Indonesia has committed to contribute in global effort to keep warming to well below 2 degrees celsius and set ambitious goal to continue efforts in keep warming to well below 1,5 degrees celsius as agreed on Paris Agreement. Each parties may cooperate to meet each reduction emissions target as set out in Article 6 of Paris Agreement to meet its ambitious targets.
Indonesia proposed intended proposal to participate in Partnership for Market Readiness on 2011 through National Council on Climate Change (NDCC) or Dewan Nasional Perubahan Iklim (DNPI) as its efforts in climate change mitigation. Further in 2013, Indonesia granted allocation funds of USD 3 million to implement its PMR proposed program.
At 2016, World Bank together with UNDP Indonesia signed agreement to implement proposal of PMR Indonesia under coordination of Coordinating Ministry of Economic Affairs
Indonesia contribution in Partnership for Market Readiness
Indonesia proposal focused on power generation and intensive-energy industry sub sector since both sector are main contributor on GHG emission in future.
Indonesia proposes program as follow:
- Study on emission profiling in power generation and intensive-energy industry sub sector
- Development of emission monitoring, reporting and verification (MRV) system at power generation and intensive-energy industry.
- Piloting MRV system in Jawa-Madura-Bali grid and selected sub sector of industry
- Study on market-based instrument, possibility of its implementation in Indonesia and if possible, design and piloting instrument on selected sub sector
Indonesia participation on Partnership for Market readiness (PMR) is nor binding or official commitment to state Indonesia will implement market based instrument. Nevertheless, outcome of piloting MRV system shall provide valuable recommendation for policy making particularly on GHG emission.
The objectives of PMR Indonesia
Development in profiling emission and baseline
PMR Indonesia develops emission profile by estimate reduction emission potential and its cost in technology level and develop emission baseline on focused sector namely energy sector.
Development and pilot of MRV system
As part of climate change mitigation and fulfil mandate of Presidential Regulation No.71/2011 on the implementation of a national GHG inventory, PMR Indonesia support reporting, management and reduction of GHG emission; improve accuracy, quality and data consistency; support implementation of policy, program and government strategy related with implementation on market-based instrument that lead the implementation of other sector.
Design market-based instrument
To design market based instrument, PMR Indonesia reviews implementation on market-based instrument on other countries, identify option on suitable market-based instruments in Indonesia, review other necessary aspects on the implementation on market-based instrument as well as develop concept and action plan on market-based instrument that have potential to implement in Indonesia as well as piloting market-based instrument on selected sector.