Remarks from Sri Mulyani Indrawati, Indonesia's Finance Minister

Summary

The global economy faces challenges from the pandemic and rising geopolitical tensions, particularly the war in Ukraine, which has intensified the energy crisis and food prices. Finance ministers are called to embrace a transformative approach to achieve green, resilient, and sustainable growth. Carbon pricing is highlighted as a critical tool for shifting economic behavior towards low-carbon solutions, with Indonesia leading by implementing a carbon tax and trading system. The need for international collaboration is emphasized, as climate change is a global issue that requires joint efforts to ensure a just transition and effective climate action.

Takeaways

• 😀 The global economy is still recovering from the pandemic while facing new risks, such as geopolitical tensions like the war in Ukraine.
• 🌍 The war in Ukraine has led to critical challenges, including an energy crisis and rising food prices, impacting humanity as a whole.
• 🌱 Addressing climate change is a primary concern, requiring a collective commitment beyond business as usual.
• 💡 Fiscal policy is crucial in promoting green, resilient, inclusive, and sustainable growth amid current high energy prices.
• 💰 Carbon pricing and carbon markets are vital tools to shift economic behavior toward low-carbon activities.
• 🇮🇩 Indonesia has introduced a carbon pricing framework through Presidential Regulation No. 98 of 2021 to regulate carbon pricing and market mechanisms.
• ⏳ Implementation of carbon tax and trading will initially target the energy sector, with plans to extend to other sectors by 2025.
• 🔄 A just and affordable transition mechanism is necessary to support the implementation of carbon pricing without harming economic recovery.
• 🤝 Collaboration among nations is essential to address climate change, as it cannot be solved by any single country alone.
• 🌟 A united coalition of finance ministers is needed to effectively implement climate policies and ensure equitable progress across jurisdictions.

Q & A

What are the current challenges facing the global economy?

The global economy is struggling to recover from the pandemic while also facing geopolitical tensions, particularly the war in Ukraine, which has led to an energy crisis and rising food prices.

How does the speaker propose to address climate change?

The speaker suggests a collective commitment to tackle climate change through promoting green, resilient, inclusive, and sustainable growth, emphasizing collaboration among finance ministers.

What role does carbon pricing play in climate change mitigation?

Carbon pricing is viewed as a powerful tool to shift economic behaviors towards low-carbon activities and is essential for establishing carbon markets and implementing carbon taxes.

What specific regulations has Indonesia implemented regarding carbon pricing?

Indonesia has introduced carbon pricing through Presidential Regulation No. 98/2021, which establishes a framework for the economic value of carbon and prepares for a carbon tax and trading mechanism.

When is Indonesia planning to implement the carbon tax?

The implementation of the carbon tax is scheduled to begin in 2025, initially focusing on the energy sector.

How can a carbon tax support technological innovation?

A carbon tax can provide financial incentives for companies to develop and invest in innovative, low-carbon technologies and environmentally friendly practices.

What is the significance of international cooperation in carbon markets?

International cooperation is crucial as carbon markets are borderless, requiring alignment of policies and collective action to effectively address climate change on a global scale.

What are the main goals of the coalition of finance ministers for climate action?

The coalition aims to explore various options for implementing carbon pricing and address the challenges of transitioning to sustainable economic practices.

What does the speaker mean by a 'just and affordable' transition mechanism?

A 'just and affordable' transition mechanism refers to designing a framework that ensures fair and accessible implementation of carbon pricing, considering the varying capacities of different countries.

Why is collaboration emphasized as essential for tackling climate change?

Collaboration is essential because climate change is a global issue that cannot be solved by any single country. Working together allows for sharing resources, knowledge, and strategies to effectively combat this challenge.