A cautious sense of optimism has buoyed us throughout 2021 and landed us into 2022. In 2021, Indonesia delivered fiscal stimulus packages, announced pledges at COP26 in Glasgow, revealed the long-awaited carbon pricing policy, and passed a law to move the capital city from the sinking Jakarta to the forested areas of North Kalimantan. Throughout the year, CPI has unpacked some of the finance perspectives of these policies to see whether they are consistent with a low-carbon economy.

We uncovered that the promise of a green recovery and “build back better” has not yet materialized, as evidenced by the fiscal stimulus packages which have overwhelmingly been spent on dirty sectors. And while the carbon pricing regulation is a big step forward for Indonesia’s climate policies, its effectiveness needs to be bolstered by addressing existing energy subsidies and market integrity issues. Municipal governments need to be more proactive in seeking innovative forms of finance to attract green investments, such as through municipal bonds or enabling more energy efficiency business models to thrive. Jakarta has enjoyed a lot of climate finance support being a capital city and will need to prepare itself for when it loses that status. At the end of the year, all focus was on COP26 and the pledges Indonesia made – we leave you with an interview on whether COP26 was a success or failure, and the work ahead.

Here is a reflection of the progress we have made in 2021, and a preview of what is in stock for 2022.

Asia Dialogue: Recovering from COVID-19 – Can Asia’s fiscal stimulus packages become instruments for a green recovery?

A high-level virtual dialogue that featured key policymakers from Indonesia, Philippines, Singapore, India, and South Korea who deliberated on how their respective countries have considered a green economic recovery.

> Watch the full session

Improving the impact of fiscal stimulus in Asia

India, Indonesia, the Philippines, Singapore, and South Korea have together announced a total of USD 884 billion in COVID-19 recovery stimulus packages since the outbreak of the pandemic in February 2020. But how effective will those public investments be in producing long-term, sustainable growth? This study, jointly produced by CPI and Vivid Economics maps the ‘greenness’ of these fiscal stimulus measures and their contribution towards country-level climate objectives.

> Read the report

Response to COVID-19: Energy Conservation and Efficiency Survey

The COVID-19 crisis triggered a huge downturn in various sectors of the economy, including the energy sector. In Indonesia, from January to June 2020, electricity consumption fell -7.06% in the industrial and commercial sectors. This study, produced in collaboration with the Indonesia Energy Efficiency Society (MASKEEI), aims to measure and understand how COVID-19 has impacted the business of facility owners and energy efficiency service stakeholders through a targeted survey.

> Learn more

Leveraging fiscal stimulus to improve energy transition: Case of South Korea and Indonesia

In the first half of 2020, electricity consumption in South Korea and Indonesia dropped by -2.8% and -7.06% respectively as compared to 2019, indicating that the COVID-19 recession had a similar impact on the energy sectors of both countries. South Korea used its economic recovery stimulus to address climate and environmental challenges, whilst Indonesia’s national recovery stimulus made no explicit mention of greenness.

This study, produced in collaboration with the Seoul National University, aims to analyze the COVID-19 recovery policies in South Korea and Indonesia, particularly the role of fiscal stimulus in their energy transition goals and offers recommendations on how both countries can still make policy and public investment changes in their post-COVID stimulus efforts to achieve their energy transition goals.

Read the publication

Blog: Can tropical rainforests benefit from surging voluntary carbon markets? The case of Indonesia

Indonesia has listed carbon pricing as one of the key climate finance instruments on its climate policy directions, recognizing the potential value of voluntary carbon markets. This blog proposes how tropical forest-rich countries such as Indonesia can respond positively to the upsurge of voluntary carbon markets.

Read the blog

Accelerating renewable energy finance in Indonesia: The potential of municipal green bonds

This study explores the use of municipal bonds to support Indonesia’s energy transition targets and analyzes the overall feasibility of implementing such bonds. Despite their potential, Indonesia’s capital market is yet to see the issuance of municipal green bonds due to multiple challenges. CPI’s report outlines the opportunities and challenges, both on the supply and demand side, and explores potential solutions to overcome the gaps in issuing municipal bonds.

Read the publication

Blog: Indonesia wants a carbon tax, but with subsidies?

Indonesia is preparing a carbon tax to cut down emissions and free up funds for climate action. But a carbon tax on coal and fuels will not affect buyers as the cost is kept artificially low by government subsidies. To achieve its goal, the carbon tax should open a wider opportunity for Indonesia to refocus its state budget, and phase out its fossil-fuel subsidies. This blog highlights the key elements for the carbon tax to launch successfully.

Read more

CPI at COP26

CPI experts hosted and presented at several events during COP26 that covered the global landscape of climate finance, emerging instruments to drive sustainable finance, net-zero finance integrity, approaches to closing the investment gap for urban climate projects, and other topics. Many of these events were livestreamed, so can be viewed virtually.

Explore the events

Exploring Viable Energy Efficiency Business Models in Indonesia

Despite clear benefits, multiple regulations supporting energy conservation, and large opportunities, energy efficiency business models in Indonesia face multiple barriers. This report identifies the challenges faced by ESCOs in Indonesia’s energy efficiency market and suggests improvements, based on market research of existing energy efficiency business models that are viable and can be scaled up in Indonesia.

Read more

Assessing Jakarta’s Climate Investments

Despite the existing climate risks and the ambitious 2030 GHG emission reduction target, only 8.6% of Jakarta’s municipal budget went to environment-related spending in 2017 and 2018, despite its strong fiscal capacity. This case study, produced by the Cities Climate Finance Leadership Alliance, is a first-of-its-kind attempt to track public and private urban climate investment flows in Jakarta.

Explore more

What’s next for Yayasan CPI Indonesia?


In 2022, CPI Indonesia will continue working to support a green and just economic recovery.

At CPI we believe effective finance is not possible without transparency and traceability. That is why CPI will launch a series of studies mapping where green investments occur in Indonesia and Asia, and where support for fossil fuel still prevails. We will highlight solutions focusing on de-risking energy efficiency projects, accelerating the energy transition, and integrating sustainable finance within financial institutions. Other studies lined up for the year include Climate Change Fiscal Framework, Blue finance Landscape, Landscape of Climate Finance in Asia, and Green Banking in Indonesia, among others.


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