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be integrated in different sectors and not be instituted to sacrifice the achievement of long-term social welfare.
In the fiscal sector, for instance, even though the impact of fiscal operations is expected to mitigate the adverse effects of climate change, these policies have to be
supported by a firm strategy to promote fiscal sustainability. Meanwhile, in other sectors, such as banking and monetary, the spirit to support the environment has to
remain in line with steps to support a solid and robust economy. Most importantly is that there should be consensus among all nations that climate change is a global issue,
so that it must be overcome through global management.
4.1. Global policy perspectives
From a global perspective, there are at least two existing issues to be resolved as a priority; how to minimize the effects of soaring international commodity prices and
how to mitigate the impacts on particular groups; as well as how to promote environmentally friendly economic policies at both the macroeconomic and
microeconomic levels. Therefore, climate change requires global understanding and cooperation. Adaptation and mitigation to climate change should become a critical
aspect to shield the poor from its adverse impacts. The financial costs for a developing country to roll out adaptation and mitigation programs for climate change could be
extremely expensive; something developing countries are not in a position to afford. Collective international action may be seen as key to support these efforts across
countries. But how far can they go? To answer this question, we may consider two salient global actions to mitigate climate change, namely the Kyoto Protocol and Bali
Action Plan. According to the Kyoto Protocol, which was adopted in December 1997 and ratified in February 2005, developed countries must reduce their carbon dioxide
and other greenhouse gas emissions referred to collectively in this paper as CO2 emissions by specified amounts by target dates. One hundred and thirty-seven 137
developing countries have ratified the protocol, including Brazil, China and India, but have no obligation beyond monitoring and reporting emissions. The United States has
not ratified the treaty. Among various experts, scientists, and critics, there is debate about the usefulness of the protocol, and there have been cost-benefit studies
performed on its usefulness. After the 2007 United Nations Climate Change Conference on the island of Bali
in Indonesia in December, 2007, the participating nations adopted the Bali Roadmap
as a two-year process to finalize a binding agreement in 2009 in Denmark. The conference produced a document called the Bali Action Plan which states that sharp
cuts in global emissions will be required to achieve the ultimate objective of the
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Convention and emphasizing the urgency to address climate change as indicated in the Fourth Assessment Report of the Intergovernmental Panel on Climate Change
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. It seems that there is still a winding road ahead. According to OECD
Environmental Outlook to 2030 2008, there are several obstacles preventing international policy and actions to mitigation climate change as follows: i Fears of
adverse impacts on industrial competitiveness. Resistance from affected sectors often challenges the political feasibility of introducing environmental boundaries such as
emission standards, targets and green taxes. Many countries face the same hesitation to move toward a low-carbon economy due to the infant technologies of cleaner fuel; ii
Uncertainty surrounding who should take action and who should bear the costs of action; and iii Under pricing of natural resource use and pollution. It is difficult,
practically, to accurately calculate the full costs of environmental, health, and productivity damage caused by economic activities. The concept of compensating
polluting activities into prices will be distorted by the fact that in most countries the use of scarce natural resources remains under-priced or even subsidized. From the three
obstacles mentioned, the central issue is the cost calculation and fair burden sharing for every country in adaptation and climate change mitigation. How large is the cost
estimation and how the burden sharing should be implemented remains a hotly debated topic.
4.2. Indonesian Perspectives
