AN-GRK Review Process NATIONAL ACTION PLAN FOR GREEN HOUSE GAS EMISSION REDUCTION

Guideline for Implementing Green House Gas Emission Reduction Action Plan 13 The national GHG emission level calculation based on BAU condition needs to be done accurately. For several sectors, re-evaluation needs to be done. Therefore, it is necessary periodically to conduct RAN-GRK monitoring and review based on these considerations. RAN-GRK document renewal is also made possible based on the international negotiation results in the UN Convention on Climate Change UNFCCC. The goal of a RAN-GRK review is to: • Secure international recognition from UNFCCC that Indonesia has met its promise to reduce GHG emission. • Accommodate the latest information, developmental progress and negotiation results at the international level. • Meet requirements to access international funds such as Green Climate Fund . Furthermore, after the issuance of Prepres No. 61 Year 2011 on RAN-GRK, a review needs to be done to follow up various issues, namely: • To date, there has been no baseline on the Business As Usual BAU condition in Indonesia, while baseline establishment is vital in identifying how much GHG emission is successfully reduced through the mitigation actions that are executed. Moreover, to calculate the baseline, it is necessary to set GHG emission reduction targets correctly for related sectors. • Baseline calculation must consider development plans from sectors related to GHG emission reduction and must be translated until 2020. • Detailed calculation as a basis for supporting information to set GHG emission reduction targets for each sector within RAN-GRK is not available yet. However, the best way to calculate GHG emission allocation for each sector target is by irstly establishing a baseline; secondly, developing mitigation action scenarios for example, to improve energy eficiency program, improve production process, or shift in use of industrial raw materials; lastly, calculating GHG emission reduction potential within the mitigation actions implementing period. In other words, if baseline setting is made the calculation basis for the impacts of GHG emission reduction actions, reasonable target igures for each sector may be obtained. • Many mitigation actions for reducing emission by 26 which are contained in the annex of Perpres No. 61 Year 2011 need to be reviewed as to whether such activities can potentially reduce GHG emission. For example, the forestry sector includes tree-growing as GHG emission mitigation action, however there is no explanation as to how much emission will be reduced or carbon will be absorbed through the effort. Furthermore, basic data for peat land must be completed in order to be able to identify how much potential it has and the best mitigation action design. Guideline for Implementing Green House Gas Emission Reduction Action Plan 14 • The policy direction set in RAN-GRK needs developing further into practical issues. • There is no establishment of mitigation actions to reach GHG emission reduction target range from 26 to 41. • There is no monitoring system for RAN-GRK implementation, while to be able to be internationally recognized, Indonesia needs to submit a report that follows the MRV standard Measureable, Reportable, and Veriiable 4 . For GHG emission reduction mitigation actions by 26, the national MRV system is considered being already adequate, but the result still need consultation and analyzing according to the international standard. Meanwhile, for GHG emission reduction target ranging from 26 to 41, Indonesia must possess an MRV system according to the international standard UNFCCC. If designed, implemented and monitored properly, RAN-GRK will be recognized by UNFCCC as Indonesia’s oficial mitigation target that was presented on January 30, 2010. The Ministry of National Development Planning Bappenas will conduct periodic coordination in the integrated RAN-GRK evaluation and review adjust it to the national needs and latest global developments. After that, the Minister of PPNBappenas will submit a recommendation for a RAN-GRK review to the Coordinating Minister for Economy who will determine changes on the Matrix of RAN-GRK Activities as mentioned in Annex of Perpres No. 61 Year 2011 on RAN-GRK. The Sixteenth Conference Of Parties COP held in December 2010 in Cancun, produced deinitions related to categorization of NAMAs Nationally Appropriate Mitigation Actions, namely: • Unilateral NAMAs Nationally Appropriate Mitigation Actions Supported by Domestic Financial Sources: Mitigation actions carried out by a developing country independently to reach a particular GHG emission reduction level without any international support other countries based on UNFCCC framework UNFCCC. The inancing of this type of NAMAs comes from domestic inancial sources and focuses on cost saving and implementation of mitigation measures with low cost for per ton of carbon, especially for actions that speciically target ‘no regret’ option or have negative cost. Indonesia already announced Unilateral NAMAs in 2009 by targeting national GHG emission reduction by 26 from BAU scenario in 2020. • Supported NAMAs Nationally Appropriate Mitigation Actions that receives international support: 4 Explanation on MRV is in Chapter 6 of Guideline for Implementing GHG Emission Reduction Action Plan Guideline for Implementing Green House Gas Emission Reduction Action Plan 15 A developing country’s mitigation actions with direct support from developed countries as mitigation actions supported internationally based on UNFCCC framework. Supported NAMAs consist of mitigation action options that require medium to high cost. However, results of the emission reduction action cannot be traded in carbon market with other countries to meet their commitment. In Indonesia, the action refers to national GHG emission reduction target range by 26 to 41 from Business As Usual BAU scenario. • Credited NAMAs Nationally Appropriate Mitigation Actions that Produce Carbon Credit: A developing country’s mitigation actions that produce carbon credit for trading in carbon market which will be used as compensation offset for GHG emission reduction in developed countries. Several examples of Credited NAMAs are, Clean Development Mechanism CDM, voluntary carbon market project, bilateral offset mechanism BOM or other activities that produce carbon credit. In general, NAMAs that produce carbon credit are expected to be concentrated on mitigation actions that require the highest cost. All project- based activities that produce carbon offset credit cannot be used as GHG emission reduction by the Government of Indonesia. Based on the negotiation results in Caucun’s COP 16 in Mexico, it is stipulated in paragraph 53 to develop a Registry that records NAMAs which seek international support and facilitate between developing countries and developed countries in getting proper inancial support, technologies, and capacity building for mitigation actions to be done. UNFCCC Secretariat will record and renew information on NAMAs to seek available international support from developed countries and support made available for NAMAs. Guideline for Implementing Green House Gas Emission Reduction Action Plan 16

3. RAN-GRK DEVELOPMENT TOWARDS NATIONALLY APPROPRIATE MITIGATION

ACTIONS NAMAs NAMAs is a term referring to a series of policies and actions taken by a country as part of its commitment to reducing GHG emission, in which each country can take different actions at the national level based on justice and according to the common but differentiated responsibilities as well as according to their respective capacities. Furthermore, NAMAs also emphasize inancial support from developed countries to developing countries to reduce GHH emission. Development of NAMAs becomes very instrumental for the RAN-GRK implementation, namely: - NAMAs are intended to be documents that provid important tools, methodologies and approaches in order that RAN-GRK can work; - NAMAs are expected to be able to help Indonesia to secure and use international fund sources, for instance Green Climate Fund GCF and others; - NAMAs enable Indonesia to get recognition from UNFCCC for mitigation initiatives as outlined in RAN-GRK. In the Cancun international conference on climate change in Mexico, in December 2010, developed and developing countries set up strong reporting requirements. At present, state parties are conducting further developments. It should be noted that elements such as reliable measurement, measurement, reporting and verifying system Measurable, Reportable, and VeriiableMRV are the key elements of an effective international GHG mitigation framework. For the establishment of NAMAs, the sectors mentioned in Perpres No. 61 Year 2011 on RAN-GRK are grouped according to international classiication UNFCCC. The sectors for NAMAs establishment are: 1. The land-based sectors Forestry and Peatland, Agriculture 2. The Energy sector a. Power Sector b. Transport Sector c. Industry Sector beside energy, on the sector emission made from the industry sector is discussed 3. The Waste Management sector Guideline for Implementing Green House Gas Emission Reduction Action Plan 17

3.1 NAMAs – Conceptual Measures

The establishment of a clear framework for NAMAs is a key to consistency in describing performance across several ministries, related sectors and sub- sectors. Additionally, it is helps to avoid differences occurring in the various agenciesinstitutions. Therefore, government and related stakeholders should understand the NAMA framework clearly. Therefore, the government will evaluate and identify how the designed framework, policies and measures of NAMAs can reach national emission reduction targets, as well as impacts and risks related to the country’s environment, economy, political structure and population. Not only that, the analysis will include long-term emission plan analysis supported by reliable data. Policy makers should also evaluate related governmental structure at the national, local and sectoral levels. Proposed nationally-integrated process for NAMAs establishment consists of several steps, as described in Picture 4. Figure 4. NAMAs Measures. Establishment of Aggregated Business as Usual Baseline of Each Sectors Establishment of Potential Mitigation Actions of Each Sectors Establishment of Aggregated Business as Usual Baseline and Aggregated Mitigation Actions Establishment of NAMAs and National Long-Term CO 2 Emission Reduction Paths Calculate Carbon Budget for Each Sectors Propose Required Policies, Measures and Instruments

3.1.1 BAU Baseline

5 Scenario Understanding of the baseline scenario is very important in developing NAMAs. The Baseline scenario is a reference line for measureable indicators 5 Baseline in Bahasa Indonesia is called ‘garis dasar’