Indonesia Committed to Reduce Carbon Emission Through Green Energy Transition

Minister of Finance Sri Mulyani (Photo by: PR of Cabinet Secretariat/Agung)

Indonesia is committed to decrease carbon emission by promoting transition to green energy, Minister of Finance Sri Mulyani has said.

“We will make an energy transition to environmentally friendly energy, to green energy. Energy has the largest contribution to reducing CO₂, but it also has the largest cost. Therefore, aspects to redesign an affordable energy transition that takes into account social and economic aspects are needed,” she said in her press statement at the G20 Webinar Series: Unlocking Innovative Financing Schemes and Islamic Finance in Jakarta, Wednesday (07/27).

According to Sri Mulyani, based on the Nationally Determined Contribution (NDC), Indonesia will be able to reduce carbon emission by 29 percent alone or by 41 percent with global support.

“To meet this target, we continuously work on the financing. In terms of financing instrument, we introduced green sharia bonds in 2018. We have also issued more than US$3.5 billion with green bond instrument globally and in fact, we have introduced it on local and retail levels,” she said.

Sri Mulyani also stated that one of the financing designs to solve climate change is financing instruments based on sharia/Islamic law, which is waqf (endowment) sharia bond.

“We need to continue to develop waqf. The Vice President is one of those who encouraged us to develop waqf-based financing. Later, in forums such as Islamic economist association, I will also ask them to keep exploring various possibilities of sharia financing schemes,” she remarked. (PR of Ministry of Finance/UN) (DH/MMB)

The official website of Ministry of Finance can be accessed here.