Indonesia has started the discussions and the implementation of performance-based payments for forest conservation/climate change mitigation through the REDD+ over the last years. In the regulatory sphere, new ways of forest finance are being taught through the Presidential Decree on Economic Instruments for the Environment (PP 46/2017). Alongside this development, various concepts such as the conservation districts and provinces (kabupaten/provinsi konservasi) have been established as sub-national initiatives. What remains missing is the financial support from the national government for these initiatives. A new law on fiscal relations between the national and subnational governments has recently been enacted in Indonesia. The Law number 1 year 2022 (Undang-Undang Hubungan Keuangan Antara Pemerintah Pusat dan Pemerintah Daerah) will redefine the country’s existing intergovernmental fiscal relations. Among others, these fiscal relations can be highly instrumental to incentive climate change related actions through forest conservation, especially in forested jurisdictions at provincial and local levels. In particular, through general-purpose transfers (DAU/Dana Alokasi Umum) which represents the country’s largest transfers to sub-national jurisdictions.
In this project, our team (under the name of RCCC UI, prior to the official establishment of the CCSF UI) has collaborated with highly respected institutions such as the Indonesian Academy of Sciences (AIPI) and its Indonesian Young Academy of Sciences (ALMI). AIPI and ALMI will assist in convening the process and the intended science-informed policy dialogue. Our contributions to this project range from the facilitate evidence-informed discussions, aid policy dialogue with policy-relevant stakeholders about the need for transformative fiscal transfer policies – The stakeholders include Governors of Forest Provinces (Papua, West Papua, North Kalimantan and Aceh), head of districts of forest rich districts from all over Indonesia, members of national parliaments (DPR RI), senate (DPD RI) representing these provinces and districts and also dozens of parliament members across multiple political fractions. This project has also successfully carried out discussions on the agreed fiscal transfer policies process, including with the relevant ministries (Ministry of Finance and Ministry of Internal Affairs). This project has spawned an initiative called Kaukus Daerah Bertutupan Hutan.
