, 2012. Over 160 people from various background (developing partners, Indonesian government officials, Indonesia’s and International NGOs) attended the side event to see country examples of low carbon development policies and programs in Indonesia. The Indonesia’s Side Event was opened by Indonesia’s Minister of Environment, Mr. Balthasar Kambuaya. Mr. Rachmat Witoelar, Indonesia’s Special Envoy for climate change, also gave his view and stressed that this side event is a way to demonstrate how Indonesia is highly committed and have made such concrete efforts to walk the talk and put the commitment into action, from national level down to the regional level. The main presentation was given by the Deputy Minister for Natural Resources and Environment of Bappenas, Ms. Endah Murniningtyas, which is an update on the government of Indonesia (GOI) efforts to elaborate the emission reduction commitment, gave by the President. On the side-lines of the conference, several meeting were held with regards to ICCTF work in Indonesia: (1) With OSIRIS, looking at the possibility of future partnership; (2) With BMU, looking at possible direct contributions into ICCTF and the forthcoming capacity development project (Partnerzusage). UNFCCC - COP 18 Doha, 2012 In 2012, ICCTF also participated in the UNFCCC’s 18th Conference of the Parties (COP) in Doha, Qatar, where governments from every country on Earth have an important opportunity to define the way forward for the Durban Platform. Simultaneously, COP 18 is to address the critical issue of how to conclude discussions on climate change issues discussed in the UNFCCC Ad Hoc Working Groups on the Kyoto Protocol and on Long-Term Cooperative Action. COP 18 will also provide an important opportunity to work towards achieving the full potential of other measures discussed in Durban, such as the Green Climate Fund, REDD+ and adaptation. In particular, ICCTF involved in Indonesia Climate Change Day, a Side Event of UNFCC’s 18th COP in Doha, organized by the Indonesia National Council on Climate Change (Dewan National Perubahan Iklim – DNPI). With a given theme, “Business Response to the Challenges and Opportunities of Climate Change in Indonesia,” the side event held on 1-2 December 2012 in La Cigale Hotel, Doha, Qatar. Represented by the Head of Secretariat, ICCTF hosted the parallel session III of the Workshop on Finance and Investment to share its experiences and lessons learned on its establishment, development and operation. 15

2.3 Policy Coordination Forum

Since its establishment, ICCTF has proactively created forums for policy dialogue to develop national and local policies on GHG emission reduction among stakeholders. In particular, calls for project proposals from line ministries for the ICCTF stimulated dialogue among the executing agencies on climate change issues. This was significant because these dialogues encouraged each agency to assess their contribution towards the GOI’s effort to reduce GHG emissions and to ensure that its respective responses are aligned with the national priorities. On 27 January 2011 a meeting attended by representatives from line ministries was initiated by Bappenas to discuss the need for establishing policy coordination forum to strengthen policy dialogue between stakeholders, incuding government agencies with substantive mandate over policy areas related to climate change and development partners from international agencies. Then the first PCF was held on Thursday, 24 February 2011 in Bappenas Office. Aside from representatives of government agencies including Bappenas, Ministry of Environment, Ministry of Forestry, Ministry of Energy and Mineral Resources, Ministry Finance, UKP 4, DNPI, REDD+ Secretariat, and ICCTF Secretariat, this meeting also attended by international agencies representatives including ADB, EU, IDB, FAO, UNDP, UNFPA, World Bank, JICA, AusAID, WFP, USAID, AFD, JBIC, The Netherland, Japan Embassy, and KFW. This meeting was considered as a good initiative and it is suggested naming the forum as the Climate Change Indonesia Coordination Forum. The second PCF meeting was held on July 5, 2011. It was attended by representatives from Bappenas, Ministry of Forestry (MoFor), Ministry of Finance (MoF), REDD+ Task Force Secretariat, European Union (EU), Food and Agriculture Organization (FAO), World Food Programme (WFP), AusAid, US Aid, Royal Norwegian Embassy, Sweden Embassy, UK Climate Change Unit (UKCCU), AFD, JICA, JBIC, World Bank, Japan Embassy, Institute for Global Environmental Strategies (IGES), German Embassy and GIZ. Considering that the Indonesia Climate Change Trust Fund covers broader issues compare to REDD, and others, Bappenas decided that ICCTF will manage this policy coordination forum which also acts as the secretariat to support the forum.

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PROGRESS REPORT 2010 - 2012

2.4 Steering Committee Meeting

During 2010-2012, ICCTF has conducted several Steering Committee (SC) meetings with important milestones as follows: In the Steering Committee Meeting on June 18, 2010 a funding decision was made for Technical Committee recommended projects under PREP-ICCTF. Steering Committee approved the following pilot projects for funding under PREP-ICCTF: •

Project 1: Research And Technology Development Of Sustainable Peat Management to Enhance Carbon Sequestration and Mitigation of Greenhouse Gas Emission. Project Proponent: Ministry of Agriculture.



Project 2: Implementation of Energy Conservation and CO2 Emission Reduction Project Proponent: Ministry of Industry.



Project 3: Public Awareness, Training and Education Program on Climate Change Issue For All Level of Societies in Mitigation and Adaptation. Project Proponent: Agency of Meteorology, Climatology, and Geophysics (BMKG)

In 2011, the Steering Committee Meeting was held on 9 August 2011. The SC meeting agenda was consisting of the update of RAN GRK Plan of Implementation, reviewing progress of ICCTF activities and approval on new projects. During the discussion some key issues were highlighted including the finalization of the Presidential Decree of RAN-GRK, the need for ICCTF to capture lessons learned from the three pilot projects. Other important issue highlighted in the discussion is an agreement to extend the PREP-ICCTF period considering the process of National Trustee selection. The Steering Committee Meeting was held on 3 April 2012. The SC meeting agenda consisting of update on Indonesia’s Climate Change, update on ICCTF, current proposal received, National Trus Fund, and decision on SC Meeting. There were several important issues highlighted in this SC Meeting including project funding, procurement of National Fund Manager, and capacity building for ICCTF Secretariat. During the discussion Deputy Minister for Natural Resources and Environment of Bappenas stated that ICCTF need to focus on the implementation of RAN GRK and also support the adaptation activities. The latest Steering Committee Meeting was conducted on 29 November 2012. Held in Bappenas, the SC Meeting was focused on two main agendas including proposal on extension of PREP-ICCTF and appointment of National Fund Manager. Attended by donor representatives from UKCCU, AusAID, and SIDA, and also from UNDP, the SC meeting was agreed to extend the PREP-ICCTF by 2014. Other important decision is the endorsement for Bank Mandiri as the NFM (National Fund Manager) of ICCTF to run the “cashier” function in ICCTF operation.

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2.4 CSO Meeting

To achieve its goals, ICCTF has worked closely with various stakeholders, including the Civil Society Organization (CSOs). In 2010, ICCTF organized two Civil Society Organization (CSO) workshops to discuss the involvement of civil society stakeholders in the decision making process of ICCTF. The first meeting was held on 30 August 2010, to explain to meeting participants about the role, structure and governance mechanisms of ICCTF. The second meeting was held on 28 September 2010 to discuss mainly two topics: a selection process to select two CSO representatives who would participate in the Steering Committee, and the exact role of those representatives. Approximately 17 CSOs involved in climate change issues in Indonesia such as WALHI, KEHATI, WWF, Pelangi Indonesia, AMAN, KIARA and PMI attended the meetings. The main result of the workshops was the creation of a CSO Forum for ICCTF by CSOs in which they will discuss their role related to ICCTF and how to efficiently contribute to ICCTF. In 2011, ICCTF facilitated the 1st Meeting of CSO Forum on 25 May 2011 at ICCTF Secretariat. The meeting was to discuss on the GOI policies and strategies in addressing climate change issues, particularly related to National Action Plan on Mitigation (RAN GRK) and Adaptation. The event was attended by members of CSO Forum for Climate Justice (CSF), representatives of LPBPI NU, Dompet Dhuafa, and timber association. ICCTF supported the 2nd Meeting of Civil Society Organizations (CSOs) Forum held by Bappenas on 8 June 2012. The meeting was aimed at sharing an update on the implementation of National and Regional Action of GHG Emission Reduction (RAN and RAD GRK). In the event, beneficiaries of ICCTF funded projects also shared their experience in implementing ICCTF project in tackling the climate change impact and furthering the project with their own resources. The ICCTF project beneficiaries include the Head of Bappeda (Local Development Planning Agency) of Bau-bau, Southeast Sulawesi, representative of Cinde Radio and Buyut Musa farmer group from Indramayu, West Java. On October 30, 2012 ICCTF supported a policy dialogue initiated by Indonesia Climate Action Network (ICAN). Attended by representatives from civil society organizations (CSOs) with concern on climate change issues, the meeting was held under a given theme ”Road to Doha: Indonesia’s Expectation on Doha Output”. The dialogue that was led by Institute for Essential Services Reform (IESR) as the coordinator of ICAN aims to enable the civil society organizations in understanding Indonesia’s positions for the international climate change negotiation in Doha, by creating a space for a multi-stakeholders dialogue.

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PROGRESS REPORT 2010 - 2012

2.5 Development of RAN and RAD GRK

In 2009, Indonesia announced its commitment to mitigate climate change in the form of 26% of greenhouse gas (GHG) emission reduction with national efforts and up to 41% of emission reduction with international support by the year 2020. Implementing the commitment, the GOI formulated a National Action Plan on GHG Emission Reduction (RAN GRK) and Regional Action Plan on GHG Emission Reduction (RAD GRK). ICCTF supported the launching ceremony of RAN GRK that was legalized as Presidential Regulation (Perpres) No. 61 Year 2011 on 28 October 2011 at Bappenas. As a follow up from Presidential Regulation No. 61 Year 2011, Ministry of Development Planning/ Bappenas with the Ministry of Environment and Ministry of Home Affairs has officially launched the Guideline to set the Local Action Plan on Greenhouse Gas Emissions Reductions (RAD-GRK) on January 12, 2012. ICCTF in collaboration with GIZ and JICA supported the launching of RAD GRK Guideline, where the guideline also was disseminated to all line ministries and provincial government in Indonesia. The guideline to set the RAD-GRK is a guide for the local government in developing the local action plans in an effort to achieve the national GHG emissions reduction target. It includes: how RAN-GRK relates with development’s policy both at national and local level; governance; technical steps and RAD-GRK’s time line; and matrix of activities that need to be set. ICCTF with other development partners supported series of trainings and workshops on RAD GRK formulation and national BAU baseline in July – December 2012. The trainings and workshops were aimed to assist and facilitate RAD GRK formulation by local government. The events were participated by representatives of provincial government and line ministries. Development partners involved in supporting the events include: AFD, AusAID, GIZ, ICCTF, ICRAF, JICA, SIDA, TNC, UKCCU, UNDP, USAID, and WWF. Consolidation of RAD-GRK developmet was conducted under trilateral cooperation among the Bappenas, Ministry of Environment and Ministry of Home Affairs. As of January 2013, 29 provinces have completed RAD GRK and issued the documents in the form of Governor’s Regulation (Pergub); 3 provinces have completed the RAD GRK and were currently in the process of endorsing the document as Governor’s Regulation; and 1 province was still in the process of completing the RAD-GRK. As a form of appreciation towards provincial efforts for developing its RAD-GRK, the Bappenas, Ministry of Home Affairs and Ministry of Environment officially launched the RAD GRK on December 19, 2012. ICCTF supported the launching ceremony which was attended by the Minister of Bappenas, Minister of Environment, Governors as well as representatives of line ministries, provincial government and development partners.

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Various Climate Change Initiatives in Indonesia

PROGRESS REPORT 2010 - 2012

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ince 2008, the Government of Indonesia has created various institutions and agencies with mandates on climate change policies. Aside from ICCTF, currently there are several agencies working on climate change issues including the Climate Change Council, the agencies at the Ministry of Finance and the REDD+ agency under the Presidential’s Office.

Climate Change National Council The Government of Indonesia established the Climate Change National Council (Dewan Nasional Perubahan Iklim – DNPI) in 2008. The Council was set-up as a national focal point for climate change policy in Indonesia and chaired by the President. The Council has an Operating Secretariat and several working groups tasked to various topics, such as mitigation, adaptation, financial mechanism and technology transfer. It is also tasked with coordinating government policy on climate change which covers mitigation, adaptation, technology transfers and climate change financing as well as performing monitoring and evaluation activities on climate change policies and activities. Finally, the Council is tasked with leading the government in international negotiations on climate change. 21

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Climate Change Initiatives at the Ministry of Finance In 2009 the GoI established Indonesia Green Investment Fund (IGIF) housed in the Centre for Public Investment (Pusat Investasi Pemerintah – PIP) at the Ministry of Finance. The PIP is a sovereign wealth fund managed by the Ministry of Finance. The main purpose of IGIF is to leverage private and market based sources of funding for low emissions development projects. It is designed to invest in a variety of asset classes such as equity, debt, infrastructure, and direct investments. IGIF is set up as a revolving fund that can invest in private operations that have a return on investment. IGIF will catalyse private public partnerships (PPPs) in order to mobilise investment in low-carbon development. At about the same time, the Ministry of Finance also initiated the creation of Centre for Climate Change Financing Policy (Pusat Kebijakan Pembiayaan Perubahan Iklim dan Multilateral - PPKPM) within the Fiscal Policy Unit in 2010 (effective in 2011). The center is aimed to formulate, coordinate and monitor policy on climate change financing at national level and lead on international negotiations on climate change financing. The Centre is in position to lead the design of Indonesia’s low carbon growth strategy. Other climate change initiative under the Ministry of Finance (MoF) is the contribution to efforts related to adaptation and mitigation of climate change, particularly through providing taxes incentives and financing in clean energy sector. On February 26, 2009, MoF established PT Sarana Multi Infrastructure (PT SMI) to accelerate infrastructure development in Indonesia. The legas basis of the establishment of PT SMI are Government Regulation (PP) No. 66/2007 and Law No. 75/2008 which regulate the state ownership in companies engaged in infrastructure financing sector. Responsible to the Minister of Finance, PT SMI provides financing for infrastructure projects in a variety of forms, including loans and equity. Currently PT SMI, through its subsidiary, PT Indonesia Infrastructure Finance (PT IIF) is reviewing a number of investment proposals in the renewable energy sector, especially geothermal power generation and micro-scale hydropower generation (micro-hydro).

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PROGRESS REPORT 2010 - 2012

The REDD+ Agency In May 2010, the Government of Indonesia signed a Letter of Intent (LOI) with the Government of Norway to provide $1 billion for REDD+ finance between 2010 and 2016. The LOI has led to the establishment of a special REDD+ Task Force in 2011 under the President’s Delivery Unit for Development Monitoring and Oversight Working Group under the President‘s office, tasked with the establishment of a REDD+ agency, the completion of a national REDD+ strategy, architecture for REDD+ financing mechanisms; and the preparation of Measurement, Reporting and Verification (MRV) institution to effectively monitor the progress of the moratorium.

ICCTF and RAN GRK Implementation The latest policy guidance document on climate change is the enactment of Presidential Regulations No.61/2011 on the National Action Plan on Reduction of GHG Emission (RAN GRK). The Plan consists of 123 programs in 5 priority sectors: forestry, peatland, energy, transportation, industry, agriculture and waste. This National Action Plan is followed by adoption of Regional Action Plans on Reduction of GHG Emission (RAD-GRK). Therefore, RAN and RAD GRK so far is the most concrete policy guidelines adopted by the Indonesian government and ideally should also inform donors on their climate change programming and funding priorities in Indonesia. Coordinating Ministry for Economy, with Bappenas tasked with periodic reviews of RAN-GRK implementation. Bappenas is also mandated to support the formulation and implementation of RAD-GRK in coordination with Ministry of Environment and Ministry of Home Affairs. Currently, a RAN-GRK Secretariat has been established within Bappenas and is in close collaboration with ICCTF Secretariat.

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and 4Challenges the Way Forward 24

PROGRESS REPORT 2010 - 2012

Challenges

I

CCTF is continuously expanding its capacity and strengthening its core functions as a national trust fund despite the challenges in its initial phase, and will require additional funding in the near future in order to carry out its planned activities. The following are some of the current challenges: 1.

The implementation of 3 new projects in 2012-2014.

2.

Call for Proposal for new batch of project funding in 2013 for the remaining managed fund under UNDP

3.

Formal Appointment of National Fund Manager

4.

Capacity Assessment and Development for ICCTF Secretariat

5.

The search for new fund contribution.



National climate funds are particularly helpful in pulling resources from multiple donors and ensuring the priority projects are allocated with those funds. We have recognized that ICCTF has successfully applied these principles in using adaptation funds in Indonesia, and we have selected ICCTF as our partner in Indonesia



Peter King, Team Leader of USAID ADAPT Asia-Pacific

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Way Forward

A

lthough ICCTF faced some challenges during its initial phase, ICCTF has used these challenges to further improve its institutional capacity. ICCTF recognizes the importance of creating a roadmap for the future. Therefore, to ensure that all of its activities are aligned with national priorities, ICCTF has developed its own Business Plan along with its targets, investment strategies, priority programs and proposed activities with budget. The first two years following its establishment allowed ICCTF to learn from its challenges and further strengthen its capacity. In 2012, ICCTF has been focusing on the following objectives: First, ICCTF has been focusing on and developing the partnerships among the various government agencies. These relationships will become the foundation for the solid national trusteeship entrusted to ICCTF. ICCTF has also been a show case that provides lessons learned on national trust fund establishment as one of the Government’s efforts in addressing climate change issue, along with the GoI’s proposal to be the Knowledge Hub of the South-south and Triangular Cooperation. Second, ICCTF will focus on its transition toward a national trust fund under the framework of Presidential Regulation 80/2011, including the selection of a national trust fund manager. Third, ICCTF will further develop its management system, procedures, and mechanisms, including audits by independent external and internal auditors. These are strategically important improvements that must be made to ensure that projects funded by ICCTF meet internationally recognized standards. Compliance with such international standards will be required for ICCTF to become the NIE for the Adaptation Fund and eventually to qualify as NIE for the Green Climate Fund. Fourth, ICCTF will continuously strengthen its three thematic windows and will eventually extend opportunities to non-governmental institutions and CSOs, universities, local government and private sector so that they too can become implementing agencies of the ICCTF projects. Particularly for private sector involvement, in the near future ICCTF will develop the Transformation Fund mechanism to leverage private sector funds for climate change activities. Lastly, ICCTF will continue to work with the line ministries to realize the vision of ICCTF to be a transparent nationally managed trust fund to facilitate Indonesia’s commitment to reduce GHG emissions by 26% unilaterally and 41% with international support by 2020, as well as to enhance resilience to climate change. With regards to the implementation of NAMAs projects, ICCTF plans to administer the funding under a NAMAs support facility.



We have helped ICCTF in setting up its strategy with the transformation fund and the innovation fund. In the future, we will continue to assist ICCTF to further develop the two funds and to help ICCTF to become an independent nationally managed mechanism that fit for international connection of funding flow for climate change mitigation actions or adaptation actions and fit for private sector engagement. Dr. Dieter Brulez, Head of Programme Environment and Climate Change, GIZ

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PROGRESS REPORT 2010 - 2012



Principal Advisor for Environment and Climate Change (PAKLIM)

ICCTF Secretariat Wisma Bakrie 2, 6th fl, Jl. H. R. Rasuna Said Kav B-2 Jakarta 12920, Indonesia Phone : +62 21 57945760, Fax: +62 21 57945759 Email: [email protected], Web: www.icctf.or.id

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