dicky edwin hindarto - lessons from indonesia carbon market

8/6/2019 Dicky Edwin Hindarto - Lessons From Indonesia Carbon Market

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National Council on Climate Change of Indonesia

Lesson Learn from Indonesia Carbon Market

Dicky Edwin Hindarto

Coordinator of Carbon Trading Mechanism DivisionNational Council on Climate Change of Indonesia

Asia Clean Energy Forum, 23 June, 2011


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1. Domestic mitigation objectivesand role of market instrument(s)

2. Indonesia carbon market status

3. How to adapt the next carbon

market?

Structure of Presentation


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Indonesia is the first developing country that announces its voluntaryGHG emissions reduction target up to 26 percent by 2020.

Further, with international support, Indonesia is confident that it can

reduce emissions up to 41 percent.

To this end, Indonesia has finalized National Action Plan on GHG

Emission Reduction 2010-2020. The plan is aligned with the Medium and Long-term Development Plan;

it provides directives to priority development sectors on key and

supporting actions necessary to achieve the emission reduction

objectives while maintaining economic growth and improving

competitiveness. The action plan would be equipped with a measurable, reportable and

verifiable (MRV) system as a part of the national carbon accountancy

system.

Indonesia policies on GHG mitigation


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Indonesia emissions projected to

increase from 2.1 to 3.3 GtCO2e

between 2005 and 2030

Projected emission1, Million ton CO2e

Transportation

Electricity

LULUCF2

Peat

Agriculture

Oil and gasCementBuilding

2030

3,260

590

151105

7538

2020

2,534

650

14310345

2005

2,052

760

110129

96

Share of global emissions1 Only sector direct emission are included

2 LULUCF emission based on clean emission approximation, including absorbtion

5.1%5.0%

Indonesia GHG emission projections based


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We are devising an energy mix policy includingLULUCF (Land Use, Land Use Change, and Forestry)that will reduce our emissions by 26 percent by 2020from BAU (Business As Usual). With international

support, we are confident that we can reduceemissions by as much as 41 percent- President Yudhoyonos commitment

at the Pittsburgh G-20 Leaders Summit

-160

-140

-120

20

80

60

2

-80

-60

40

-40

-260

-240

-20

-220

Reduction cost

2

USD per tCO2e

-100

0

Reduction potential2

MtCO2e per year

800600

-200

400 2,2002,000200 1,8001,6001,4001,2001,0000

-180

Geothermal

Fireprevention

High efficiency appliances

Internal combustion engineimprovements in passenger cars

Switching to LEDs

REDDsmallholderagriculture

Largehydro

REDDtimberextraction

REDDtimberplantation

SustainableForestManagement

Peat landrehab.

Net Costs

Net Savings

1 Societal perspective implies utilizing a 4% discount rate2 The width of each bar represents the volume of potential reduction. The height

of each bar represents the cost to capture each reduction initiativeSource: Indonesia GHG Abatement Cost Curve

Societal perspective1, 2030

Options for Indonesia mitigation actions up to 2030


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Market

Compliance market(CDM)

Voluntary market

(VCM)

Future carbon

markets

Non-market

National budget

Private investment

Foreign public funding

Policies (e.g fiscal, banking incentives

and disincentives)

Philanthropic contribution (companies,

NGOs)

Market and non-market approaches to climate change mitigation

Market and non market approaches to climate change mitigation


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Per 1 May 1st

, 2011, there are 145 projects on CDM-EB pipeline Methane avoidance and biomass are the leading sectors

64 projects are registered

Indonesia CDM projects status per sectorIndonesia CDM projects status

CDM market in Indonesia


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Indonesia issued CER projects


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-/

More than 20 Indonesian projects in VCM pipeline and all uses Voluntary

Carbon Standard (VCS) methodologies.

Total VER that already issued are more than 1,000,000 tVER.

Indonesia voluntary carbon market


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LULUCF

Power

Industry

Transport Waste

Institutional

Technical

Managerial Legal

Bilateral

Regional

Global

compliance post

2012

Global voluntary

Domestic

Supply

DEEP CUT??

DemandReadiness

?

Indonesia and the Future Carbon Markets

Indonesia is currently focusing on the supply side to meet the demand from theinternational markets

There are now 38 of submissions on new carbon market under LCA at UNFCCC

Mechanisms for domestic market are being explored with focus on forestry, small

renewable energy, and industry

The clarity and certainty on the demand side will boost readiness on the supply side


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Initiatives to develop new market mechanisms at domestic level

Forestry:

World Bank Forest Carbon Partnership Facility; Indonesia-Australia Forest Carbon Partnership

Pilot projects by non-government and

government entities to develop forest related

carbon market.

Industry: Standardization of energy usage/consumption

based on industry clusters

Socio-economic analysis, including carbon

market opportunities, on emission reductions in

industry sector.

Energy: Standardization of carbon footprint assessment

for pre-combustion, combustion, and post-

combustion

Transport:

Socio-economic analysis,including carbon market

opportunities, on emission

reductions in industry sector.

Waste: Assessment of mitigation in

municipal solid waste, incl.

technical and cost analyses.

Finance: Green Paper on fiscal policies

to support mitigation


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Planned links with the development of future carbon markets

International Carbon Markets

Link via offset

mechanism

(e.g. ETS)

Link via other domestic

market mechanisms

(e.g. KVER, JVER)

International

crediting

mechanisms

DOMESTIC MARKET MECHANISMS

that based on voluntary market system

(e.g. Emissions trading scheme or sectoral trading)

Indonesia will prepare standard, policies, and marketinstrument.

CARBON CREDIT SUPPLIER

Indonesia will produce carbon credit for mandatory

and voluntary based market system for international

market.

REGIONAL AND BILATERAL

MARKET

based on regional and bilateralagreements and domestic

emission reduction policies

(e.g. NAMA or sectoral

crediting)


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Terima kasihSalamat po

Thank you

dicky edwin hindarto - lessons from indonesia carbon market

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