S'pore, Indonesia ink climate change partnership to pursue goals, including green finance

Senior Minister Teo Chee Hean (right) and Indonesia’s Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan at the signing ceremony. ST PHOTO: JASON QUAH

SINGAPORE - Singapore and Indonesia inked a climate change partnership on Monday (March 21) that could see them working on clean technology research, or pilot projects related to various ecosystems on land and sea.

They may also share best practices or develop projects related to implementing Article 6 of the Paris Agreement, which outlines creating an international carbon market to help countries meet emissions reduction targets.

Four key areas that both nations will collaborate on are carbon pricing and markets, nature-based solutions and ecosystem-based approach, clean technology and solutions, and green and blended finance.

Blended finance refers to a mix of sources of capital to support sustainable projects in developing countries.

Senior Minister and Coordinating Minister for National Security Teo Chee Hean and Indonesia's Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan inked a memorandum of understanding (MOU) on Monday to commence various collaborations on sustainability and climate change.

The agreement was developed following the Singapore-Indonesia Leaders' Retreat in January this year.

Annual high-level ministerial meetings and an inter-agency working group involving senior government officials from both countries will commit to advancing the agreement's objectives, said Singapore's National Climate Change Secretariat and Indonesia's Coordinating Ministry for Maritime and Investment Affairs on Monday.

A work plan, including pilot projects, research collaborations and technical exchanges, between both countries will be developed.

Both countries will also explore financing solutions in areas such as carbon credit projects, carbon capture and storage, and the development of renewable energy solutions to support regional decarbonisation.

Speaking on the sidelines of the signing at Parkroyal Collection Marina Bay hotel, Mr Teo said the MOU will create development opportunities and jobs.

"Singapore will continue to seek opportunities to collaborate with like-minded regional and international partners to create new solutions for a decarbonised and sustainable future.

"Such partnerships will enable Singapore to achieve our net-zero goal by or around mid-century, as we create and seize new green growth and job opportunities," added Mr Teo, who also chairs the Inter-Ministerial Committee on Climate Change.

Mr Luhut said Indonesia will establish a Blended Finance Alliance under the Group of 20 (G-20) framework.

The alliance will be a multilateral and international institution to pool funds and projects related to climate change and the United Nations’ sustainable development goals.
Indonesia took over the leadership of the G-20 this year, and Mr Luhut invited Singapore to join its Blended Finance Alliance.

Elaborating on the new Blended Finance Alliance, Indonesia’s Deputy Minister for Environment and Forestry Management Nani Hendiarti said blended finance can be used to fund the country’s mangrove rehabilitation and restoration projects, as well as its goals to partially retire its coal-fired power plants, and replace them with renewable energy.

Jakarta has developed a proposal to establish an early retirement of some of its coal-fired power plants with a capacity of 5.5 gigawatts, and replace them with renewable energy with a capacity of 3.7 gigawatts by 2030, added Dr Nani.

Mr Luhut invited Singapore to be a partner in Indonesia’s food estate project, which focuses on improving yields on existing farmland and developing new agricultural land to raise the archipelago’s food security.

Government agencies and other stakeholders, such as the private sector and academia, will be involved in the tie-up between both nations.

Mr Luhut said Indonesia will establish a Blended Finance Alliance under the Group of 20 (G-20) framework.

The alliance will be a multilateral and international institution to pool funds and projects related to climate change and the United Nations' sustainable development goals.

Indonesia took over the leadership of the G-20 this year, and Mr Luhut invited Singapore to join its Blended Finance Alliance.

The G-20 is an international grouping of 19 advanced and emerging economies, and the European Union.

Singapore, although not a G-20 member, has been invited to participate in the G-20 summits and its related processes.

In January, the Republic was invited by Indonesia to attend this year's G-20 Summit in Bali later this year.

Elaborating on the new Blended Finance Alliance, Indonesia's Deputy Minister for Environment and Forestry Management Nani Hendiarti said blended finance can be used to fund the country's mangrove rehabilitation and restoration projects, as well as its goals to partially retire its coal-fired power plants, and replace them with renewable energy.

Jakarta has developed a proposal to establish an early retirement of some of its coal-fired power plants with a capacity of 5.5 gigawatts, and replace them with renewable energy with a capacity of 3.7 gigawatts by 2030, added Dr Nani.

Mr Luhut invited Singapore to be a partner in Indonesia's food estate project, which focuses on improving yields on existing farmland and developing new agricultural land to raise the archipelago's food security.

The project is currently in progress.

Under the new agreement between both countries, collaborations and exchanges on carbon pricing are on the cards.

Last month's Budget announced that Singapore's carbon tax would be raised from the current $5 a tonne of emissions to between $50 and $80 by 2030.

During last year's United Nations Climate Change Conference in Glasgow, Indonesian President Joko Widodo announced a regulation that sets a price on carbon emissions and creates a mechanism to trade carbon.

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