Abstract

Using a recursive-dynamic multiregional computable general equilibrium (CGE) modelling approach, we introduced a set of sector-specific labour productivity shocks representing the effect of Industry 4.0 on the Indonesian economy. The results suggest that Indonesia’s long-term economic growth will increase from 5.2% per year to 5.7% per year. In terms of output expansion, the top gainer would be the machinery and motor vehicles sector, and to a lesser extent, finance, whereas low gainers include extractive and agricultural sectors and food processing industries. Region-wise, Java, the already advanced region, will be the primary beneficiary of the growth, while other islands will not benefit as much. There is not much risk of unfavourable distributional effect. However, agriculture workers will lose out compared with workers in other sectors, particularly those with intermediate skill levels.

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Abstract

Integrating climate actions and the SDGs poses some major governance-related challenges, in the forms of horizontal integration across different governmental agencies and vertical interactions among different levels of administrative decision making, while at the same time ensuring effective participation of relevant stakeholders in the policymaking processes. There is increasing recognition that vertical interactions can help bridge the gaps between global, national and local policy processes. In this respect, local and subnational authorities such as provinces and cities play crucial roles due to their potential for dynamic responses to climate change and sustainable development issues. The current study explores these issues and questions for West Java, a region of a country that is moving rapidly on its climate and SDG agenda. The study made use of a stakeholder consultation, which was conducted through an online questionnaire survey involving over 100 stakeholders, followed by an online focused group discussion (FGD) involving over 20 of the survey respondents. The stakeholder consultation aimed at eliciting the key challenges, synergies and trade-offs between climate actions and the SDGs, and involved IGES partnering with the Center for Sustainable Development Goals Studies (SDGs Center) at the University of Padjadjaran (UNPAD). This paper introduces the stakeholder consultation activity conducted in West Java, summarises the results and discusses the stakeholder perceptions on the interlinkages of climate actions and SDGs in the local context. The results from this paper can be used in analyses of the synergies and trade-offs between climate actions and the SDGs for West Java.

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Abstract

The overall purpose of this study is to assess priorities for new environmental accounts in Indonesia. We use environmental costs related to air pollution and resource extraction in Indonesia as a measure for priority. This study uses the damage costs approach to estimate the environmental degradation costs value and the Net Present Value (NPV) approach to obtain the environmental cost of natural resources depletion of several natural resources that are most important for the Indonesian economy. Our estimate of the total environmental costs amounts to around 13% of GDP in 2010. Environmental costs are mostly due to depletion of energy and mineral resources, followed by environmental degradation cost from air pollution, and the use of forestry resources and related depletion of ecosystems. The Indonesian Central Bureau of Statistics (BPS) has already published damage costs data related to resource depletion, which we find is a priority. However, the BPS should consider completing its data with additional information on the depletion costs of ecosystem services related to forestry. Moreover, the BPS could expand Indonesia’s economic-environmental accounts by including environmental degradation costs due to air pollution. We found that from a substance perspective, the priorities are SOx, NOx, CO₂, CH₄, and particulate matter. At the same time, from a sector perspective, the priorities are electricity, manufacture of basic iron and steel and of ferro-alloys and first products thereof, mining of coal and lignite, and extraction of peat, because if the national accounts included the external costs of air pollution and the depletion of natural resources, these sectors would create a negative value-added.

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Abstract:

Despite the pandemic’s negative effect on the economy, it can help reduce emissions from energy consumption activities in line with the Paris Agreement, especially for high-emitter countries such as Indonesia. However, the policy response to COVID-19 may rebound the emissions to their pre-pandemic levels. To design an efficient policy that considers both economic and environmental variables, this study uses a computable general equilibrium model that assesses how COVID-19 and its stimulus policy will affect the macroeconomic indicator, energy consumption, and emissions at the national and regional levels. The results show that macroeconomic indicators generally performed worse with the current stimulus policy in the short run than in the long run. Refined petroleum energy consumption took the highest hit, followed by coal-based energy consumption and overall electricity demand. The pattern in emissions reduction is similar to the pattern of gross domestic product declination as well. The Sulawesi region particularly experienced the largest decrease in refined petroleum energy consumption. In contrast, the Java-Bali and Sumatra regions experienced the most coal-based energy consumption reduction and the largest emissions reduction. Should COVID-19 provide the impetus to develop more environmentally sound economic development, we would need better policy to address the recovery. Returning to pre-pandemic development will not lead to long-term environmental gain. This study offers policy recommendations for economic recovery and environmental improvement. The government should promote low-carbon technology, clean energy transition, more energy efficiency, and sustainable development to avoid the rebound effect of energy consumption and carbon emission. Coordination between central and local governments is also needed to formulate a fiscal policy inclined toward low-carbon pathways.

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The ocean, which regulates climate and supports vital ecosystem services, is crucial to our Earth system and livelihoods. Yet, it is threatened by anthropogenic pressures and climate change. A healthy ocean that supports a sustainable ocean economy requires adequate financing vehicles that generate, invest, align, and account for financial capital to achieve sustained ocean health and governance. However, the current finance gap is large; we identify key barriers to financing a sustainable ocean economy and suggest how to mitigate them, to incentivize the kind of public and private investments needed for topnotch science and management in support of a sustainable ocean economy.

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Climate change is characterized by several elements, namely unpredictable rainy and dry seasons, floods and unpredictable droughts. This study aims to determine the indigenous peoples’ local wisdom in adapting to climate change, which includes screening process of local paddy seeds, the use of organic fertilizers, and traditional harvest management strategies. The method used in this research is the qualitative research method combined with the ethnographic approach. This method is applied based on the consideration that the topic of this research is related to the culture and social of indigenous peoples. The data was collected by means of in-depth interviews, observation, and documentation. Informants were selected by using the purposive sampling technique. The results were scrutinized carefully by means of the triangulation process. The results of the study show the facts that the way indigenous peoples deal with climate change is by physically and physiologically selecting seeds and storing seeds for three months so that the seeds will grow stronger. In addition, they only selects paddies that has reached a full state of growth, that is mature to avoid going rotten even though the climate change occurs. Then, they have the traditional rice dryers to get rice dried, thereby enabling those to be more climate-resistant. They also use the organic fertilizer to reduce the production of emissions as a cause of global climate change.

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Citarum River is the longest river in West Java Province, it is utilized for various anthropogenic activities that will affect the water quality, ecological state, and parameters of nitrates and phosphates in the waters of Citarum River. Nitrate and phosphate content can affect Phytoplankton abundance. Phytoplankton is a bioindicator to determine water quality. The purpose of this study is to determine the association of nitrates and phosphates with the abundance of phytoplankton and determine the quality of water in the Citarum River. The study began in August 2020 until September 2020. The research uses a survey method with a purposive sampling technique. Sampling was carried out at 5 stations with 5 times repetitions every 7 days. The water parameter analyzed are transparency, temperature, current, pH, DO, BOD, PO₄^2-,NO₃^–, Phytoplankton abundance, diversity index, and dominance index. Results showed that phytoplankton in the citarum river there were 24 genera divided into 4 phylum. Diversity index during the study reached between 0,91 – 0,99 and dominance index was in the range 0,01 – 0,2. Phytoplankton abundance ranges from 11 to 1292 ind/L. The highest genera phytoplankton composition at each station was found is Synedra as much as 1087 ind/ L. Nitrate content ranges from 0.13 – 0.33 mg/l and phosphate content range from 0.13 – 0.29 mg/l. The acquisition of R square value based on the simultaneous analysis of the relationship between nitrate and phosphate and the abundance of phytoplankton was 43,9% and 56,1% was influenced by other several factor namely temperature, water transparency, nutrient, and water flow.

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Fish is one of natural resources, which is important for food security. Small pelagic fish is one of the sources of food, the most widely consumed by people of Indonesia, given the existence of a fairly abundant species, and are found in almost entire territorial waters of Indonesia, and also has a relatively affordable price. Management of pelagic fishery in the waters of Indonesia, thus becomes important, especially to maintain the sustainable industry. Optimal and sustainable fisheries industry can only be achieved with proper planning through the implementation of appropriate management instruments as well. Fisheries resources accounting is one of the planning instruments, which should be used as a main reference of Fisheries Management Plan. In general, fisheries accounting provide insights for policy makers on how the flow of the stocks of fish and its relation to changes in the dynamic of natural and economic activity of fishing. Small pelagic resource accounting is one of the mandates of agenda 21 UNCED recommendation, as formulated in the System of Integrated Environmental and Economic Accounting (SEEA). Besides, this is also a decree of Indonesian Law No. 32/2009 regarding the Management and Environmental protection. The paper discusses the fisheries account, both physical and monetary, for small pelagic fish. By using resource accounting, we can understand the dynamics of the availability of stocks of small pelagic fisheries in Indonesia for the sake of food security. The methods in use is the standard bio-economic modelling, using fox algorithm for parameter estimation, and resource accounting method of the System of National Accounts of FAO [1], adapted to the data existing condition. The results of the analysis, include measurement of standing stocks (physical assets account), fishable biomass, depletion, as well as monetary account. Paper also provides suggestion for management, as well as policy recommendation.

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In recent months, strong global growth, rebounding commodity prices, and relatively accommodative financial conditions have benefited the Indonesian economy. The first quarter of 2017 in Indonesia saw resilient GDP growth, moderate inflation, stable exchange rates, an increase in the growth of non-oil exports, and an investment upgrade from ratings agency Standard & Poor’s. Investment growth, however, did not pick up enough to drive overall growth to a higher rate. The poor quality of banking-sector assets and the gaps in tax revenue—despite the fulfilment of the government’s tax-amnesty program—are two of the most immediate economic concerns. President Joko Widodo (Jokowi), who is well into the second half of his term, is under pressure to deliver on his development platform, which includes making progress in sustainable development and climate change mitigation. The effective management of forests is key to this platform. There has been longstanding tension over Indonesia’s forests between the protection of environmental values, including carbon storage, and the production of valuable commodities, including timber, palm oil, and pulpwood, which generate revenue and employment. We survey recent developments in four storylines related to forestry and climate change: first, Indonesia’s commitment to reducing emissions to 29%–41% below projected business-as-usual levels by 2030, as well as the international climate agreements and finance that can help achieve this commitment; second, land-use rights and regulations, including a moratorium on clearing, draining, or setting fires on peatland; third, measures to prevent catastrophic forest fires like those during the 2015 El Niño, including the establishment of the Peatland Restoration Agency; and, fourth, the actions of non-state actors, especially large agribusinesses, in managing forests and peatland. We conclude by discussing differences in the approaches of Jokowi’s administration and those of former president Susilo Bambang Yudhoyono’s administration and by questioning whether Indonesia’s budgeted resources, actions, and results to date are commensurate with its climate commitments.

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