It is an unfortunate but fact of life that Indonesia often deals with the impacts of natural disasters. It was sadly evident again this week when I arrived in Jakarta to the unfolding disaster caused by the earthquake in Lombok, West Nusa Tenggara. My condolences go out to the families and friends of those who lost their lives.
While scientists are reluctant to say a specific natural disaster is caused by climate change, they say a changing climate is resulting in more extreme events around the world. That’s why at International Finance Corporation (IFC), the largest global organization working with the private sector in emerging markets, finding new avenues for climate financing is a key priority.
Green bonds offer a pathway. The world is witnessing a rapid growth in green bonds, dramatically increasing the flow of capital to green projects and bringing new financiers into the climate smart investment space.
Bapak Kris mengelola pabrik penghasil pelet yang terletak di dekat kota Boyolali, Jawa Tengah. Sejak pabrik dibentuk, ia telah berpikir untuk merambah pasar domestik — meskipun sampai saat ini pelet produksinya diutamakan untuk ekspor — dikarenakan mulai redanya antusiasme pasar global. Ketika Bapak Kris mendapat informasi bahwa Program Inisiatif Tungku Sehat Hemat Energi (TSHE) / Clean Stove Initiative (CSI) Indonesia telah meluncurkan program percontohan Pembiayaan Berbasis Hasil (PBH), ia pun ikut mendaftar dan berpartisipasi dalam program tersebut.
Ia menggabungkan wawasannya tentang pasar pelet lokal dengan insentif yang diberikan program percontohan untuk mengembangkan jaringan distribusi dan menguji TSHE berbasis pelet buatannya. Setiap tungku yang dijual dilengkapi 1 kilo pelet kayu yang perusahaannya berikan secara cuma-cuma. Dengan pengalamannya bergabung dalam program percontohan PBH, Pak Kris melihat adanya potensi pasar tungku masak yang bersih dan efisien. Ia berencana terus menjual TSHE dengan harapan suatu saat dapat mendirikan pabrik pelet miliknya sendiri.
Bapak Kris manages a pellet production factory, located just outside Boyolali City in Central Java. Since its founding, he has started considering the domestic market- despite the fact that the produced pellets have mainly been for export- as the global markets have begun to cool down. When Bapak Kris learned that the Indonesia Clean Stove Initiative (CSI) had launched its Results-Based Financing (RBF) pilot in the Province, he registered and participated in the pilot.
He combined his knowledge of the local pellet market with the pilot program incentives to expand his distribution network and test new pellet-based clean stoves. With each stove sold, the company provided the consumer 1 kg of wood pellets free of charge. With the experience of participating in the RBF pilot, Pak Kris sees the potential of the clean cooking market. He plans to continue selling clean stoves and hopes to set up his own pellet factory.
Lao PDR is rich with biodiversity. The country is home to emblematic animals such as Asian Elephants, Gaur, Green Peafowls, Asiatic Black Bears, and northern White-Cheeked Gibbons. Mountainous topography and low human density have allowed the country to preserve its endemic flora and fauna for centuries, to the extent that some species are still being identified like the Saola, one of the world’s rarest large mammals, only discovered in Laos in 1992.
But recent economic growth coupled with an exploding demand for wildlife and wildlife products have fueled increased pressure on Lao PDR’s native species. Forest encroachment, illegal logging and wildlife poaching have eroded biodiversity. Forest cover has declined dramatically since 1992, the number of wildlife species listed as endangered has increased, and some iconic species like tigers have not been sighted for years. At the same time, Lao PDR has become a gateway for international wildlife trafficking: illegal trafficking of ivory, pangolins and other CITES-listed items have transited through the country due to limited enforcement capacity.
Since our days in school, we have often been told to first define our terms before doing anything else. China is a country that does not shy away from acronyms, and “TOD,” or transit-oriented development—a concept that merges land use and transport planning—is one such acronym that has become wildly popular within the field of urban development.
So, recently, when government officials from seven Chinese cities and the Ministry of Housing and Urban-Rural Development gathered to launch the China Sustainable Cities Integrated Approach Pilot Project on the topic of TOD, it was clear that they all had the same definition of this three-letter acronym.
Or did they?
“Peatlands are sexy!” They aren’t words you would normally associate with peatlands, but judging from the large audience that participated in the lively discussion on financing peatland restoration in Indonesia at the “Global Landscapes Forum: Peatlands Matter” conference, held May 18 in Jakarta, it seems to be true. The observation was made by Erwin Widodo, one of the speakers in the World Bank-hosted panel discussion at the event.
For me, it was a great honor to moderate a panel comprised of several of the leading voices in the space: Kindy Syahrir (Deputy Director for Climate Finance and International Policy, Finance Ministry), Agus Purnomo (Managing Director for Sustainability and Strategic Stakeholder Engagement, Golden Agri-Resources), Erwin Widodo (Regional Coordinator, Tropical Forest Alliance 2020), Christoffer Gronstad (Climate Change Counsellor, Royal Norwegian Embassy), and Ernest Bethe (Principal Operations Officer, IFC).
It was the right mix of expertise to address the formidable challenges in securing resources to finance sustainable peatland restoration in Indonesia. These include finding solutions to plug the financing gap, and identifying instruments and the regulatory framework necessary to strengthen the business case for peatland restoration. A significant amount of finance has been pledged. But one of the key issues the panel needed to address was how to redirect available finance towards more efficient and effective outcomes to reach sustainable restoration targets.
Global experience shows that growing first and cleaning up later rarely works. Rather, it is in countries’ interest to prioritize green and clean growth. This also holds true for Thailand, a country with rich natural resources contributing significantly to its wealth.
According to World Bank data, annual natural resource depletion in Thailand accounted for 4.4 percent of Gross National Income in 2012, and it has been rising rapidly since 2002. The rate of depletion is comparable to other countries in the East Asia and Pacific region, but it is almost three times faster than the rate in the 1980s.
Rapid natural resource depletion in Thailand is increasingly visible in reduced forest areas. Illegal logging and smuggling have led to a decline from 171 million rai of forested area in 1961 to 107.6 million rai in 2009. Coastal communities face erosion, ocean waste, and illegal, destructive fishing. The coasts are also increasingly vulnerable to storm surges and sea level rise, due to continued destruction of mangroves and coral reefs.