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Sri Mulyani: Multilateral approach is important in climate change

Coalition plays an important and real role because it facilitates communication, sharing of experiences between members is included in this meeting

Jakarta (ANTARA) – Finance Minister Sri Mulyani, at the World Finance Ministers Coalition Meeting for Climate Action in Washington, USA, Tuesday (12/10/2021), assessed that a multilateral approach is very important so that the efforts of all countries related to climate change can be united.

The union will be able to send a strong message about the importance of mainstreaming the climate into economic and financial policies, and designing a green transition that is fair and affordable for every country.

“The coalition plays an important and real role because it facilitates communication, sharing of experiences between members is included in this meeting,” Sri Mulyani said in her official statement received in Jakarta, Wednesday.

According to him, the Coalition of Ministers of Finance recognizes the importance of meaningful climate action and the need for systemic changes in economic and financial policies, given that climate change is a threat to humanity.

Mainstreaming climate change into policies will save the world and promote better and quality growth, so the Ministry of Finance has an important role as it has the instruments to combat climate change and facilitate a fair and affordable green transition.

He continued that policies to support equitable and affordable transitions are essential for climate action to have a real impact on sustainable, growth, financial and fiscal stability, increase employment and reduce inequality.

“For developing countries, this transition can encourage successful development,” said Sri Mulyani.

The former Managing Director of the World Bank said that this perspective was reflected in the work program carried out by each member country of the Coalition of Ministers of Finance which refers to the six principles of Helsinki which are the principles of the coalition, namely aligning policies with the Paris agreement, sharing experiences and expertise, and promoting the value of the carbon economy. .

Then, mainstreaming climate with economic policies, mobilizing climate finance, and being involved in the implementation of the Nationally Determined Contribution (NDC).

However, Sri Mulyani said there are still challenges in achieving sustainable finance in the world, because currently there are only a third of the 185 sustainable finance initiatives that use an accountable methodology, so that real climate impact compliance cannot be measured accurately.

For this reason, cooperation and multilateral approaches are needed so that every effort to deal with climate change in the world can be optimal, especially capacity strengthening such as measurement tools, methodologies and accountability requires collective efforts so that the efforts that have been made have a greater impact.

According to Sri Mulyani, another effort made in climate management is the implementation of a carbon tax, where currently there are 64 carbon pricing instruments that have been running and three are scheduled to be implemented.

In Indonesia, the government has just enacted the Law on the Harmonization of Tax Regulations (HPP), one of which introduces a carbon tax, so the implementation of the carbon tax strengthens Indonesia’s position as one of the few countries that have a carbon tax scheme in the world.

In addition to the carbon tax, other efforts that have been made by the Government of Indonesia in carrying out the green transition are providing tax incentives for the renewable energy sector, subsidies for the energy and transportation sectors that are more environmentally friendly, and budget allocation.

During the meeting, coalition member countries also ratified the Joint Ministerial Statement and 2021 Annual Report, in which the ministers hoped that coalition members could work with institutional partners and stakeholders to better understand the technical and political challenges in implementing the Helsinki principles. The ministers of finance will also contribute to COP26 in November 2021.

In addition to holding discussions, the coalition also welcomed five new member countries namely, Estonia, Hungary, Peru, Slovakia, and Ukraine which have joined the coalition since the Ministerial Meeting in April 2021.

Currently, there are 65 coalition member countries representing geographic areas with different levels of economic development. Collectively, coalition member countries accounted for 39 percent of global greenhouse gas emissions and 63 percent of global GDP in 2018.

Reporter: Agatha Olivia Victoria
Editor: Click Dewanto
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