Dilemma of energy used for cooking in Indonesia

Indonesia still relies on imports to cope with a shortage of liquefied petroleum gas (LPG), which is expected to worsen in the coming years because of surging demand. Indonesia’s consumption of LPG rose to 6.67 million metric tons last year, up 1.5 percent from 2015, according to the data from the Energy and Mineral Resources Ministry. The domestic production of LPG, however, dropped to 2...

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Enabling opportunities to diversify farmers' livelihoods: Blending adaptation and mitigation practice

It is not difficult to source biogas technology. BIRU programmes in partnership with the government and private sector are currently expanding their effort to deliver the biogas to the last mile in order to enable local farmers to increase their adaptive capacity.

Biogas acts as a means of waste alleviation and management, preventing pollution, and enabling a healthy environment for farming communities. The biogas produced from anaerobic digestion can be used in this concept with manure as main feedstock, since this technology is already widely distributed. Bioslurry can also be produced as a side product of the biogas, and can be used as an organic fertilizer on the coffee plantation. A positive impact of this approach is that it reduces reliance on artificial fertilizers, resulting in more sustainable agricultural practice. With the help of the coffee community to increase demand, the concept can make biogas more accessible and make a real, positive impact on the reduction of greenhouse gas emissions.

Transition pathways and risk analysis for Bioenergy in Indonesia

Governing almost 260 million people dispersed on hundreds of Islands leads to institutional complexities. Indonesia’s form of government is a presidential system where the president is elected directly by the people and draws up legislation together with the parliament (Kawamura 2010) (Kawamura, 2010). There are 34 ministries at national level. The decentralisation policies of the past led to a total of 34 provinces and 82,330 local government units, which all retain certain policy making power(GRAPHIQ, 2016).

The policy architecture itself is also complex. When it comes to climate policy, there is the NDC of Indonesia which sets a 26% emissions reduction target (41% with international help) by 2020 compared to business as usual (Republic of Indonesia, 2015). Nationally, this has been translated into the National Action Plan for Greenhouse Gas Emission Reduction (RANGRK) which confirms the objectives stated in the NDC. In the energy sector, the flagship project of the government is the 2014 National Energy Policy (NEP 14) which sets out, amongst other things, a target for the national energy mix. By 2025, 30% of energy should be sourced from coal, 25% from gas, 23% from Renewables and 22% from oil (IEA, 2016). In addition, Indonesia has set an interim target of a 19% share of renewable energies by 2019 (Mittal, 2015).

Encouraging private sector participation in climate finance

The demands of mitigation and adaptation policies are important to understanding a country’s climate change preparation by providing microfinance in the agricultural sector. This could be seen as a strategy to fight against the challenges of future food security. In 2014, Indonesia established climate change adaptation policies. This legislation aims to pave the way for making actions on climate change adaptation mainstream in national and local development planning. Public and private finance have supported the implementation of the climate actions. However, most funding is still used for mitigation. Adaptation finance needs support, especially in agriculture. This research paper studies opportunities for microfinance to play a role together with existing resources in supporting climate change adaptation in Indonesia.  The data was acquired and analysed through a literature review, analysis of case studies and interviews with stakeholders in the climate change-related financial sector. The central findings regarding the opportunity for microfinance to contribute to the existing schemes in Indonesian climate change adaptation finance for agriculture are worthy of the result. This study found that adaptation finance is mostly used for indirect activities. Meanwhile, local communities, and farmers in particular, need directly targeted measures to adapt to climate change. An alternative approach is providing microfinance, insurance and capacity development for farmers to produce high quality agricultural products. This would contribute to optimizing the agri-food value chain, which supports socio-economic development of stakeholders, especially farmers. Hence, microfinance appears to be one potential solution to support direct climate change adaptation actions for the agricultural sector. However, this may not be strong enough to finance the entire needs for agricultural climate actions. Adaptation is contextual, so it has to be grounded in the needs of local communities.  Microfinance needs public sectors support as well as other resources from the private sector. In the case of rapid response to disasters, which often destroy the agricultural sector, microfinance should be advantageous in supporting adaptation. However, in reality, it does not work, as it is prevented by regulations. So, this can be an area the public sector can support as a risk-taker as well as by providing initial funds and resources for scaling up efforts.

Full paper will be published in Future of Food: Journal on Food, Agriculture and Society. Volume 4 Number 3.