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.<\/p>\n\n\n\n
We uncovered that the promise of a green recovery and \u201cbuild back better\u201d has not yet materialized, as evidenced by the fiscal stimulus packages which have overwhelmingly been spent on dirty sectors<\/a>. And while the carbon pricing regulation is a big step forward for Indonesia\u2019s climate policies, its effectiveness needs to be bolstered by addressing existing energy subsidies<\/a> and market integrity issues<\/a>. Municipal governments need to be more proactive in seeking innovative forms of finance to attract green investments, such as through municipal bonds<\/a> or enabling more energy efficiency business models<\/a> to thrive. Jakarta has enjoyed a lot of climate finance support<\/a> 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 \u2013 we leave you with an interview on whether COP26 was a success or failure<\/a>, and the work ahead.<\/p>\n\n\n\n Here is a reflection of the progress we have made in 2021, and a preview of what is in stock for 2022.<\/p>\n\n\n\n
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