Green financing for climate resilience and low-carbon development in Indonesia: viewpoints for the road ahead

Ari Rakatama, Dinda Ayu Maharani, Dzulfian Syafrian and Fauziah Rizki Yuniarti

Development in Practice, 2024, vol. 34, issue 8, 1048-1057

Abstract: The Indonesian Government has set ambitious climate targets and commitments, and now appropriate climate action is needed to achieve these targets. This viewpoint article identifies gaps in financing to achieve Indonesia’s climate commitments and suggests funding mobilisation strategies for climate action; it also recommends policy options to utilise available funding effectively and efficiently. It was estimated that realising climate commitments requires up to USD 276 billion in total, and the financing gap to realise this is around 53 per cent. To achieve the climate target, the government needs appropriate financing strategies. Securing funding from national and international sources, as well as from public and private sources, is critical to filling the gap and establishing financial source diversification. The limited state budget must be optimised through financial instruments such as green bonds, carbon pricing, and fiscal transfers. International financial sources must also be mobilised through bilateral, regional, and multilateral channels.

Date: 2024
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DOI: 10.1080/09614524.2023.2295790

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