Wealth Accounting and the Valuation of Ecosystem Services www.wavespartnership.org

WAVES Indonesia

Buyung Airlangga BPS-Statistics Indonesia

The Hague, Netherlands 22-23 November 2016

Plan to Use Natural Capital Account in Policy

(1) poverty reduction - aim is to make people's lives better using less resources and causing less pollution

(2) more efficient agriculture (food, water and energy)

(3) green growth with less energy use and less CO2 pollution

Na#onalVisions

Policypriori#esandpolicytoolsPo

licypriori*e

s

Goal12SDGsonensuresustainableproduc#onandconsump#onrelatestoNawaCita7:Promo*ngeconomicindependencebydevelopingstrategicsectors,expandingtheirriga*onnetwork,opening1millionhectaresofricepaddiesoutsideJava,endingtheconversionofagriculturalland,cu>ngenergyimportsbypromo*ngexplora*onathome,construc*ngmoregaspipelines,priori*singtheuseofcoalandgastofuelelectricity

Policytools 1.Governmentregula#ononEconomicInstrumentsforEnvironmentalProtec#onandManagement.

(Source:Law32/2009regardingEnvironmentalProtec*onandManagement)

2.InLawNo.12/2015onaccountabilityofNa#onalBudgetImplementa#on2014,HouseofRepresenta#ves(DPR)askedtheGovernmenttotakestructuredprogramsinnaturalresourcespresenta#oninordertoimprovepublicfinancemanagement.

Policytools:MinistryofEnvironmentandForestry(1)Governmentregula#ononEconomicInstrumentsforEnvironmentalProtec#onandManagementcoverage:

1. Guaranteefundsofenvironmentalrestora#on

2. Applica#onofenvironmentaltax,levyandsubsidy

3. Performanceapprecia#onsysteminenvironmentalprotec#onandmanagement

Policytools:MinistryofFinance(2)

1.   InLawNo.12/2015onaccountabilityofNa#onalBudgetImplementa#on2014,HouseofRepresenta#ves(DPR)askedtheGovernmenttotakestructuredprogramsinnaturalresourcespresenta#oninordertoimprovepublicfinancemanagement.

2.   Thenaturalresourcesaccountsaregoingtobeusedasinputfornaturalresourcespoten#alandriskanalyses.Thisanalysiswillbeusedtopreparethestatebudgets.

3.   Theaccountshavenotbeenusedinmodellingoranaly#caltoolsyet,butinthefuture,itwillbe.

4.   MinistryofFinancehasproducedsomeregula#onsrelatedtovalua#onofnaturalresources.In2016,MoFalsohasconductedpilotprojectonmineralvalua#on(#n)andhostedFGDrelatedtonaturalresourcesaccountsandnaturalresourcesfiscalanalysis.

Communica#onisconductedbymee#ngwithstakeholders(highlevelmee#ng).

Challenges

Thechallengesare:•  decisionmakersfeelunsureonimpactinusingtheNCAaccounts

•  localgovernmentsandcorpora#on,asdataproviders,don’tgivethe“real”naturalresourcesdata

•  stateincomefromnaturalresourcesexploita#oncouldlessenastheextractors’scommitmentofenvironmentalconserva#on.

Opportuni#es •  In2014BPSconductedstudytoiden#fydataneededinsupportforSDGsindicators.Thestudyfoundthatfrom109mainindicatorsand111supplementindicatorsonly73mainindicatorsand62supplementindicatorsareavailable.ThereareseveralSDGsenvironmentrelatedindicatorsthatcanbederivedfromNCAbasedaccounts.

TheAccountscanbeusedbydecisionmakerstodetermine:

•  theexploita#onofnaturalresourcesthatcausetheleastimpactonenvironment.

•  stateincomefromnaturalresourcesindustries

•  stateexpenditureforenvironment

Conclusion • BPS-Sta#s#csIndonesiahasbeenproducingassetaccountsforselectednaturalresourcessince1997.

NCAapplica#ononpolicytools:

• LawNo.12/2015onaccountability,naturalresourceswillbepresentedinGovernmentFinancialSta#s#cs(GFS)aspartofna#onalwealthinordertoimprovepublicfinancemanagement.

• Governmentregula#ononEconomicInstrumentsforEnvironmentalProtec#onandManagement(RPPIELH)asderivedfromLawNo.32/2009willincludenaturalresourcesaccoun#ngandGDPadjusteddeple#ononnaturalresources.

WAVES © 2016

For more information, go to: www.wavespartnership.org Terima Kasih (Thank You)

Contributors:

Medrilzam (Ministry of Planning/Bappenas)

Purnama Sianturi (Ministry of Finance/DG National Wealth)

Rahayu Riana (Ministry of Environment and Forestry)

Nissa Cita Adinia (Communication Consultant, Waves Indonesia)