Bank Indonesia Policy Mix

Climate Change Risk on Indonesia Indonesia is classified as a country that is vulnerable to the impact of climate change Indonesia is an archipelagic country that has >17,000 islands and it is vulnerable to climate change risks such as the sea-level rise From 2010-2018, national GHG emissions experienced an increasing trend of around 4.3% per year.. Very Vulnerable Vulnerable Intermediate Less Vulnerable Least Vulnerable Unrated Sovereigns Source: Standard and Poor's 2014 CLIMATE CHANGE RISK WATER SECURITY Based on the S&P report (2014), Indonesia is classified as a country that is very vulnerable to the impacts of climate change Increased levels of flooding and severe drought will exacerbate the scarcity of clean water.. FOOD SECURITY Changes in the production of biomes and ecosystems can lead to food scarcity for all creatures.. WHEALTH Floods can cause the spread of vector-borne diseases and death from drowning. Rise in temperature can cause death from heat stroke DESTRUCTION OF LAND, SEA, AND COASTAL ECOSYSTEMS It is scientifically predicted that severe forest fires will occur. This can lead to loss of ecosystems, biodiversity, and changes in Biomass. Rising sea surface temperatures cause the extinction of coral reefs, seaweed, mangroves, some biodiversity and marine ecosystems. Indonesia experienced a sea-level rise of 0.8-1.2 cm/year and around 65% of the population lives in coastal areas Reference IPCC (2014) Second Biennial Update Report, KLHK (2018) Roadmap NDC Mitigasi Indonesia, KLHK (2020) Roadmap NDC Adaptasi Indonesia, KLHK (2020) source: Bappenas (2021) source Data: KLHK (2020), data diolah From 1981-2018, Indonesia experienced a temperature increase trend of around 0.03 °C per year source: BMKG (2020) ESTIMATED COST LOSS and MITIGATION COST Scope If each country's NDC target is achieved, the global temperature rise can be limited to below 2.0°C Cost of mitigating climate change to achieve NDC Cost of climate change mitigation to achieve NDC (using mitigation action cost approach) Potential economic losses if not adapting to climate change (sectors analyzed: agriculture, water, health, and energy) Estimated Cost/Impact Continue to suffer economic losses of up to 0.2% -2.0% of global GDP per year Cumulative mitigation costs reach IDR 3,461 trillion by 2030 Cumulative mitigation costs from 2020-2030 reach IDR 3,779 trillion (IDR 343.6 trillion per year) Potential economic losses reach 0.66% -3.45% of GDP in 2030 Source: Ministry of Finance 89

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