Reducing Emissions from Deforestation and Forest Degradation Plus (REDD+)

Panelist: Fitrian Ardiansyah, ANU (10 minutes)


From ANU CAPPE (Australian National University – Centre for Applied Philosophy and Public Ethics) Workshop on “Designing just institutions for global climate governance”

(Canberra, ANU, 30 June -1 July 2011)


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Good afternoon Colleagues,


First of all, I’d like to thank the organiser, particularly Jonathan, for setting up this important panel discussion and allowing me to discuss before you about one of the heated topics in the realm of climate change negotiation as well as the nexus of climate change and development, which is REDD+ (Reducing Emissions from Deforestation and Forest Degradation Plus).


Before I move on, I’d like to present this slide, containing a picture which I believe often reflects on the view of some if not the majority of people living in tropical developing forest nations when they try to grasp the idea about REDD+. As we may have known, the governments of some tropical forest countries have been struggling to address deforestation for decades. If we take into account emissions resulting from LULUCF (Land Use, Land Use Change and Forestry), Indonesia and Brazil and some other countries can be considered as major emitters.


On the other hand, addressing deforestation means changing, altering, adjusting their development paradigms and pathways, and this definitely is not easy for these governments. As you also may have known, deforestation and forest degradation have been mostly caused or driven by the development of at least four influential sectors, namely forestry, plantations/agriculture, mining and infrastructure. These sectors have significantly contributed to economic development of these countries as well as the global market. Timber, paper, soya bean, palm oil, sugar cane are to name few commodities which have provided an increase in the level of wealth in these countries. Hence, without a provision of economic alternatives or other positive incentives, it would be a herculean task for governments of developing countries to change their development patterns by stopping or reducing deforestation, which eventually reducing emissions.


When, at COP-11 in Canada, a proposal was tabled for the provision of incentives and other forms of support to avoid deforestation to be part of the climate agreement by Costa Rica and Papua New Guinea, and this proposal, after reframed, debated, negotiated and refined, was incorporated in the Bali Action Plan at COP-13 in Indonesia, and recognised as one important building blocks at the last COP in Mexico, many tropical forest nations see this as a hope to both tackling deforestation and promote economic development of the countries.


However, in my view, there are at least 3 (three) crucial aspects if REDD+ wants to be effectively workable addressing both emissions reduction and economic developing in developing countries. These are governance, financing, and implementation capacity.


Let’s look at the first important aspect, which is governance. Governance performance is important, since it helps stakeholders and actors determine whether their efforts would reach the desired objectives and goals. REDD+ from its early days has gone through and under a ‘multi-level governance’ process. At the multi lateral arena, it has, among others, the UNFCCC REDD+ related negotiation, the UN REDD Programme (UN-REDD) and the Forest Carbon Partnership Facility (FCPF). Although, REDD+ has been incorporated as part of the Cancun Package, and widely recognised that without REDD+ the 2 degree Celsius climate stabilisation goal will not be reached, the faith of this initiative still depends on the entire negotiation to reach an agreement in a bigger context of UNFCCC. A tricky part of the REDD+ in the negotiation is that it does not only include deforestation and forest degradation, but also conservation, sustainable management of forests and the enhancement of carbon stock. The inclusion of these is believed to have been done to incorporate the interests of India, China and other similar countries. Widening the scope means widening the participation of countries, although this may not necessarily widen the actions to reduce emissions and this may complicate the methodologies for carbon accounting which could also mean undermining the credibility for emissions reduction.


Other levels of governance that is crucial for REDD+ are the national and local levels. At these levels, issues that can be highlighted include what sort of benefit-sharing or revenue-sharing mechanisms which are going to be developed and selected and whether these mechanisms reach those actors who are really protecting and managing forests, including indigenous people; what sort of policies put in place to address deforestation as well as drivers of deforestation. Also, the high likely debates are over baseline development, transparency, corruption, the involvement of wider actors, stakeholders, forest dependent people, indigenous people, etc. As you may have known, many developing countries have issues surrounding unclear laws and policies, overlapping of policies among sectors and layers of governments resulting in deforestation and land use change.


The second important aspect that I would like to discuss is about the financing side, again. There is a huge question about what consider sufficient and adequate when it comes to addressing deforestation, and, whether this money is compatible with money or investment coming in from other sectors which could lead to further deforestation. Just to provide you with a good example. The bilateral agreement of Indonesia and Norway as well as Norway and Brazil each provides the possibility of funds for REDD+ US$1 billion. Is this sufficient when at the same time, for instance, there is US$8 billion available from the Chinese Development Bank for the development of oil palm plantations in Indonesia. And, unlike REDD fund, where the money will come later one, the money for oil palm development is already available.


Hence, there is a serious issue of opportunity costs. Countries embracing REDD+ surely need to address the interests of sectors, actors, regions, etc., who have been left out or maybe negatively impacted by the decision of the countries to have REDD+ policies. For example, economic alternative or different types of financial support may be needed so that these parties would support REDD+. Non-state actors, namely the private sector and/or financial institutions play a crucial role, first, to add to the public fund. However, their involvement would depend on whether there is certainty about a scheme that will guarantee the future of REDD credits.


Otherwise, demand for REDD financing, and if this only depends on public funds, risk placing pressures on donor government aid budgets as well as budgets of developing countries, resulting in the potential redistribution of funds from existing development programs that may jeopardise progress made of countries’ development. Although, the continued investment in conception phase or early actions is critical to ensure that REDD+ initiative is well designed and administered.


At multi-lateral arena, the challenge of financing is also clear especially when it comes to the choice of the scheme for REDD+. There are at least 3 (three) schemes proposed, which are fund-based mechanism, market-linked scheme, and the hybrid model. Under a market based scheme, countries that reduce REDD emission below a set of a pre set baseline would receive credits that could be sold in the market and used by purchasing nations to meet their international mitigation obligations. Fund based scheme involves the establishment of international funds to finance REDD activities or to provide incentives for countries to address REDD issues. There are pros and cons about consequences of either scheme. Among others, these include the leakage issues, additionality, permanence, fungibility, sovereignty, property rights, representativeness, etc.


My last important aspect is the capacity to implement REDD+. The capacity that I mention here includes capacity to develop baseline or reference level, to monitor, report and verify the reduction of emissions, develop and manage an institution, to develop just and fair distribution mechanism, to engage with wider actors who directly on the ground dealing with deforestation as well as at other arena. Also, which is rather more important, is the capacity to enforce or willingness to enforce any given policies or schemes that involved REDD since enforcement or lack of it may be viewed as one of the major obstacles in addressing land use change and deforestation in developing countries.


In brief, I would say that REDD+ provides good opportunity for developing countries to reduce emissions, contributing to mitigating climate change. However, there are crucial aspects which need to be strengthened or reformed before REDD+ becomes operationalised and reaching its goals. I thank you.


The Economic Challenge of Climate Change

Asia Views, In Focus Column, Fitrian Ardiansyah, Edition: 40/VI/January2010

People, economies and the natural environment are now being affected by human-induced climate change. Climate change can lead to damages to natural, communal and business assets.

Some studies typically place damages in the range of 1-1.5 percent of Gross Domestic Products (GDP) per year for developed countries, and 2-9 percent for developing countries if the average temperature increases between 1.5 and 4.0oC.

This is also true for Indonesia. The observed and projected impact of climate change in the country include the increase in the severity of droughts, flooding, fires, coral bleaching, the gradual increase in sea level rise, and the increase in frequency of extreme weathers including storms which will be destroying natural and human-made systems in the area.

For instance, a WWF report released in May 2009 set out the full extent of the threats to the coral reefs of Indonesia, which are part of the Coral Triangle region of the Pacific Ocean.

The report further shows that climate change challenges are increasing, and how unchecked climate change will ultimately undermine and destroy ecosystems and livelihoods of hundreds of million people in the Coral Triangle.

Another study conducted by the World Resources Institute has estimated that due to climate change, Indonesia’s agricultural productivity may decline by 15 percent by 2080 at the time when our population is expected to grow to around 300 million.

Avoiding the Worst

There is a growing need for investing urgently in climate change action in order to avoid escalating costs in the future. Public funding needs to be the core source of funding to meet the incremental costs of adaptation.

UN Framework Convention on Climate Change (UNFCCC) calculates the need for US$ 49-171 billion a year – to adapt to climate change alone until 2030 – in which US$28-67 billion is required to help efforts in developing countries.

The existing provision of funds to cope with these impacts, however, is not at the level that is sufficient to meet these requirements.

Special Climate Change Fund (SCCF) and the Least Developed Countries Fund (LDCF) only allocate US$114 million and the Adaptation Fund established last year can only accumulate and provide around US$200 million.

Therefore, Indonesia together with other countries need to forge a deal in Copenhagen which will guarantee additional fresh and predictable financial support coming from developed countries, not only from 2010 to 2012, but also through 2020 and beyond.

Domestically, Indonesia needs to also seriously prepare its sectoral, regional and domestic plans to adapt to climate change. Vulnerable sectors – e.g. agriculture, marine and coastal, forestry and infrastructure – and other areas need to be assessed, prioritized and strengthened with sufficient budgets.

On the other hand, economic development in Indonesia typically implies a larger dependence on climate-sensitive sectors, in particular the energy generated from coal, oil and other fossil fuels, and greater land use leading to deforestation.

Energy plays an important role in boosting the country’s economy and improving its social welfare. Historical data from the Ministry of Energy and Mineral Resources show that domestic demand for energy has been increasing faster than the average growth of population.

With the current rate of the use of fossil fuels, the obvious consequence is high GHG emission, especially CO2. During the period of 1990-1997, the CO2 emission increased at a rate of 7 percent per year, while afterwards it increased to 6 percent per year.

Indonesia’s economies are also a key location for – and driver of – large-scale deforestation.

Pressured by the demand to provide land for agriculture, settlements, infrastructure and mining operations, the country has lost around 2.8 million hectares (1995-2000) and currently 0.8 million hectares (2006-2008) forest cover, according to the Forestry Ministry.

An official document from IFCA (Indonesia Forest Climate Alliance) indicates that Indonesia requires US$ 4 billion in five years to ensure enabling conditions prior to concretely addressing deforestation and forest degradation.

With the economic growth around 6 percent per year, the projected GHG emission of Indonesia – based on business as usual (BAU) development pattern – is definitely going larger than today.

Nevertheless, decoupling economic development from GHG emission is not impossible.

Adequate, sufficient and sustainable financing is required to significantly reduce GHG emissions.

A global financial architecture for climate change is needed to be agreed in Copenhagen to shift public and private finance and investment flows towards decoupling economic growth from increasing emissions to a low carbon economy.

Domestically, Indonesia needs to put its developmental policies and governmental interventions in the direction of a low carbon economy and promote incentives for sustainable development.

President Susilo Bambang Yudhoyono’s pledged intention to cut GHG emissions by 26 percent by 2020 from “business as usual” (BAU) levels is a good start for this country to embrace a low carbon economy.

This of course needs to be backed up by concrete actions and a clear budgeting system, which in the end support these actions and determine the pathway Indonesia’s development.

If this is chosen, Indonesia’s future can be secured against the threat climate change poses to its people and to its economic development.

Fitrian Ardiansyah is Program director of climate & energy at WWF-Indonesia, and adjunct lecturer at Paramadina Graduate School of Diplomacy

Asiaviews, Vol.III No.8 December 2009 – January 2010, This article is published in AsiaViews a monthly magazine covering Southeast Asia Region. The magazine is a joint collaboration between Tempo, Bangkok Post, Today, News Break and Malaysian Business.

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What is at stake for Indonesia

ROAD to COPENHAGEN, Fitrian Ardiansyah ,  Jakarta   |  Tue, 12/01/2009 10:42 AM  |  Environment

Copenhagen, which will host the UN Climate conference in less than a week from now, may be far away from Indonesia. But any results coming out of this intense negotiation forum will have a significant impact on the fate of the country and the earth in general.

The Bali Action Plan (BAP), the main outcome of the 13th session of the Conference of Parties (COP-13) to the UN Framework Convention on Climate Change (UNFCCC) held in Bali in 2007, marked the beginning of two years of formal negotiations to reach an ambitious global climate agreement.

This plan mandates parties to negotiate and reach a substantial agreement on how to — over the long term — reduce greenhouse gas (GHG) emissions, mitigate and adapt to climate change, transfer and develop the appropriate technology as well as provide the financial resources and investment to do so.

As the host country of COP-13, it is in Indonesia’s best interest the Copenhagen conference reaches the BAP’s objectives – by having a new treaty regulating bigger GHG emissions cuts, which follows on from the Kyoto Protocol.

The current Kyoto protocol, which will expire in 2012, requires developed nations to cut GHG emissions by about 5 percent from 1990 levels to help slow global warming.

Credible science proves this level of cuts is insufficient, and that there is a need for all countries to urgently take further action.

According to the Intergovernmental Panel on Climate Change (IPCC), the average global temperature must not rise by more than 2 degrees Celsius if we want to ensure  that most vulnerable nations, communities and ecosystems survive.

Emission reductions from developed countries therefore have to be at the high end of the IPCC’s lowest mitigation scenario strategy – between 25 to 40 percent.

However, current proposed GHG emission targets will lead to a higher than 3.5 degree Celsius increase in average global temperature by 2100, according to Climate Action Tracker’s Project Catalyst.

Although China and the US – two of the world’s biggest GHG emitters – have brightened the prospects of reaching an agreement with their current promises to curb GHG emissions, the emissions reduction targets tabled by industrialized countries currently add up to only reductions of 10 to 14 percent below 1990 levels by 2020.

Therefore, Indonesian negotiators, led by President Susilo Bambang Yudhoyono, need to lobby industrialized countries to push them into committing to higher emission reduction targets.

Developed countries, including the US, are required to join a strong new international agreement in Copenhagen by adopting economy-wide quantified emission reduction commitments.

The commitments of industrialized countries need to be articulated without loopholes. The main loopholes to watch out for are: offsets, reduced/abandoned Assigned Amount Unit (AAU) surplus from the previous commitment period, and unclear accounting rules for land use, land use change and forestry (LULUCF).

Beside commitments from developed countries, developing countries also need to take significant measures to contribute to climate change mitigation.

A large number of developing countries, including Indonesia, have announced they would put in place significant measures unilaterally as well as actions that require the support of industrialized countries.

These measures should be spelled out clearly and in detail under the Nationally Appropriate Mitigation Actions (NAMAs) at the Copenhagen conference.

With NAMAs, developing countries can aim to reach the emission reductions required and at the
same time grow their economies enough to eradicate poverty and ensure the right to sustainable

These actions need to be brought into the Copenhagen climate deal at a level that can lead to a deviation from business-as-usual scenarios of at least 30 percent by 2020.

Reducing emissions from deforestation and forest degradation (REDD) is a particularly important component of reducing overall GHG emissions.

With deforestation, forest degradation and other land use changes accounting for approximately 15 to 20 percent of GHG emissions, it is clear that any solution tackling climate change must include a solution to these issues.

The current rate of deforestation and forest degradation, not only affecting the world’s rich terrestrial biodiversity but also the livelihoods of more than one billion of the world’s poorest people, has clearly undermined the development of nations with tropical forests.

Therefore, it is crucial Indonesia and these nations secure a global umbrella framework for REDD as part of the post-2012 global climate agreement.

The success of the Copenhagen conference will not only mark Indonesia’s triumph in guiding the BAP but also ensure the survival of this archipelagic country, its hundreds of millions of people and precious ecosystems.

The observed and projected impacts of climate change in this country include an increase in the
severity of droughts, floods, fires, coral bleaching, the gradual rise of sea levels, and an increase in the frequency of extreme weather conditions including storms, which destroy natural and human-made systems in the area.

Therefore, it is important to set in place a framework for immediate action as part of the Copenhagen deal, especially for other vulnerable countries – including Indonesia – and ecosystems, which includes the provision of financial help to face loss and damage caused by climate change impacts.

Developing countries implementing measures to mitigate and adapt to climate change cannot be expected to do so without financial support from industrialized countries.

Indonesia needs to convince industrialized countries they have to provide fast-start financial packages between 2010 and 2012. They must then be coaxed into agreeing on multiple and innovative sources and scale of long-term funding.

This overall support must be additional to aid budgets and managed in a transparent way to help developing countries.

For the last two years, 192 governments have worked on the new agreement, incorporating a shared vision and building blocks for mitigation, adaptation, technology and finance. All the necessary proposals have been drafted and are on the table. The raw material for a new agreement exists.

To ensure the BAP is implemented and a deal is struck in Copenhagen, Indonesia has to be pro-active in lobbying the world’s negotiators and leaders to agree to the relevant parts of the future climate treaty, formulated in treaty language, based on a decision on the exact form of
an enforceable, legally binding framework.

Indonesia can use its unique position to bring the developed and developing worlds together and bridge the gap between these two blocks to reach a global climate agreement.

Positive outcomes at the COP-15 will not only help the world tackle climate change but also eventually safeguard the development and survival of Indonesia’s population and its valuable ecosystems.

The writer is program director of climate & energy at WWF-Indonesia, and adjunct lecturer at Paramadina Graduate School of Diplomacy. He can be reached at

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Dealing with climate change dangerous impacts

ROAD to COPENHAGEN, The Jakarta Post, Fitrian Ardiansyah and Ari Muhammad ,  Jakarta   |  Tue, 10/13/2009 12:11 PM  |  Environment

Climate change is a grave threat to the economies, societies and natural environment of all countries in the Asia-Pacific region, including Indonesia.

Unless action is taken today to begin to stabilize and then reduce global greenhouse gas (GHG) emissions – action including achieving an ambitious global climate agreement at Copenhagen – the impacts of climate change will become increasingly severe and irreversible.

Climate change can lead to damage to natural, communal and business assets. Some studies typically place damage in the range 1-1.5 percent of gross domestic product (GDP) per year for developed countries, and 2-9 percent for developing countries, if the average temperature increases between 1.5 and 4.0 degrees Celsius.

In his 2006 review, Nicholas Stern extended this estimation by stating that unabated climate change could cost the world at least 5 percent of GDP each year; if more dramatic predictions come to pass, the cost could be more than 20 percent of GDP.

Overall in Indonesia, the observed and projected impacts of climate change include an increase in the severity of droughts, flooding, fires, coral bleaching, the gradual rise of sea levels, and the increase in frequency of extreme weather conditions including storms, which will be destroying natural and human-made systems in the area.

Increased rainfall during the wet seasons may lead to high floods, such as the Jakarta flood in February 2007 that inundated 70,000 houses, displaced 420,440 people and killed 69 with losses of US$450 million, according to the World Health Organization.

Hundreds of millions of people live in Indonesia, most of who depend on resources, goods and services for their livelihood. However, climate change will profoundly affect biodiversity, water resources and the economy in the country, all of which in turn will impact its people.

One study reveals that millions of people are at risk from flooding and sea-water intrusion caused by rising sea levels and declining dry-season precipitation; these phenomena will negatively impact the aquaculture industry (e.g., fish and prawn industries) and infrastructure along the coasts of South and Southeast Asia.

The impacts of climate change will increase the pressure on forest, coastal and marine ecosystems caused by illegal and destructive logging, overfishing and overexploitation of natural resources.

Hence, the challenge that the government faces is finding ways to devise climate-smart development strategies that ensure the mainstreaming of climate change adaptation in the country’s development agenda.

Adapting to climate change means adjusting natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities.

This demands not only the improvement of national policies – which includes devising climate-smart strategies and mainstreaming these in the development agenda – but also the increase in workforce capacity from national to local levels. To begin with, this requires significant amounts of adequate, sufficient and sustainable financing.

To protect natural and business assets from climate change impacts, the World Bank estimates that $9-41 billion a year will be needed globally. The UN Framework Convention on Climate Change (UNFCCC) calculates the need for $49-171 billion a year – to adapt to climate change alone until 2030 – in which $28-67 billion is required to help efforts in developing countries.

Unfortunately, the current provision of funds to cope with these impacts is yet to be at a level sufficient to meet these requirements. The Special Climate Change Fund (SCCF) and the Least Developed Countries Fund (LDCF) have allocated only $114 million, and the Adaptation Fund, established last year, can accumulate and provide only around $200 million. Some even predict that in reality only $500 million can be gathered for climate change adaptation.

With this dismal figure, Indonesia also needs to seriously prepare its regional and domestic plans to adapt to climate change. Vulnerable sectors – agriculture, marine and coastal, forestry and infrastructure – and areas need to be assessed and prioritized.

Cooperation among countries at the regional level is essential and coordination among sectors and different levels of government is pivotal for successful adaptation initiatives.

At the regional level, for instance, the creation of the Coral Triangle Initiative (CTI) by six countries in the Asia Pacific is a good starting point for addressing climate adaptation in marine and coastal areas.

This initiative and its Regional Action Plan can complement individual countries’ actions to reduce the social, economic and biological impacts of climate change by developing adaptation policies and providing funding, especially for establishing and managing networks of marine protected areas and promotion of sustainable coastal livelihood.

Effective management of coastal resources through a range of options including locally managed regional networks of marine protected areas, protection of mangrove and seagrass beds and effective management of fisheries would contribute to a slower decline in coastal and marine resources as well as an increase in the resilience of coastal communities and the marine sector overall.

At the local level, encouraging news is coming out of Lombok. The provincial government of Nusa Tenggara Barat has carried out initial vulnerability assessment, predicting climate impacts and identifying areas and sectors most vulnerable to climate change.

It is a pioneering work because many climate predictions and assessments have been carried out at a global or regional level. The most important thing is that the results of this assessment were endorsed by the governor, and key elements of the findings are planned to be inserted in the mid-term development planning document of the province.

Reducing and coping with climate change impacts may be an endless struggle. However, some actions taken at the local, national and regional levels can further keep our hope alive to win this battle.

Fitrian is program director of climate & energy at WWF-Indonesia and adjunct lecturer at Paramadina Graduate School of Diplomacy. He can be reached at Ari is adaptation policy coordinator at WWF-Indonesia. He can be reached at

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Finding the money to pay for climate solutions

ROAD to COPENHAGEN, The Jakarta Post, Fitrian Ardiansyah | Tue, 29 September 2009 | Environment

This week, another round of UNFCCC (UN Framework Convention on Climate Change) talks commences in Bangkok, where various parties will lay the groundwork for faster progress on the very last sessions: Barcelona in November, Copenhagen in December.

Prior to the Bangkok Climate Change Talks, a series of high-level political meetings including the UN Climate Summit in New York and the G20 Summit in Pittsburgh discussed climate change, with specific focuses on the needs for having targets and actions to reduce greenhouse gas (GHG) emissions and on climate finance.

Adequate, sufficient and sustainable financing is required to address the disastrous impacts of climate change and to significantly reduce GHG emissions. A global financial architecture for climate change is also needed to shift public and private finance and investment flows toward decoupling economic growth from increasing emissions to a low-carbon and climate-resilient future (including both adaptation and compensation), particularly in developing countries.

In July 2009 at the Major Economies Forum, in addition to agreeing on the climate science and the need for urgent action this year, heads of state agreed that finance ministers should “work through the G20 to recommend in advance of the Copenhagen conference the best ways to mobilize necessary financing”.

The UNFCCC secretariat’s Investment and Financial Flows report from 2007 estimates that US$133 billion a year in additional investment in developing countries will be needed in 2030 to increase climate resilience and contribute to their low carbon economic development.

The latest survey carried out by the UN Department of Economic and Social Affairs, this year, recommends the need for additional investments amounting more than $500 billion per year, 1 percent of GDP, to help developing countries pay for climate change mitigation and adaptation.

To answer this challenge, all countries, except the least developed, should contribute to financing the fight against climate change on the basis of common but differentiated responsibilities and their respective capacities.

Nevertheless, although emissions, including from deforestation, are rising in some developing countries, industrialized countries have a higher historical responsibility for accumulated emissions and higher economic capacity to deal with this challenge. Therefore, any actions taken by developing countries are based upon actions by developed countries to reduce their own emissions and provision of resources.

The G20 leaders in Pittsburgh, unfortunately, failed to make any specific decisions on financing for climate change. Heads of the world’s 20 largest economies acknowledged the urgent need for a deal in Copenhagen that sets us on a path to a clean energy economy and addresses the devastating impacts of climate change, but very few concrete measures were taken by the group.

They only called on their finance ministers to continue their work and report back at their November meeting in Scotland with a range of options for climate change financing to be considered at the UNFCCC negotiations in Copenhagen.

Within this very limited time, the Bangkok Climate Change Talks should seriously begin exploring adequate, predictable, new and additional options needed to have “make or break” decisions on climate finance in Copenhagen.

These options should start from specifically identifying the means by which the industrialized countries can further mobilize public resources, over and above Overseas Development Assistance (ODA), and channeled through an institution identified by the UNFCCC Conference of the Parties (COP).

Public finance is critical for mobilizing and shifting the estimated $1.5 trillion in annual private sector investment needed to spur the clean energy economy, according to the International Energy Agency (IEA). If the private sector is encouraged and subsequently acts, there are likely to be significant new and additional investments in renewable energy, energy efficiency, tackling deforestation and new climate-friendly technologies.

In addition to this, public finance is important for supporting actions and measures on adaptation in developing countries, and preventing the much higher costs of inaction on climate change.

At the G20 Summit, leaders made a commitment to gradually phase out fossil fuel subsidies. This commitment would strengthen public finance for climate change and has the potential to generate hundreds of billions of dollars for clean energy development and access to clean energy for the poor.

Another conceivable option to drive the necessary global transformation in combating climate change would be the involvement of global carbon markets.

The precondition for this is to have ambitious targets by industrialized countries that are sufficiently stringent to deliver the overall global emission reductions. With this, there will be sufficient demand for credits in carbon markets and the markets can play a role to deliver abatement wherever it appears more cost effective.

Other options that need to be explored include auctioning of Assigned Amount Units (AAU) – finance would be raised by holding back and auctioning a small portion of developed country emissions allowances; revenues collected from trading schemes and fuel levies in international aviation and shipping sectors; and levies on credits from carbon market mechanism.

The Bangkok Climate Change Talks will provide a key opportunity for developing countries, including Indonesia, and industrialized nations to kick off real negotiations for climate financing. Now, negotiators need to take up the mandate from their leaders and make real progress.

The writer is program director of climate & energy at WWF-Indonesia. He can be reached at This weekly column features articles related to developments in the lead up to the UN Climate Change Conference in Copenhagen, Denmark.

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