The minister noted that on an annual basis, the Indonesian government allocates 3.5 percent of the State Budget (APBN), on average, to finance activities related to mitigation and adaptation to climate change.
Jakarta (ANTARA) - Well-calculated budgeting strategies and consistent budget tagging can help a country support its agenda related to the handling of climate change, according to Indonesian Finance Minister Sri Mulyani Indrawati.

Speaking at the Indonesia-Europe Investment Summit 2023, Indrawati remarked that the severity of impacts of climate change on Indonesia, including an increase in temperature, had continued to grow, which, in turn, could lead to disasters.

"Indonesia continues to utilize fiscal as an important tool in its climate agenda," she remarked at the summit that was followed online in Jakarta on Thursday.

The minister noted that on an annual basis, the Indonesian government allocates 3.5 percent of the State Budget (APBN), on average, to finance activities related to mitigation and adaptation to climate change.

According to the state treasurer, climate change is a shock that is forecast to result in lasting impacts on the planet.

Bearing that in mind, Indrawati affirmed that Indonesia has committed to playing a role as a leader in contributing to a reduction in carbon emissions, as reflected in the issuance of the government's Nationally Determined Contribution (NDC) document.

She affirmed that the Indonesian government would continue to devise workable strategies for the utilization of the APBN to deal with climate change impacts, especially temperature spikes.

Indrawati explained that the strategies could take form in various policies that focus on ensuring balance between revenue and natural resources' sustainability, drawing investments in green energy and eco-friendly technology, and paving the way for a fair and affordable energy transition.

The minister expressed belief that adjustments to taxation could help Indonesia attract more business players to invest in eco-friendly sectors, such as electric vehicles.

She also noted that the government would continue to invest efforts to support low-carbon and climate change-resistant development, strengthen the regions' spending capacity, provide fiscal buffers for disaster mitigation financing, and build eco-friendly infrastructure.

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Translator: Agatha O, Tegar Nurfitra
Editor: Arie Novarina
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