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Who’s in charge of the money? Indonesia’s fractured climate change leadership

At Poznan a number of developing countries – China, Mexico and Brazil – took the opportunity to announce new climate change initiatives. Indonesia’s initiative, one of the world’s top 20 greenhouse gas emitters, was conspicuous by its absence and, given recent disagreements over budgetary control, we shouldn’t expect anything soon.

The body expected to take control is the National Board on Climate Change (DNPI). Formed in July 2008, its key aim was to implement the National Action Plan announced in 2007, coordinating the actions of 17 government ministries in:
• Formulating new climate change mitigation policies;
• Regulating the country’s carbon trade system;
• Overseeing development projects so to measure and control emissions;
• Taking the lead internationally in demanding developed countries take more responsibility for climate change.

This unified approach didn’t last long, however, with problems emerging in October 2008. The National Development Planning Board (Bappenas) announced that, along with the Finance Ministry, it was setting up a climate change trust fund to manage mitigation financial support from donor countries. However it was not until this week that the DNPI hit back reiterating that all funding for climate change would fall under the council’s control with Rachmat Witoelar, the Council’s director, declaring “as a national council we will manage all activities related to climate change in the country. All incoming money from donors will go through the council, including spending the donor money”.

The importance of the disagreement becomes apparent when numbers are mentioned. So far the US, Germany and Australia have pledged some $6o million in grants to combat climate change. The real prizes are the soft loans from countries like Japan who is providing up to $300 million for climate change mitigation as part of its “Cool Earth Promotion Programme“. Furthermore there could be much more on the way from the Reduction in Emissions from Deforestation and Degradation (REDD) scheme.

A cynic may suggest that having presidential and legislative elections in July may have something to do with this. But even then surely, one may ask, the money will still be used for climate change policies. Well this seems more a hope than a certainty as the trust fund will not have the same focus on climate change as the DNPI. This was made abundantly clear when the Bappenas director of forestry and water resource conservation, Basah Hernowo, stated “the trust fund will decide where the loans go. It can also be used to plug the deficit in the state budget”. Given the economic crisis and global recession, it is a valid, yet worrying question to ask how much of the donor’s money will actually be spent on climate change.

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