Supporting National Commitment in Reducing GHG Emissions: A Painful Journey for Indonesian Local Government?

Sulistiadi Dono Iskandar and Andhika Putra Pratama

Abstract

In 2009, Indonesian ex-President, Susilo Bambang Yudhoyono declared Indonesia’s commitment to reduce its Green House Gas (GHG) emission.  The commitment later being legalized in Government Regulation No. 61 2011 (PP 61 Tahun 2011) along with the legal establishment of RAN-GRK  (National Action Plan for GHG Emission Reduction) and RAD-GRK (Local Action Plan for GHG Emission Reduction) Program. However, following  five years after the implementation of both program, the effectiveness itself is still in question especially in the case of local government level. This  paper aims to evaluate the effectiveness of GHG emission mitigation activities in provincial level from the budget perspective. On top of that, this  paper also attempts to investigate the determinant factors of local government’s effort to reduce GHG emission proxied by the total mitigation  expenditure in the particular province. Using Panel data analysis for each province with timespan of 2010–2015, our results suggest that mitigation  activities conducted by the local government are significant in reducing the GHG emission. Our result also shows that local government’s fiscal capacity does determine the level of budget dedicated for reducing GHG emission although with a very low coefficient,  suggesting that emission mitigation has not became a priority for the local government in Indonesia.

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