Synchronising Ministry of Agriculture Target with Emission Mitigation Action Target: Case Study of Indonesia Towards 2030

Abstract

The Indonesian government has constructed some emission mitigation schemes, one of which is the Nationally Determined Contributions (NDC) scheme for the post-2020 emission reduction scheme. This research has tried to examine the impact of those emission reduction schemes on Indonesian economics and how they can synchronise with the Indonesian Ministry of Agriculture target to boost agricultural production towards 2030. Using the Computer General Equilibrium (CGE), we tried to construct a mathematical model with which to calculate the impact of emission mitigation actions from agricultural land management. The result shows that every investment in emission mitigation actions can help to reduce the Gross Domestic Product (GDP) loss on some level in comparison to if Indonesia carried out emission reduction without implementing any mitigation actions. It is assessed that Indonesia will experience approximately a 6.92 % (260.8 billion USD) GDP loss in 2030 through cutting emissions by 29 %. The introduction of mitigation technology will reduce this. Comparing all scenarios in the model, the GDP loss under INDC2 (implementing comprehensive mitigation technology in agricultural sectors) in 2030 is 2.98 % (260.7 billion USD). One of the most interesting results is that we found no significant impact of climate policies on the economy until 2020. This is probably because even though Indonesia has already published the regulation on emission reduction, the implementation of the policies effectively started in 2015. Climate-related policy and investment are usually big and timely projects, so the simulation predicted that the impact could be seen after 2020. This finding can be a signal for Indonesia in boosting investment in emission mitigation technologies. It will otherwise lead to two probabilities: the emission reduction target cannot be met or the investment that should be made will be very costly and pose a big burden on Indonesian economics due to the very limited period.