Indonesia's Efforts to Handle Climate Change Align with ASEAN
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VIVA – The Indonesian Government continues to fulfill climate change action commitments. In this case, the Government carries out its commitments with market and non-market mechanisms.
"Indonesia has issued fiscal policies to support climate change actions such as providing tax incentives, tax holidays, and elimination of VAT and import duties for actions related to the renewable energy sector and retirement of the coal," Finance Minister Sri Mulyani Indrawati said at the Seminar on Financing Transition in ASEAN in Bali on Thursday, as quoted from the official statement.
Indonesia understands that every climate finance needs a framework that can be used as a reference for all parties. Therefore, the Indonesian Financial Services Authority has developed a green taxonomy document as the basis for green investment guidelines.
The green taxonomy can serve as a benchmark for other countries as part of concrete actions to reduce emissions. Indonesia's green taxonomy is also in line with The ASEAN Taxonomy for Sustainable Finance (ATSF) Version 2 which was launched in March 2023.
Menteri Keuangan Sri Mulyani Indrawati.
- Anisa Aulia/VIVA.
ATSF Version 2 can accommodate the need for a more thorough assessment of "how and where" the contribution of the coal phase out program is to be placed as a decarbonization effort in support of the Paris Agreement.
"Activities that produce emissions are a cross-border issue so that the implementation of the carbon market has its complexities, including related to jurisdiction, claims, and state parties entitled to receive revenue." Minister Mulyani explained.
The minister added that Indonesia welcomes international support in the form of technical support, loans, and grants in its development.
On the same occasion, Singapore's Deputy Prime Minister and Minister of Finance Lawrence Wong and Thailand's Minister of Finance Arkhom Termpittayapaisith also said the same thing.
"Given that there are various building blocks for taxonomies in the world, ideally ASEAN taxonomies can be connected, and converge with each other with international standards." Minister Wong stated.
