Norway to pay Rp812 billion for gas emission reduction in Indonesia

Norway to pay Rp812 billion for gas emission reduction in Indonesia

Indonesian Ambassador to Norway Todung Mulya Lubis (right) and Norway's Minister of Climate and Environment, Sveinung Rotevatn (left). (photo: Indonesia's embassy in Oslo)

Jakarta (ANTARA) -
The Government of Norway will for the first time pay up to Rp812.86 billion or 530 million NOK to Indonesia for being able to reduce emissions from deforestation.

The money was result-based payment as agreed in cooperation in REDD+ (reducing emissions from deforestation and forest degradation plus), The Indonesian Embassy in Oslo said in a statement on Sunday.

Indonesian Ambassador to Norway Todung Mulya Lubis lauded the Norwegian Government's support to Indonesia in carbon emission reduction.

"We welcome the announcement on the result-based payment by Norway's Minister of Climate and Environment, Sveinung Rotevatn," Ambassador Lubis said.

Indonesia and Norway have established cooperation in the environmental affairs over the last 10 years.

Lubis held a meeting with Minister Rotevatn on June 17, 2020. The Norwegian Government considered Indonesia as an important partner in the efforts to slow down the climate change impact and to cut greenhouse gas emissions which have triggered global warming.

"We hope that this cooperation continues and will be intensified in coming years," the ambassador said.

Under the REDD+ cooperation agreement in 2010, Norway agrees to allocate funds amounting to six billion NOK or some RP9.2 trillion for Indonesia if successful in reducing carbon emissions.

"This is the first time Norway pays for Indonesia's results in emission reductions. After 10 years of hard work, deforestation in Indonesia is going down. Emissions from deforestation and forest degradation in Indonesia were lower in 2016-17 than in the preceding decade," the Norwegian Government said on its official website dated July 4, 2020.

An independent third party has verified Indonesia's results for the forest year 2016-17.

The report confirms that Indonesia – home to the world's third largest rainforest – has reduced emissions amounting to approximately 17 million tons of CO2. This is equal to one third of all annual emissions from Norway.

This is a groundbreaking moment. Indonesia has embarked on a remarkable journey, and the forest and land use reforms undertaken by President Joko Widodo and Environment and Forestry Minister Siti Nurbaya are yielding impressive results, Minister Sveinung Rotevatn said.

"These are good news for Indonesia, for the world, and for our partnership. Indonesia is all set to continue delivering further reduced deforestation, and we are delighted to make our first results-based payment and enter a new phase of our partnership," he remarked.

The disbursement is the first manifestation of the two countries having completed the two first phases of their partnership and entered the results-based phase, as announced in 2019. The calculation of Indonesia's results is based on jointly agreed rules.

The statement also quoted recently published reports from the Indonesian government that indicate that deforestation has stayed at the same level or lower in 2017-18 and 2018-19.

"This is very encouraging. These numbers will, if and when verified, be the basis for further results-based payments from Norway to Indonesia, enabling us – if Indonesia continues to deliver over the next few years – to continue to fulfill our 6 billion NOK pledge from 2010 through results-based payments," Rotevatn stated.

Indonesia is working to finalize the establishment of the government's Environment Fund (the BPDLH), which will be Indonesia's official channel for receiving results-based payments.

The full disbursements will happen when the Fund becomes operational and a grant agreement is signed, which is planned to happen this fall, the Government of Norway said in its statement .

The maximum number of emission reductions Indonesia can be rewarded for by Norway and other financiers is 11,2 mill tons CO2, after the deduction of a 35% set-asides for uncertainty, other risk factors, and Indonesia's own ambition, as agreed between the two countries.

For the result year 2016-17, Norway will provide result-based payment for all results available. The price is 5 USD per ton CO2 of the reduced emissions, totaling 530 million kroner (56 million USD) to Indonesia.

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