Thursday, July 24, 2008
RI Needs $728m in Financial Aid to Fight Climate Change
Source: The Jakarta Post
Adianto P. Simamor

Indonesia needs at least US$728 million in assistance to address climate change, including dealing with extreme weather events linked to global warming and helping local farmers boost crop production, a report says.

The report, compiled by the National Development Planning Board (Bappenas) and released Tuesday, said the funds, expected mostly in the form of grants, would be used for mitigation and adaptation programs in sectors deemed most prone to the adverse affects of climate change.

"We will submit the proposal to international donors," Basah Hernowo, Bappenas' director of forestry conservation and natural resources, said Wednesday.

About $59 million of the total is expected to come from foreign loans.

"Certain mitigation projects would use funding from foreign loans. But we prefer soft loans, so foreign loans should be a last resort if grants are insufficient," he said.

The report said evidence of climate change varied across the archipelago, and was marked by warmer temperatures, changes in precipitation, sea level rises and extreme weather phenomena.

It said the mitigation measures, aimed at cutting greenhouse gas emissions, would focus on the energy and forestry sectors.

The adaptation programs, it added, would cover agriculture, coastal areas and small islands, marine life and fisheries.

The report also said the government would launch adaptation strategies in the agriculture sector, including promoting integrated sustainable crops and water management programs in the east of the country, which is vulnerable to long periods of drought.

The Agriculture Ministry has proposed $55 million to develop agricultural infrastructure to provide farmers with access to climate change mitigation funds in the country's main food growing provinces, including Banten, Gorontalo, West Sumatra and West Java, the report added.

The project is expected to raise rice production by 5 percent.

The climate change fund will also be spent on studies to forecast sea level trends and map areas most vulnerable to the effects of global warming.

For mitigation in energy sector, the government is planning to build coal liquefaction facilities and develop geothermal energy to steer the country toward cleaner energy sources.

The Energy and Mineral Resources Ministry has proposed $1.5 million for construction of a coal liquefaction plant in South Kalimantan, with a processing capacity of 13,500 barrels per day.

The ministry also proposed US$2.6 million to develop geothermal power plants in Bandung and eastern parts of the country.

Indonesia has the largest geothermal power potential in the world, currently estimated at 27,000 megawatts.

Given the fact Indonesia is now a net oil importer, the government said the country would import about 60 percent of its domestic fuel demand to boost economic growth. Indonesia has pledged to cut carbon emissions by 17 percent from the energy sector.