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Minister of Finance: The Importance of Collaboration to Create a More Environmentally Friendly World Economy

Jakarta, 12/07/2021 MoF - Each country needs to contribute together to achieve a world economy that is more environmentally friendly, more resilient, and sustainable. There is a need for joint financing collaboration from the international community as well as from the business sector through efforts to implement carbon pricing, prepare carbon markets, and carbon taxes.

“So I think this will be a strategy that needs to be done at a global level. But keep in mind that the world consists of so much diversity in terms of capacity and level of development between countries,” explained Minister of Finance (Menkeu) Sri Mulyani Indrawati when speaking at the Climate Change Conference which was held virtually, Sunday (11/07).

On that occasion, the Minister of Finance also conveyed a number of important aspirations related to sustainable financing needed to support global climate control actions. First, the exploration of policy mix options and multidimensional approaches in promoting sustainable financing through the implementation of developed country commitments, increasing Multilateral Development Banks (MDBs) support, increasing access to technology, and mobilizing private investment.

Second, develop a framework and reference for climate change financing, such as carbon pricing, incentive schemes, and innovative finance, to accelerate mitigation actions. And thirdly, conduct a comprehensive assessment of the economic impacts of climate change, especially widening implementative impact of climate change policies.

The Minister of Finance continued, currently Indonesia is preparing a legal basis through a legislative process for the implementation of carbon pricing, which will include a carbon trading mechanism and carbon tax. In addition, Indonesia also has a number of national policies for controlling climate change, such as climate mainstreaming into the national budget system through climate budget tagging and the development of innovative financing through green sukuk issuance. (nug/ip/hpy)