This document discusses Indonesia's efforts to track climate change expenditures through its Climate Expenditure Tracking System. It established a budget tagging system through a 2014 ministerial decree to identify and track public spending on climate change mitigation activities. The tagging aims to monitor expenditures against Indonesia's emissions reduction targets in its National Action Plan. While current spending only achieves 15% of emission targets, budget tagging is intended to help scale up financing to meet Indonesia's 26% reduction commitment. The system classifies activities as directly reducing emissions or supporting mitigation implementation and will code budgets according to programs, components, and climate impact indicators.

1. Dr. Syaifullah Deputy Director of Policy Center for Climate Finance and Multilateral Fiscal Policy Agency - Ministry of Finance of the Republic of Indonesia
Indonesian Climate Expenditure Tracking System
December 4th, 2014 EU Pavilion – UNFCCC COP 20 Lima, Peru

2. Presidential decree 61/2011 on RAN- GRK (National Action Plan on Greenhouse Gas Emission Reduction)
26% [767 Mt CO2]
41% [1,189 Mt CO2]
Domestic Capacity
With International Support
26%(MT)
41%(GT)
Forestry and peat land
672
87,61%
1,039
87%
Waste management
48
6%
78
7%
Energy and transportation
38
5%
56
5%
Agriculture
8
1%
11
1%
Industry
1
0,130%
5
0%
Total
767
100%
1,189
Further Elaboration
RAN GRK
Draft INDC Indonesia
COMMITMENT

3. MFF focus on mitigation actions in forestry, peat, energy and transportation which includes 93% of national emissions reduction targets.
Budget related to mitigation activities in RAN-GRK in 2012 around Rp 15.9 trillion.
If financing RAN-GRK maintained at the same level in 2012, the emission reduction achieved only 15% (116 MtCO2e) from the target of 767 MtCO2e.
MFF Study suggested MoF to apply budget tagging/tracking and scoring system in order to achieve 26% percent emission reduction target with existing spending trend.
MoF – UNDP : Mitigation Fiscal Framework

4. MoF – CPI : Indonesia Climate Finance Landscape
66% Govt Budget
33%
others
68%
32%
20%
80%

5. 5
LESS Study (2013) proposed budget-tagging system for climate change mitigation actions at national level.
MoF issued Ministerial Decree No. 136/PMK.02/2014 in June 2014 on Guideline for Budget Planning and Review for line ministries.
Budget tagging aims to track and report public expenditure for mitigation actions (and later on adaptation) mandatory for 7 key line ministries under RAN-GRK.
Identify clearly the contribution of budget units for mitigation actions and enable budget negotiations to take place in the knowledge of the impact of decisions on emission reduction.
MoF – UNEP/UNDP : Low Emission Budget Tagging and Scoring System
Based on Presidential Decree No. 61 Year 2011, activities for climate change can be classified into 2 types :
1)Main Activity : all activities which have direct impact to emission reduction, improve the capacity for emisiion absorption, and stabilization/conservation of carbon stock;
2)Support Activity : all activities which have not direct impact to emission reduction but give support to main activity implementation.

6. Program
Activities
Component
Sub-Component
Budget Code
Detailed Expenditure
Outcome (Quantitative and Qualitative)
Output (Volume, Type, Unit)
Main Indicator Perfomance
Indicator Performance for Activities
Climate Mitigation
Marking
CLIMATE MITIGATION MARKING
Budget themes :
1.MDG’s-1 : Poverty Alleviation;
2.MDG’s-2 : Basic Education;
3.MDG’s-3 : Gender Equality and Women Empowerment;
4.MDG’s-4 : Child Mortality Rate;
5.MDG’s-5 : Mother Health;
6.MDG’s-6 : HIV/AIDS, Malaria, and Other Diseases Alleviation;
7.MDG’s-7 : Environment and Climate Change;
8.MDG’s-8 : Global Cooperation;
9.Infrastructure;
10.Public Private Partnership;
11.South-South and Triangular Cooperation.

7. BUDGET SOFTWARE

8. WAY FORWARD
Strengthening the Consistency and Accountability of Planning and Budgeting Process
Putting in Place Performance-Based Budgeting System for Budget Efficiency
Preparation of Fiscal Instruments to Support Climate Financing