Innovative Finance Forum: Sustaining Indonesia’s Tropical Landscapes
14 March 2016, Jakarta (Indonesia)
The global community reached agreement on two significant global processes in 2015 that will shape the international development trajectory in the decades to come. The Sustainable Development Goals (SDGs) came to fruition in September, and in December the landmark Paris Agreement was agreed to by 196 nations to put in place an ambitious and comprehensive global regime to motivate future climate action. 2015 was also marked; however, by raising inequality – Oxfam projects that in 2016, top 1% of the world’s population will own 99% of the world’s wealth, and by record-breaking global warm temperatures – NASA and the National Oceanic and Atmospheric Administration (NOAA) independently concluded that in 2015 surface temperatures were the warmest since modern record keeping began in 1880. To realize a future that meets the needs of the people and the planet, 2016 will need to be known as the year when all countries took bold action to transition away from business-as-usual towards a more sustainable model of development.
Indonesia is uniquely placed to considerably shape and push the global shift towards a green economy. At the same time, the protection of its environment, in particular its forests – vital for the global ecological balance – requires serious investment and support to achieve climate change mitigation on a global scale. The country has articulated clear intentions to conceptualize and implement an alternative- sustainable- development paradigm, anchored by a commitment to reducing national GHG emissions by 29 percent by 2030 according to 2010-projected business-as-usual pathway. From Indonesia’s perspective, innovative finance can help drive the green economy transition. This transition requires structural changes that go far beyond finance per se, but for which finance is a key enabler.
By addressing specific market failures and institutional barriers, innovative financing has the potential to secure and mobilize investment that would otherwise not be available through traditional resource flows. While complementing rather than replacing already existing forms of finance, innovative finance helps investors enter markets that would otherwise not available and it affords investment opportunities for those conscious of social and environmental impact. To develop innovative financial mechanisms, coordinated action needs to be taken by governments and the financial sector, with development partners and research institutions playing an important facilitating role.
Government of Indonesia, United Nations Environment Programme (UNEP), the United Nations Office for REDD+ Coordination in Indonesia (UNORCID), CCROM SEAP – Bogor Agricultural University, Code REDD, Earth Institute – Columbia University, Global Canopy Programme (GCP), United Nations Sustainable Development Solutions Network (SDSN), and World Agroforestry Centre (ICRAF)