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SWITCH ASIA – Mapping the State of SCP Policies and Tools in
SWITCH ASIA – Mapping the State of SCP Policies and Tools in Indonesia i The Sustainable Consumption and Production (SCP) Policy Project – Indonesia Copyright © 2013. March Ministry of Environment Assistant Deputy Standardization Technology Submitted by: Sri Handayani | Karin Merle | Bjorn Bauer Funded by: The European Commission; The Switch-Asia Programme www.switch-asia.eu Operated by: Delegation of the European Union to Indonesia, Brunei Darussalam and ASEAN http://eeas.europa.eu/delegations/Indonesia Hosted by: Kementerian Lingkungan Hidup (Ministry of Environment) www.menlh.go.id Technical assistance provide by: GFA Consulting Group, Germany AMC (Asian Management Consulting), Indonesia YLKI (Yayasan Lembaga Konsumen), Indonesia Abbreviations AKSINDO Asosiasi Kontraktor Konstruksi Indonesia (Association of Indonesia Construction Contractor) AMDAL Analisis Mengenai Dampak Lingkungan (Environmental Impact Assessment) APEC Asia-Pacific Economic Cooperation APEM Association of Professional Energy Managers APO Asian Productivity Organization APRSCP Asia Pacific Roundtable for Sustainable Consumption and Production ASATHI Asosiasi Ahli Teknik Hotel Seluruh Indonesia (Association of Experts Engineering Hotel Indonesia) ASEAN Association of Southeast Asian Nations BAPPEDA Badan Perencana Pembangunan Daerah (Regional Body for Planning and Development) BAPPENAS Badan Perencana Pembangunan Nasional (National Body for Planning and Development) B2B Business to business B2C Business to consumer BCA Bank Central Asia BI Bank Indonesia BLH Badan Lingkungan Hidup (Environmental Bureau) BNI Bank Nasional Indonesia BPPT Badan Pengkajian dan Penerapan Teknologi (the Assessment and Application of Technology Agency) BPS Badan Pusat Statistik (Statistic Bureau) CFL Compact Flourescent Light CMEA Coordinating Minister of Economic Affairs CMSW Coordinating Minister of Social Welfare CSO Civil Society Organization CSR Corporate Social Responsibility DAK Dana Alokasi Khusus (Special Allocation Fund) DANIDA Danish International Development Agency DASTA Designated Areas for Sustainable Tourism Administration DIY Daerah Istimewa Yogyakarta (Special Region of Yogyakarta) DKI Daerah Khusus Ibukota (Special Capital Region) DNPI Dewan Nasional Perubahan Iklim (National Council on Climate Change) EMS Environmental Management System EPR Extended Producer Responsibility EQMP Environmental Quality Management Plan ESC Enviromentally Sustainable Cities ESDM Energi dan Sumber Daya Mineral (Ministry of Energy and Mineral Resources) EU European Union GAPENSI Gabungan Pelaksana Konstruksi Nasional Indonesia (Association of implementing National Construction Indonesia) GBC Green Building Council GCDP Global Community Development Program GDP Gross Domestic Product G2B Government to Business G2G Government to Government Gelatik Gerakan Berkelanjutan Anti-Sampah Plastik (Movement of Sustainable Anti-Plastic Waste Movement) GHG Greenhouse Gas GIZ German Agency for International Cooperation GOI Government of Indonesia GPN-J Green Purchasing Network of Japan GPP Global Poverty Project GRI Global Reporting Initiative IBCSD Indonesia Business Council for Sustainable Development IEPC Industrial Efficiency and Pollution Control IFC International Finance Corporation IGIF Indonesia Green Investment Fund ILO International Labour Organization INPRES Instruksi Presiden (Instruction of President) ISO International Organization for Standardization ITB Institut Teknologi Bandung (Institution of Technology Bandung) JAIF Japan-ASEAN Integration Fund JBIC Japan Bank for International Cooperation JICA Japan International Cooperation Agency KADIN Indonesia Chamber of Commerce and Industry KAN National Accreditation Agency KP3EI Komite Percepatan dan Perluasan Pembangunan Ekonomi Indonesia (Acceleration and Expansion of Indonesia's Economic Development Committee) LEI Lembaga Ekolabel Indonesia (Ecolabel Indonesia Agency) LG Local Government LKPP Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah (Procurement of Goods / Services Agency) MCC Millennium Challenge Corporation MEMR Ministry of Energy and Mineral Resources MoA Ministry of Agriculture MOE Ministry of Environment MoEC Ministry of Education and Culture MoF Ministry of Finance MoFor Ministry of Forestry MOHA Ministry of Home Affairs MoI Ministry of Industry MoMAF Ministry of Maritime Affairs and Fisheries MoPW Ministry of Public Works MoTCE Ministry of Tourism and Creative Economic MOTr Ministry of Transportation MPI Masyarakat Pariwisata Indonesia (Tourist Club) MP3EI Masterplan Percepatan dan Perluasan Pembangunan Ekonomi (long-term Economic Master Plan) MUSRENBANG Musyawarah Perencanaan Pembangunan (Congress Planning) NAP National Action Plan NESDP National Economic and Social Development Plan NGO Non Government Organization NIP National Industrial Policy OHS Occupational Health and Safety ONEP Office of National Environmental Board P2B Penataan dan Pengawasan Bangunan (City Construction Supervision and Regulation Agency) PDAM Water Service PERDA Peraturan Daerah (Regional Regulation) PERPRES Peraturan Presiden (President Regulation) PERWALI Peraturan Walikota (Mayor Regulation) PHRI BPP Perhimpunan Hotel & Restoran Indonesia - Badan Pimpinan Pusat (Central Executive Board of the Association of Indonesian Hotels and Restaurants) PLN Perusahaan Listrik Negara (State Energy Agency) PROPER Program for Pollution Control, Evaluation, and Rating RAN/RAD Rencana Aksi Nasional/Rencana Aksi Daerah (National Action Plan/Regional Action Plan) RIKEN Rencana Induk Konservasi Energi Nasional (National Energy Conservation Plan) RKAS Rencana Kerja dan Anggaran Sekolah (School Budgeting and Action Plan) RIPARNAS Rencana Induk Kepariwisataan Nasional (National Long-term Tourism Plan) RIPARDA Rencana Induk Kepariwisataan Daerah (Regional Long-term Tourism Plan) RPJMN Rencana Pembangunan Jangka Menengah Nasional (National Medium-term Development Plan) RPJPN Rencana Pembangunan Jangka Panjang Nasional (National Long-term Development Plan SCP Sustainable Consumption Production SKPD Satuan Kerja Pemerintah Daerah (Local Government Unit of Work) SME Small Medium Enterprises SOEs State Owned Companies SPP Sustainable Public Procurement UGM University of Gadjah Mada UI University of Indonesia UKP4 Unit Kerja Presiden Bidang Pengawasan dan Pengendalian Pembangunan (Presidential Working Unit for Supervision and Control of Development) UNDIP University of Diponegoro UNEP United Nations Environment Programme UNFCC United Nations Framework Convention on Climate Change UNIDO United Nations Industrial Development Organization UOB United Overseas Bank WTO World Trade Organization WWF World Wildlife Fund YIPD Yayasan Inovatif Pemerintah Daerah (Local Government Inovative Foundation) YLKI Yayasan Lembaga Konsumen Indonesia (Indonesian Consumers Foundation) YPB Yayasan Pembangunan Berkelanjutan (Sustainable Development Foundation) Content Abbreviations .......................................................................................................................................... ii Executive Summary ................................................................................................................................ 1 Introduction to the Study: SCP in Indonesia ........................................................................................... 2 a. Indonesia and SCP ............................................................................................................... 2 b. SWITCH ASIA Policy Support and purpose of the Baseline Study ...................................... 2 Methodology and Approach of the Baseline Study ................................................................................. 4 I. II. III. IV. a. Scope and Limitations ........................................................................................................... 4 b. Methodological Approach...................................................................................................... 6 SCP Policies in Indonesia ............................................................................................................... 7 1.1 SCP in Macro-economic / Development Policies.................................................................. 7 1.2 SCP in Sector Policies .......................................................................................................... 8 SCP Policy instruments in Indonesia ............................................................................................ 12 2.1 Instruments Targeting Manufacturing Industry ................................................................... 12 2.2 Instruments Targeting Tourism Industry ............................................................................. 14 2.3 Instruments Targeting Resource Efficiency in Buildings ..................................................... 17 2.4 Cross-cutting Instruments ................................................................................................... 18 SCP in Indonesia – Success Stories ............................................................................................ 23 3.1 Negotiations of joint targets through facilitation by RAN-GRK Secretariat ......................... 23 3.2 Negotiations of joint targets through Joint Secretariat Kartamantul.................................... 23 3.3 Waste Management in Surabaya ........................................................................................ 24 Stakeholder Mapping .................................................................................................................... 25 4.1. Stakeholders for sustainable consumption ......................................................................... 27 4.1.1 Consumers and users .............................................................................................. 27 4.1.2 Stakeholders framing sustainable consumption and use ........................................ 27 4.2. Stakeholders for sustainable production ............................................................................. 28 4.2.1 Producers................................................................................................................. 28 4.2.2 Stakeholders framing sustainable production.......................................................... 28 4.2.3 International organisations and donors ................................................................... 28 4.2.4 Government agencies .............................................................................................. 29 4.2.1 Non-Government actors .......................................................................................... 31 V. International SCP Schemes ....................................................................................................... 33 5.1. Institutional set up ............................................................................................................ 33 5.2. SCP policies....................................................................................................................... 33 5.3. Instruments for SCP ......................................................................................................... 34 5.3.1 Regulatory instruments ........................................................................................ 34 5.3.2 Economic instruments .......................................................................................... 35 5.3.3 Voluntary instruments ........................................................................................... 35 5.3.4 Informative instruments ........................................................................................ 35 5.4. The Thai SCP scheme ....................................................................................................... 36 5.4.1 Thai SCP-related policies ...................................................................................... 36 5.4.2 GPP and eco-labelling in Thailand ....................................................................... 39 5.4.3 Sustainable tourism in Thailand .......................................................................... 40 5.5. SCP policy in Brazil .......................................................................................................... 41 5.6. Japan Green Purchasing Network .................................................................................. 41 5.7. Chilean GPP approach ..................................................................................................... 42 5.8. Green Growth Road Map in Cambodia ........................................................................... 42 5.9. National Programme on SCP in Mauritius ...................................................................... 42 5.10. SCP policy in Columbia .................................................................................................... 43 VI. Proposals inspired by the study and the stakeholders .......................................................... 45 6.1. Coordinated policies and strategies ............................................................................... 45 6.2 Sustainable Production .................................................................................................... 47 Annex 1: Definition of SCP and Demarcation from other Concepts ........................................ 48 Annex 2: List of Stakeholders Visited ....................................................................................... 55 Annex 3: Information about PROPER Indicators and Rating Scheme .................................... 59 Executive Summary Indonesia has been selected as one among four countries for policy support under the SWITCH ASIA Programme as the GOI has shown a strong commitment and progress in developing SCP relevant policies compared to other countries in Asia. Indonesia has a long record in sustainable development policy, actually making reference already in the Constitution of 1945. The nation has shown a high awareness regarding vulnerability vis a vis climate change and at the same time its economy’s contribution to GHG emissions as accelerator of global climate change. Indonesia has been leading by example at international level, setting voluntary GHG reduction targets and advocating for sustainable development. The GOI is committed to promote and enhance sustainable consumption and production patterns in Indonesia i.e. decoupling economic progress from resource use, decreasing resource intensity, avoiding negative impact on the environment. Doing so, the GOI’s objective is an accumulated consumption behaviour which is environmental friendly, namely consume within the carrying capacity of the planet/better quality and pro poor – in the meaning of consuming sufficient/better quality. While the term “SCP policy” in principle includes policies by government and also policies by private sector e.g. international standards that are pioneering or go beyond governmental policy. In this Study the focus will be laid on government policy. As a result of decentralization, the local (district/municipality) level has been given substantial autonomy in raising taxes and issuing other policy instruments. This is a chance for local drivers and that is why the study looks at central level initiatives but also includes several provinces and municipalities when reviewing the status quo. First, the study compiles and maps at the existing general “vision” in line with the sustainable development philosophy and SCP in particular. Secondly, an overview is given on the corresponding institutional framework: SCP is complex in nature, so every institution at all levels - operating nation-wide and/or at sub-national level - is a potential stakeholder for policy development, planning, implementation, monitoring. This effectively means: co-responsibility of different stakeholders. Key stakeholders vary according to the respective subject under discussion and at the same time can be target groups of other SCPrelevant policy instruments. Exemplarily, different perspectives are being discussed, such as: (1) macroeconomic development policy, (2) SCP in industry, (3) SCP in tourism sector, (4) resource efficiency in buildings. Thirdly, the mix of policy instruments in place and in the pipeline that is aiming at applying resource and impact decoupling are being presented. The study strives at showing which are the policy instruments in place, indicating which already implemented or not. SCP being a very wide-ranging subject, there is a limited range of what can be mapped with the means of a study report. Success stories and driving forces for Indonesia’s SCP agenda have been identified. Proposals on how to address potential for improvement are mentioned in Chapter VI, and potential areas for support by the Project have been identified (incl. potential needs for capacity strengthening and the examination of potential synergies from strengthened inter-relationships). 1 Introduction to the Study: SCP1 in Indonesia In this Chapter, the SCP Baseline Study under EU SWITCH ASIA is framed into Indonesia’s long standing commitment to a sustainable development. a. Indonesia and SCP Building on the achievements of the Earth Summit, the United Nations Conference on Sustainable Development (Rio+20) last year adopted the 10-Year Framework of Programmes on Sustainable Consumption and Production (10YFP) which calls all signing nations to fulfil the increased demand for goods and services while minimizing the use of natural resources, toxic materials and emissions of waste and pollutants over the life cycle. Indonesia has a long record in sustainable development policy, actually making reference already in the Constitution of 1945. Being highly aware on the potential risks and vulnerability that climate change carries for Indonesia and in particular its poor, and at the same time acknowledging the economy’s contribution to climate change GHG emissions, Indonesia has been leading by example at international level, setting voluntary GHG reduction targets and advocating for sustainable development. Indonesia realizes the importance of sustainable development in the effort to alleviate poverty, enhance the quality of life, and ensure that the economic, environmental and social goals of the nation are integrally linked. • • Sustainable Consumption addresses the demand side, focusing on consumers’ behaviour and choices in use of goods and services, i.e. demand for products that are environmentally friendly, as well as by promoting a sensible consumption behaviour, avoiding spillage and waste. Sustainable Production concerns the supply side, focusing on the economic, social and environmental impacts of production processes. The GOI is committed to promote and enhance sustainable consumption and production patterns in Indonesia i.e. decoupling economic progress from resource use, decreasing resource intensity, avoiding negative impact on the environment. Doing so, the GOI’s objective is an accumulated consumption behaviour which is environmental friendly, namely consume within the carrying capacity of the planet/better quality and pro poor – in the meaning of consuming sufficient/better quality. b. SWITCH ASIA Policy Support and purpose of the Baseline Study EU-funding for commerce and sustainability initiatives in Asia has been in existence for more than 15 years by now through the SWITCH Asia Programme (launched in 2007) and its precursor programmes (e.g. Asia Pro-Eco, launched in 2002, and Asia-Invest, commenced in 1997). The SWITCH Asia Programme is being implemented through three types of support: Grant projects, the Network Facility, and regional and national Policy Support Components. Indonesia has been selected as one of the most advanced Asian countries in terms of SCP policies uptake and implementation. Other countries to which the EU granted national policy support are: Thailand, Malaysia and the Philippines, and the remaining Asian countries are addressed through a Regional Policy Support Component. 1 For the definition of Sustainable Consumption and Production (SCP) and other (sometimes overlapping) concepts within the green economy nexus, please refer to the Annex 1. 2 With this policy support project, Indonesia receives 1,998,000EUR funding for technical assistance over a period of three years to further strengthen the development and application of its policies, structures and action plans on sustainable consumption and production. The project covers Indonesia as a whole at central and regional levels. The Policy support Component in Indonesia has its emphasis on macro level but maintain linkages to both the micro and meso level to achieve the project specific purpose of “promoting an integrated and coordinated approach in developing and implementing the national policies on SCP”. This shall be done through 3 components, each of which a result area of its own: • • • C1: Creating the Framework for a Consolidated National SCP Policy C2: Support to SCP Policy Implementation C3: Financial mechanisms, incentives and policy instruments for SCP promotion. In the Inception Report, a range of sub-projects have been defined to operationalise project implementation. The first sub-project is the present Baseline Study “Mapping the State of SCP Policies and Tools in Indonesia” which is designed to shape the further implementation of the project. The purpose of this baseline study is to analyze and identify the status quo of the existing SCP related policy framework, its instruments and the respective institutional framework in Indonesia. This mapping of on-going policies, instruments (incl. incentives and disincentives), involved organizations and driving forces related to or linked with SCP in Indonesia might constitute the basis for the GOI to further develop a National SCP action plan including the strengthening of corresponding institutional framework for synergizing the implementation of SCP policy. The methodology, scope and limitations of the Study will be presented in Chapter of Methodology and Approach of Baseline Study. 3 Methodology and Approach of the Baseline Study This chapter gives an overview on the scope and limitations of the Baseline Study, the methodological approach it is based on and corresponding instruments used for the compilation and mapping of policies/instruments and institutional framework. a. Scope and Limitations The Sub-Project 01 of SWITCH ASIA’s Policy Support Component in Indonesia, “Mapping the State of SCP Policies and Tools in Indonesia”, provides an inventory and mapping of policies and instruments framing sustainable consumption and production (SCP). While the term “SCP policy” in principle includes policies by government and also policies by private sector e.g. international standards that are pioneering or go beyond governmental policy, in this Study the focus has been laid on government policy. Further, the Study gives an overview of the institutional framework for SCP in Indonesia’s decentralized governance scheme. This includes institutions involved in policy development, planning, implementation/ monitoring and enforcement. Driving forces for Indonesia’s SCP agenda have been identified and potential (beneficial) areas for support by the SWITCH Asia Policy Support Component are highlighted (incl. the need for capacity strengthening of selected stakeholders). The Study team acknowledges that governments worldwide do not have only one single objective to satisfy but a great facet of highly important priorities to address. Those different priorities can (and most likely will) result in a complex (and sometimes conflicting) set of objectives. Concentration was given to assessing existing policies at national and sub-national level regarding the extent to which they – either explicitly or in any other conducive way – address the key as2 pects of Sustainable Consumption and Production (SCP). At centre stage of this concept lies “decoupling” i.e. the Study looks at those policies framing resource decoupling – less resource use and pollution per unit of economic activity - and impact decoupling in Indonesia, that is aimed at reducing overall environmental impact despite overall increase in economic activity. More specifically, SCP policies are those which enable a change of behaviour of the key stakeholders, consumers and producers, to apply more sustainable consumption and production practices in order to achieve the effects as mentioned. Therefore, the Study maps three different target groups of policies: government as consumers of available goods and services, and producers of public services; industry as consumers of resources and producers of goods and services as well as civil society as consumers of goods and services. SCP covers a broad range of subjects and interlinks economic progress with environmental 3 management and social welfare. As proposed by the Technical Committee, not all subjects that are theoretically covered by the term SCP and/or stimulate SCP have been included in the Study. 2 3 SCP: "the use of services and related products which respond to basic needs and bring a better quality of life while minimizing the use of natural resources and toxic materials as well as the emissions of waste and pollutants over the life cycle of the service or product so as not to jeopardize the needs of future generations" as adopted by the "Oslo Symposium" in January 1994 as working definition of SCP. Indonesia is the world's third-largest greenhouse gas emitter, with 80 per cent of its carbon footprint attributed to the degradation of peat land and the logging of its forests. The eight sectors LULUCF, peatland, agriculture, power, transportation, petroleum and gas, cement, and buildings have been acknowledged representing the majority of Indonesia’s total emissions in: McKinsey/DNPI (2010): Indonesia’s Greenhouse Gas Abatement Cost Curve, p. 14 ff. 4 Instead exemplarily, different perspectives are being discussed, such as: (1) SCP in the Indonesian macro/development policies (2) Policies on Resource Efficiency in Buildings: construction/operation of “green buildings” (3) SCP policies in the Industry Sector (pulp and paper, electronics/household electrical equipment, furniture, plastic packaging) and (4) SCP policies in the Service Sector: Reduction of Resource Intensity in the Tourism sector. As a result of decentralization, the local (district/municipality) level has been given substantial autonomy in raising taxes and issuing other policy instruments. This is a chance for local drivers. Therefore the Study looks into different levels, besides the central level initiatives but also includes several provinces and districts/municipalities when reviewing the status quo (Special Region of Yogyakarta, Special Region of DKI, Bali Province/Badung district, East Java Province/Surabaya municipality). The island of Java and Bali are located in the most populated re4 gions in Indonesia and have already a staggering level of deficit in bio-capacity. These particular sub-national governments have been selected based on the high visibility of their achievements in the thematic example areas proposed by the Technical Steering Committee. All potential consumers and producers of an economy would be relevant for such a Study. The Study was conducted over a period of 6 months to be able to grant high flexibility to the stakeholders. Apart from the 51 stakeholders visited at national and sub-national levels, there are many other stakeholders involved in SCP, which could not be consulted at this moment in time. While the Study team acknowledges the high importance of sustainable agricultural and other primary sector (e.g. mining, forestry, fishery) practices and the high number of related policies in this area (REDD+, moratorium on deforestation, Coral Triangle Initiative (CTI), Blue Econo5 my ), in this Study, the primary sector is covered only at downstream levels, i.e. in policies and institutional frameworks that aim at driving the greening of the primary sector through the manufacturing industry or the consumer demand. While waste management with a character of recycling is part of the Study, “end of pipe solutions” are not included in the mapping, and neither is “waste disposal and incineration”, given their character of “end of pipe treatment” (which is less significant to the nature of what Sustainable Consumption and Production stands for). This study finds that there are in addition other, international and regional policies, such as ASEAN and UNFCCC, which relate to SCP. Those were excluded for the national policy baseline study, starting from the premise that those policies would be translated into national law/practice if considered relevant. Regarding considerations of future harmonization, the project can take such activities into one of the various work packages on a needs basis and given time and budget are available. 4 5 Indonesian Ministry of Public Works (2010): Ecological Footprint of Indonesia, p. 19ff. "Blue Economy" is the conservation and sustainable management of marine and coastal resources in support of sustainable development and poverty eradication. 5 b. Methodological Approach The Study team used desk study and guided stakeholder interviews to identify relevant data for 6 the mapping. The desk study consisted of: • • • Reviewing existing policy documents pertaining to SCP and actors/institutions involved Internet research on achievements and good practices, indicators etc. in the area of SCP in Indonesia and other countries including SCP success stories Reviewing existing donor funded projects in relation with SCP For the desk study, official Government documents on Indonesia’s policies (a selection of national and sub-national policies have been analyzed) and institutional framework were assessed as well as further secondary data such as study/research reports, articles, books, annual reports and websites were reviewed. Regarding the guided stakeholder interviews, a total of 51 meetings were held in ministerial divisions and agencies, as well as with non-government stakeholders (industry associations, 7 NGOs, donor agencies), all in all comprising more than 100 people and experts in their field. While some interviews were held starting September 2012. The main activity regarding the guided stakeholder interviews took place in November and December 2012 for national level interviews and visits to sub-national level: Special Province of Yogyakarta, and Bali Province. In February 2013 visits were conducted to East Java Province/Surabaya City and to the Special Region of Jakarta. The Study looks into policies and instruments as well as stakeholders addressing resource decoupling and impact decoupling in Indonesia. First, the Study compiles and maps at the existing general policy framework in line with the objectives of sustainable development and climate change mitigation and adaptation, as well as SCP in particular. Secondly, the mix of policy instruments in place and in the pipeline aiming at implementing resource decoupling and impact decoupling are presented. While the mapping of existing government policy instruments builds the core of the Study (different target groups, namely government (G2G), business (G2B), and civil society (G2C)), also other perspectives are being taken into account: B2B (business to business) and B2C (business to consumer). The Study strives at showing which are the policy instruments in place, indicating (a) which target group they address, and (b) which of the initiatives have already been implemented (or not). Thirdly, a brief overview is given on the corresponding stakeholders. Indonesia has a decentralized administration since 1999 (based on the law UU 22/1999 and its amendment UU 32/2004 on Regional Government), which implies that important functions of environmental management have been deferred to the local levels (district/city level). For the purpose of stakeholder mapping, the Study works with overview tables. SCP is complex in nature, so every institution at all levels - operating nation-wide and/or at sub-national level - is a potential stakeholder for SCP e.g. for policy development, planning, implementation, monitoring, enforcement. This effectively means: co-responsibility of different stakeholders. The Study provides a brief overview of the respective institutions in place to develop, implement and enforce SCP policies in each of the four thematic areas: (1) SCP in the Indonesian macro/development policies, (2) SCP policies in the Industry Sector, (3) SCP policies in the Service Sector: Reduction of Resource Intensity in the Tourism sector, and (4) Policies on Resource Efficiency in Buildings: construction/operation of “green buildings”. 6 7 While policies are being quoted whenever appropriate, the Study team abstained from quoting any interviewees to assure their anonymity. The full list of stakeholders consulted can be found in the Annex 2. The corresponding interview guidelines are attached in Annex 2. 6 I. SCP Policies in Indonesia The Study team investigated Indonesia’s macroeconomic development policies and plans (cross-sectoral macro policies), sector policies as well as precise instruments framing environmental improvement and green growth on existing SCP elements. 1.1 SCP in Macro-economic / Development Policies Indonesia has been emphasizing its commitment for Sustainable Development and Climate Change Mitigation and Adaptation since a long time. In fact, even if not in precise terms, already the Constitution of the Republic of Indonesia 1945 (articles 28H and 33.(4)) makes reference to sustainable development (“every citizen of Indonesia to live physical and spiritual prosperity, residence, and receive good and healthy environment and the right to obtain medical care” and “national economy is implemented based on economic democracy with the principles of solidarity, equitable efficiency, sustainability, environmentally sound, independence, and balancing economic progress and national unity”). Indonesia’s National Long-term Development Plan (RPJPN 2005-2025) strives at achieving a “green and ever-lasting Indonesia”. To support the acceleration and expansion of the Indonesian economic development, in 2011 the President released the long-term Economic Master Plan (MP3EI 2011-2025) through PERPRES 32/2011. The Study finds that it is currently being implemented but under review regarding the inclusion of sustainability considerations e.g. supporting environmental conservation or minimind zation of damage/pollution. The (current) 2 National Medium-term Development Plan (RPJMN 2009-2014) has given strategic substance to the sustainable development plan. The Second United Indonesia Cabinet launched a green economy program which aims at pro-growth, projob, and pro-poor (and which has been amplified by “pro-environment” to a 4 Track Strategy, and in some regions of Indonesia by an additional “pro-culture” e.g. in Bali Province and the 8 Special Region of Yogyakarta) . The National Action Plan addressing Climate Change (NAP, 2007) acknowledges the risk of resource scarcity in terms of space, natural resources and energy and the risk of crisis resulting 9 from such scarcity (ecological, social, economic). The 10 priority sectors of the NAP include 10 water resources, energy, processing/manufacturing, public works, and tourism. Indonesia has been showing political commitment at highest level (President) to address climate change risks. At the December 2009 Copenhagen Climate Change Summit, Indonesia declared its voluntary commitment to reducing greenhouse gas emissions or carbon intensity per unit of GDP by 2020 (Copenhagen Accord). Indonesia’s GHG (equivalent) emission reduction targets amount to 26%, and with international support up to 41% from its Business As Usual (baseline in 2005). This commitment found manifestation in the PERPRES 61/2011 on the issuance of National Plans on GHG Emission Reduction (RAN/RAD-GRK). Meanwhile 29 provinces out of 33 have completed their RAD-GRK based on participative negotiation of joint targets with multiple stakeholders (incl. several SKPDs, universities and sometimes the private sector) and have issued the document in the form of Governor’s Regulation. And the other 4 are in the process of finalizing their RAD-GRK document, and this group is currently receiving intensive attention from the RAN/RAD GRK Secretariat. 8 9 10 The introduction of the pro culture element was manifested through the regional regulations PERDA 11/2005 in DIY (article 3) and PERDA 09/2009 in Bali Province. The 10 target sectors are: a. Agriculture; b. Forestry; c. Water resource; d. Marine and Fisheries; e. Energy; f. Mining; g. Processing & Manufacture; h. Public works; i. Tourism; j. Population (quantity, quality, and mobility of distribution); in NAP, 2007, MoE. See NAP 2007, p. 34. 7 Further, the Ministry of Finance has issued Green Paper on Economic and Fiscal Policy Strategies for Climate Change Mitigation Indonesia (2009). To implement green initiatives supporting the Indonesian economy and society to transform towards a behavioural pattern of sustainable consumption and production, opportunities to finance green investments are of utmost importance. In this context, also the option of external funding is relevant and the recently 11 issued Green Banking Policy is conducive to include the financial sector/ banks by linking their risk assessment of credit applications with the applicants’ environmental impact assessment (AMDAL) and/or environmental performance (PROPER). Further, the GOI, channelled 12 through the MOF and financial sector respectively , supports energy efficiency and cleaner technology with economic incentives for manufacturing and service industries. A Study commissioned by the Ministry of Public Works in 2010 has mapped Indonesia’s Ecological Footprint for different regions with the purpose to provide basis for informed policy making for all line ministries to shape a sustainable development path, i.e. one that does not 13 compromise Indonesia’s rich natural capital. Both sustainable development and climate change mitigation and adaptation have often overlapping, sometimes congruent goals (e.g. low carbon growth, emission reduction) which is a chance for a concerted action of all actors/stakeholders. The Sustainable Consumption and Production concept, with its instruments to decouple both resource use per product but also the overall negative environmental impact from economic growth, can serve as methodology to achieve sustainable development. The SCP concept strives also at mitigating the eventual re14 bound effect that can result from unsustainable behaviour in use, maintenance and waste handling of the products and services and/or compensating consumption. 1.2 SCP in Sector Policies Transforming behavioural patterns towards green growth is mainly framed by policies precisely addressing and enabling the implementing agencies to act sustainably, i.e. the industry and service sectors themselves. In this regard, the National Industrial Policy (NIP, stipulated in 15 PERPRES 28/2008) and the Long-term Tourism Plan (RIPPARNAS 2005-2025) are at the centre of interest for this Study. The National Industry Policy (2008) puts priority at strengthening competitiveness of the manufacturing industry as a driver of economic growth. Among other aspects, the plan seeks to strengthen the industry structure by increasing the role for SMEs and improved productivity. In September 2009, Indonesia signed the Manila Declaration on Green Industry - in the framework of an international conference held in the Philippines. With this declaration, the GOI expressed the determination to establish policies and regulatory and institutional frameworks that are favourable to a shift towards resource efficient and low-carbon industries. The Declaration also encourages an intensified transfer of cleaner production technologies and promotes an increased use of renewable energy, among others. Since then, the NIP has been complemented by the Grand Strategy for Green Industry (2010) which promotes efficient and effective use 11 12 13 14 15 Stipulated in Bank Act 10/1998, CBI Regulations 7/2/PBI/2005 for general banks and 13/13/PBI/2011 for Syariah banks. Central line ministries in Indonesia are allowed to channel the economic incentives they would like to grant to different target groups either through the Ministry of Finance or commercial banks in Indonesia. The report notes that Indonesia has a wealth of bio-capacity, but in some places – particularly Java and Indonesia – high population threatens that surplus, in: Ministry of Public Works (2010): ECO-FOOTPRINT preface. The rebound effect (or take-back effect) refers to the behavioral or other systemic responses to the introduction of new technologies that increase the efficiency of resource use. These responses tend to offset the beneficial effects of the new technology or other measures taken, e.g. the savings made by using a fuel-efficient car are compensated by driving more often or longer distances, or invested in other activities which compensate or over compensate the beneficial effect. The Study addresses Tourism as example sector of the service industries. 8 of resources (energy, water, material) to minimize waste and prevent pollution. It sets precise 16 targets for energy efficiency in eight target sectors (incl. pulp and paper) and GHG emission reduction (2% by 2020) as well as the development of a Carbon Footprint labelling scheme. The Study exemplarily looks into manufacturing industries related to pulp & paper, electronics, 17 furniture and plastic packaging. To what extent sustainability can be achieved in the tourism sector highly depends on the grade of sustainability of other sectors (e.g. transport, infrastructure, production (of souvenirs), waste management, and environmental conservation) and actors (e.g. other government departments, private sectors, tourists, CSO/NGOs). The vision of the Long-term Tourism Plan has integrated the 4 Track Strategy (pro growth, pro job, pro poor, pro environment) and highlights the need for a competitive tourism sector while at the same time acting responsibly to the environment and social culture. With the same line of reasoning, Bali Province and DIY had integrated “pro culture” into their regional development strategies (see above). PERDA DIY 01/2012/ RIPPARDA 2012-2025 (article 3) advocates in favour of developing tourism destinations which are “safe, convenient, interesting, accessible and environmental friendly towards prosperity improvement” and PERDA Bali Province 02/2012 (article 3) highlights that tourism in Bali should conserve its original culture which is aiming at “conservation of the nature, environment and resources”. The Company Liability Act 40/2007 (article 74) has introduced mandatory CSR for natural resources-based companies. This opens the opportunity for funding of smart projects which could help reducing the negative impact on the environment and society. The derivative regulation of Act 40/2007 had not been enacted until October 2011, causing the Article 74 basically ineffective until that date. Progressive and proactive companies, mainly the export oriented sectors (e.g. palm oil, furniture, textile) and large consumer goods corporations (e.g. Unilever, Nestle etc.), have introduced international standards to comply with the demand of their international trade partners (environment management, OHS, energy management, or even ISO 26000 on CSR) and/or agreed to voluntary reporting initiatives GRI, IFC Performance Standards or similar. The Environmental Law 32/2009 sets the framework for environmental protection in Indonesia, and tools and guidelines are in place for most purposes. Act 32/2009 requests a systematic and integrated effort to protecting and managing the environment (preservation and reduction of damage/pollution). The GoI and local governments shall implement environmental economic instruments, including GPP, and develop an eco-label system (article 8). The Ministry of Environment’s national priority, expressed in its Key Performance Indicators, addresses the reduction of industrial emissions as a key subject: “Assure to reduce the pollution load through supervision of 680 industries and services as from 2010 onwards, reduce the peaks up to 20% 18 per year and reduce the pollution up to 50% by 2014”. At regional and local level, there are initiatives in place that are aligned with the key priority. Examples include the Bali Green and 16 17 18 The 8 target sectors are cement, iron & steel, pulp & paper, textile, petrochemical, food & beverage, ceramics & glass, and chemicals. While several studies highlight the relevance of in particular primary sector and plantation-based industries, energy-intensive industries and the transport sector as main contributors to resource efficiency in Indonesia (see exemplarily East Asia Forum (21.06.2012): “Rio+20 and challenges towards sustainable development”, in: http://www.eastasiaforum.org/2012/06/21/rio20-and-challenges-towards-sustainable-development/ (accessed 22.03.2013)), these five industrial sectors (pulp & paper, electronics, furniture and plastic packaging) were predetermined by the Steering Committee of the SWITCH ASIA PSC in Indonesia. Sustainable Transport will be supportive for SCP in Tourism and SCP in Industry. Sustainable Forestry and Sustainable Agriculture, Fisheries is addressed indirectly through e.g. Green Labeling and EMS that include sourcing from sustainably used land. MOE Strategic Plan 2010-2014. 9 Green Roadmap, the Unilever “Clean and Green” collaboration with different cities and the local 19 GHG action plans (RAD-GRK). The President Regulation 05/2006 (National Energy Policy) sets energy diversification targets for 2025 that include 5% bio-fuel, and 5% geothermal and other renewables, and energy conservation target of reducing energy intensity by 1% per year. It actually considers the internalization of external (environmental) cost (“The economic price is the cost of production per unit energy including environmental cost and margin” in Chapter 1, article 1, 9) under a safeguarding time for the poor (“in consideration of the ability of small enterprises and aid to the poor within a certain period”, Chapter 3, article 3, 2c). The National Energy Conservation Development Programme (RIKEN 2005-2025) focuses on demand side management, standardization and energy savings labelling, partnership programs, energy manager, incentives and budgeting, and other regulations. A target of 20% of energy saving has been set (INPRES 13/2011). The Programme has been translated into several regulations on resource conservation addressing different target groups such as: resource conservation in government buildings and reduction of energy consumption in energy-intensive industries. Law 30/2007 has mandated the increased use of New and Renewable Energy as an effort to diversify. Implementation of this law will become the responsibility of central and local governments. The government, for example, has launched a 10,000 MW electricity programme (already in Phase II) which emphasizes renewable energy as its main energy source, especially geothermal energy which comprises 39 %. Government Regulation - PP 70/2009 on Energy Conservation mandates that energy conservation is the responsibility among stakeholders; government, private sectors, community. User of energy sources and energy use greater than or equal to 6,000 tons of oil equivalent per year are mandatory to conduct energy conservation through energy management. Presidential Instruction 13/2011 on Energy & Water Conservation in Government institutions and SOEs aims at water and electricity savings in 30 Government buildings, e.g. targets for vehicles 10% (PERMEN 12/2012: control of using oil products), electricity 20% (PERMEN 13/2012: Efficient use of electricity) and water 10% (PERMEN 15/2012: Efficient use of groundwater), taking 2012 as the baseline. At regional level, e.g. DINAS ESDM issued a corresponding Regional Regulation (PERDA 05/2012) at the same time. Already in 2009 a Task Force on Energy and Water had been established which shall be replicated in other DINAS subsequently. At regional level, the following three initiatives are to be highlighted: • • • 19 East Java Province (PERGUB 54/2012) stipulating electricity savings for government building with the final target of savings of up to 20% after 6 months of the PERGUB being enacted, including to select more efficient equipment as well as applying ”low hanging fruit practices” (easy and not costly to apply) to realize the saving. Special Region of Yogyakarta (PERGUB 43/2012) controlling the amount of subsidized fuel for government vehicles. Special Region of Jakarta (DKI 156/2012) – regulating the savings for electricity (20%), water 10% and controlling the fuel consumption. For more details on these regional examples, please see Chapter II on Policy instruments. 10 Efficient use of groundwater is put at the centre of sustainable use of water resources (stipulated in Government Regulation – PP 43/2008, MEMR Decree15/2012), at the regional level, e.g. the Special Region of Yogyakarta, East Java Province and City of Surabaya have issued re20 gional policies to save groundwater. Waste minimization has been put at the top of the Indonesian solid waste management hierarchy (stipulated in Act 18/2008, PP 81/2012), promoting concepts such as 3R, Waste Bank and 21 Extended Producer Responsibility (EPR) at national and sub-national levels. It defines the inter-linkage (operationalisation) of waste bank with EPR. The latter will require manufacturers and other producers to take responsibility for the management of their waste, including that discarded by their customers. 20 21 DIY DINAS MENR Regional Regulation 05/2012 defining ground water as the last option to source water and East Java PERDA 12/2011, PerGub 58/2012 on groundwater savings, 3 R initiative, PERDA 05/2012 RTRW (Article 70.2) in fact stopping the use of ground water; Kota Surabaya: PerWali 80/2011 stipulating different price levels for groundwater for household, business and industry, the latter being in the highest cost category. This is manifested in the different regulations PERMEN MOE 13/2012 on concept of 3R, waste bank and EPR, East Java PERDA 04/2010 on regional solid waste management, considering 3R approach first; Bantul (DIY) PERDA 15/2011 concerning waste management, 3R, role & function of local government, communities and private sector, incentives and disincentives as well as PERMEN MOHA 33/2010 on the role among local governments in waste management. 11 II. SCP Policy instruments in Indonesia In support of above policies, the following instruments were identified as comprising elements of the sustainable consumption and production concept. 2.1 Instruments Targeting Manufacturing Industry The following instruments specifically targeting the manufacturing industry are in implementation. Cleaner Production instruments With KLH’s policy on Cleaner Production (2003), several instruments for Cleaner Production have been introduced to Indonesian industry sector to prevent and minimize waste generation (e.g. through 5R initiative – with Rethink, Reuse, Recycle, Recovery, Reduce) Ekolabel I (paper) The Ekolabel Indonesia is one of Indonesia’s voluntary environmental management instruments aiming at protecting the environment through information of the consumer and increased production efficiency. Implementation started in 2003 with initial support by the donor agency JICA to set up the criteria for each product group and develop capacity. There are two kinds of Ekolabel under MOE’s auspices: Ekolabel Type 1 and Ekolabel Type 2. Ekolabel Type 1 (“Ramah Lingkungan”) is based on ISO 14024 and needs certification by an independent third party accredited by the National Accreditation Agency, KAN. The product criteria are based on scientific technical studies of the respective products' environmental aspects throughout its lifecycle. Reduction of negative impact is in particular dependent on the consumption side (user behaviour) of the product life cycle (re-/use, maintenance, disposal). Criteria for eco-label of 8 product categories are available, incl. paper products, textiles and textile products, synthetic detergent powder for household, finished leather, leather casual shoes, packing paper, tissue paper for hygiene (sanitary tissue), and primary type of carbon zinc batteries and alkaline. Especially paper producers are asking for certification of Eco-label. Ekolabel II Ekolabel Type 2 refers to the standard ISO 14021 and is a self-declared environmental claim with independent third party certification. KLH has developed a guiding manual to support the industry in implementing Ekolabel II. The certification scheme for Ekolabel II is still under work. Environmental Rating System Indonesia’s most popular environmental rating system is PROPER, a public disclosure programme for environmental compliance, targeting medium and big size companies. Companies can either apply for their rating (voluntarily) or, regional administrations, encouraged by MOE, propose candidates for the rating (also if non-complying). Once included in the scheme, it is mandatory for the businesses to comply with the regulations (this is regularly checked by the MOE PROPER Technical Team); any results are disclosed to the public. In order the stakeholders to communicatively respond to the performance of the companies, the rating is classified in five-colour category. This is the only colour-based rating system used worldwide. The colour indicators and specifications are explained in annex 3. 22 The scheme has been operational since 1989. By 2012, 1317 companies in the manufacturing, mining, energy and oil/gas, agro-industry, industrial estate 22 12 companies have obtained gold rating, 119 green, 771 blue, red 331 and black 79. 12 sectors from 22 provinces have been participating in the scheme. The PROPER system and SCP philosophy converge in the categories of “beyond blue” (i.e. green and gold). Its key success builds on the active participation of the stakeholders in responding the performance rating of the companies. Based on the PROPER mechanism, Yogyakarta has addressed waste water minimization in their “W2M Programme” focusing on industrial processes and service sectors. The target group is medium sized companies, hotels (starting from 3 stars), and hospitals. The initiative has been running since 2009 (issued in 2006); the award is given based on an audit (check of the location); cooperation has been established with local players e.g. other DINAS such as PDAM (Water service), PHRI (Industry), and Tourism. Green Product catalogues The Eco-products Directory published by the Asian Productivity Organization (APO) focuses on promoting the concept and practice of environmentally responsible purchasing among enterprises and consumers in the region. The directory 2010 contains 1,000 eco-products and -services developed by environmentally advanced enterprises, of which nearly 550 are categorized as energy saving, more than 550 as effective in preventing global warming, and around 450 as helping to reduce the consumption of resources. Green Industry Award The Green Industry Award is a program of the Ministry of Industry since 2010 and is held every year. Objectives of the programme are to encourage and motivate industry to materialise the company's opportunities for greening their products and processes as well as industry as a whole. The award is given to companies that have implemented industry resource savings patterns and the environmentally friendly and renewable use of energy and raw materials. All sizes of businesses are addressed: three categories have been set for (1) larger industries, (2) small and medium industries as well as (3) state owned 23 companies. Nominations are evaluated on several parameters, such as (i) production process (incl. raw materials), energy, water, processing technology, products, human resources and work environment), (ii) industrial management (incl. internal company policies, CSR / community development, green industry-related certification), (iii) Industrial environmental management efforts (incl. industry and environmental management performance). Holding AMDAL or UKL/UPL is a pre-condition for participation as well as PROPER rated from blue and above. Mandatory CSR 23 24 The Company Liability Act Number 40/2007 (article 74) has introduced mandatory CSR for natural resources-based companies which basically became effective in late 2011. In addition, progressive and proactive companies, mainly the export-oriented sectors, have introduced international standards (environment management, OHS, energy management, or even ISO 26000 on CSR) and/or voluntary reporting initiatives GRI, IFC Performance Standards or 24 similar. If life cycle based and/or holistic approach, CSR projects are in line with the SCP philosophy. This instrument carries the chance for funding SCP projects which could help reducing the negative impact on the environment and society. In 2010, 43 companies competed for the category of large private companies, 13 companies for small and medium companies and 12 state-owned enterprises totaling 68 companies. The first Green Industry Awards were given to PT. Holcim Indonesia Tbk, PT. Riau Andalan Pulp and Paper, and PT. Tri Polyta Indonesia in the category of larger industries, and PT. Ekanindya Karsa, Mayestic Buana Group and AKAS in the category of small and medium industries, as well as PT. Pupuk Kalimantan Timur, PT. Semen Gresik (Persero) Tbk and PT. Krakatau Steel (Persero) in the category for state owned enterprises; see Jakarta Updates (11.03.2010): “Industries gets Green Industries 2010 Awards” (http://www.jakartaupdates.com/2403/industries-gets-green-industries-2010-awards, accessed 15.03.2013). To the opposite, some companies might consider CSR as mere donations, or philanthropic activities. 13 2.2 Instruments Targeting Tourism Industry When it comes to resource efficiency and environmental performance in the tourism industry, the attractiveness of a tourist site depends on a clean environment. This is why the Study takes into consideration green city initiatives that provide incentives for sustainable living in rural and urban areas as well as those instruments that are specifically addressing tourism stakeholders. The following instruments are in implementation. ASEAN model city ADIPURA Award (Green cities) Eco Hotel and Resort standard “Green and Clean” (CSR Unilever) 25 The annual ASEAN model city award is a regional initiative funded by the Japan-ASEAN Integration Fund (JAIF) promoting the development of Environmentally Sustainable Cities (ESC) across ASEAN member states through national programmes encouraging and supporting innovative and voluntary bottom-up initiatives through capacity building, training and other methods. The award scheme allows each country to present an environmental sustainable city as an example. ADIPURA is a programme under MOE’s auspices aiming to assist local government (i.e. the city, district as well as the province) to increase their capacity in regional environmental management. Objectives of the program are good governance and environmental protection. Participants are divided into 25 four categories based on population. Incentives granted include the ADIPURA award as well as technical assistance. Competition is created between regions/cities in building on their "local uniqueness". The programme has been implemented since 2002 covering all of Indonesia (nationwide), with a clear mission to also support eastern (poorer) parts of Indonesia. The main implementation partners are therefore the city and district governments. Activities included are monitoring and evaluation of urban environmental management (at least 3 times a year), development of local environmental management, strengthening of environmental management capacity in the regions, and creation of partnership to support finance and implementation. TÜV Rheinland Group has developed a new Eco Hotel and Resort standard (“Eco Hotel”) standard targeted at hotel owners and managers to reduce carbon emissions and increase environmental protection. The standard offers accommodation and tourism-related service providers the opportunity to prove their environmental friendliness and, at the same time, reduce their operating costs by conserving valuable resources. The standard features enhanced elements and criteria to ensure greener, safer and more efficient operations. It allows for interactive communication between all stakeholders in the future by an internet based platform called the ‘Green Hub’. The “Green and Clean” movement has been initiated in 2001 in Surabaya as part of the Unilever Indonesia Foundation’s community-based environmental programme. In 2008, Unilever Indonesia launched a proactive environment campaign and movement to reduce global warming at the community level. The aims of the campaign are to create a massive popular movement and to educate people so they can be responsible to reduce their GHG impact. This initiative is supported by e.g. the establishment of waste banks. By 2011, UNILEVER had covered ten big cities in Indonesia located in the major islands facing already now a negative eco-footprint: Surabaya, Jakarta, Yogyakarta, Makassar, Medan, Bandung, Banjarmasin, Balikpapan, Manado and Denpasar. Training was provided to community leaders to act as agents of change in waste management. Over the last 10 years, the number of those facilitators has reached 150,000 people. Partnership has been created with local governments and NGOs to ensure the sustainability of water conservation and eco-friendly behaviour through community facilitators. (1) Metropolitan cities (over 1 million), (2) cities (500.000-1.000.000 citizens), (3) medium cities (100,001 to 500,000 citizens) and (4) small cities (up to 100,000 citizens). 14 Green Cities Development Programme The Ministry of Public Works has launched a programme designed for shifting Indonesian cities orientation to become more liveable while at the same time responding to threats resulting from climate change. It is focused on balancing economic growth with efficiency, ecological preservation and social justice. Eight green city attributes together form the core of the concept, namely: green planning and design, green community, green open space, green water, green waste, green energy, green transportation, and green building. Since its start in 2011, 60 out of 491 districts and municipalities nation-wide have voluntarily joined the programme and signed a commitment to prepare and implement their green city action plans. GCDP is a collaborative programme between the city/district government with green communities, supported by the provincial government and facilitated by the Central Government through technical assistance and incentive delivery. Local governments can gather in interactive learning programs and share experiences and practices. Interested local governments receive facilitation by the Ministry of Public 26 Works when preparing their green city action plan and/or when turning plans in to practice. Criteria for qualification include (1) strong leadership by the Mayor or Regent in the concern to take environmental action, (2) good performance in urban spatial planning, design, and management; and (3) strong commitment to improve local environmental quality. The latter must be indicated by their willingness and readiness to share their local budget, to acquire land for pilot projects, and to establish strong public participation. Green Hotel Award At ASEAN level, in 2007 the Green Hotel award scheme was launched to feature those hotels that adopt the ASEAN Green Hotel Standards into their services. Driving factors for the establishment of the Green Hotel Standards were the close competition in the hotel industry and the growing awareness of environmental conditions such as climate change and global warming issues. Every two years, all ASEAN member states are allowed to nominate up to 2 of their hotels to obtain the award acknowledging the implementation of ecofriendly principles in their operation. In 2012, 10 Indonesian hotels were hon27 oured with the ASEAN Green Hotel Recognition Award 2012. Following the ASEAN initiative, the Indonesian Ministry of Culture and Tourism together with the Ministry of Energy and Mineral Resources, the Central Executive Board of the Association of Indonesian Hotels and Restaurants (PHRI BPP), Green Building Council Indonesia (Indonesia GBC), Trihita Karana Bali Provincial Municipalities, the Association of Experts Engineering Hotel Indonesia (ASATHI), the Indonesian Consumers Foundation (YLKI), Expert Water and Environmental Management and Green Radio - 89.2 FM Jakarta have initiated a national Green Hotel Award to give appreciation and respect to those hotel managers who are committed to applying environmentally friendly principles. 26 27 Incl. establishing the master plan and detailed engineering design for green open space, green map, working on public campaigns etc. In: TN Global Travel Industry News (13.01.2012): 10 Indonesia hotels received ASEAN Green Hotel Recognition Award 2012 (in: http://www.eturbonews.com/27380/10-indonesia-hotels-received-asean-green-hotelrecognition-award, accessed: 16.03.2012) 15 Kampung Hijau and Kampung Wisata (Green village) After the earthquake and flooding in 2006/2007, the Special Region of Yogyakarta initiated the “green village” programme (kampung hijau) to reduce the impact of global warming (global warming), while improving the environmental damage that often lead to a series of natural disasters such as landslides, floods, forest fires and droughts. Activities under the Green Village programme include environmental management in sub-districts (desa / kecematan and/or RW): waste minimisation, rain water collection, and re-planting. Competition among the green villages to receive the “Green Village” award 28 encourages their drive and supports their progress. It is a holistic approach as the award criteria integrate other concepts and instruments such as the ex29 30 istence of Waste Bank and the ADIWIYATA School Programme . The award differentiates from other “green” community awards in adding other indicators such as social, cultural, technological, and public health. The concepts highlights the importance of the village government, BAPPEDA and the community itself to jointly conserve the environment and build a comforting space for living now and in the future. Key success factors were the active support by the Mayor of Yogyakarta, incl. at Province level, and public participation. This leadership is complemented by village regulation (PERDES) to institutionalize the action. To accelerate and intensify the movement, starting this year (2013), 75 community based “environmental ambassadors” will be allocated in the districts and sub-districts of the Special Region of Yogyakarta as change agents to further drive the communities. They will be trained as facilitators by the Province level (2 weeks) and the salary will be paid by the local governments. Selection will take place among those people in the village interested in the environmental matters. Cluster management will be encouraged to co-financed and self-support. A longer time frame is foreseen to support the communities with the facilitation of composters (organic waste), minimization of plastic waste, paper recycling, and cluster management for every sub-district (kecamatan), until minimum 2017. A similar award scheme is the tourism village “desa wisata” (e.g. desa Tembi) that encourage community action for resource conservation. A tourism village, often in remote areas, aims at keeping its traditions while reaping benefits from local tourism activity (accommodation, sites). It is an integrated form of tourism that blends traditional village life and the local environment with existing procedures and regulations (incl. on environment). The GOI, by September last year (2012) had developed 569 rural tourism communities, aiming at a minimum of 967 tourism villages across Indonesia through the National Program for Community Empowerment for Tourism. Each village obtains 31 funds of up to 150 million Rp. (approx.12.000 EUR). Example activities include such as “clean Friday”, domestic composting and mini-PDAM (rainwater capturing), waste to energy initiatives and community-based disaster mitigation. Also river management, in its function to attract tourism, receives a high grade of attention. 28 29 30 31 In 2011 the following villages have been evaluated by the Province and given advice to sustain and strengthen their achievements: (1) Hamlet Gatak II, Garden Tirto - Kasihan, Bantul; (2) Hamlet Cebongan Lor, Tlogoadi Mlati District, Sleman; (3) Nglegi Village, District Patuk, Gunungkidul; (4) Mercy Village, Sub Love, Kulonprogo; (5) RW 11 Badran, Yogyakarta. See definition under “Waste Bank”. See definition under “Adiwiyata school programme” In 2009 around 100 villages were developed, with the help of Rp 100 million per village; in: Kompas (25.09.2012): Pemerintah Kembangkan 967 Desa Wisata (see: http://travel.kompas.com/read/2012/09/25/0836322/Pemerintah.Kembangkan.967.Desa.Wisata, accessed 16.03.2013) 16 Kampung Iklim (Climate village) Last year (2012), the Ministry of Environment has started the nation-wide “climate village” programme (kampung iklim) to achieve climate change adaptation measures at community level. The Programme encourages people to increase adaptive capacity to climate change, reduction of greenhouse gas emissions. Implementation efforts of climate change adaptation and mitigation adjusted to the local conditions are being rewarded. The programme targets at establishing 1000 kampung iklim by 2020. In Yogyakarta municipality, three villages have been selected (Gambiran, Pandean, Umbul Harjo) to become kampuong iklim as those were already experienced in the implementation and achievements of being a “kampung hijau”. Three categories are differentiated regarding their particular need for adaptation due to different challenges: (1) Fishing villages (dangers of sea level rise, intrusion of sea water/high waves and abrasion), (2) Rural villages (changes in rainfall patterns, flooding, erosion, water shortages and crop failures) and (3) Urban communities (exposition to water shortages, flooding, and increased climate-related diseases). 2.3 Instruments Targeting Resource Efficiency in Buildings The following instruments addressing resource efficiency in buildings are in implementation. Greenship Award 32 The Green Building Council Indonesia (GBCI)’s Greenship voluntary rating scheme for existing and new buildings is based on the LEED scheme (4 criteria: bronze, silver, gold, platinum), with the “silver certificate” standing for 32 compliance with existing laws. The objective of the scheme is to build a team of Greenship professionals (e.g. Greenship associate (advising the society) and Greenship professionals (measuring impact). Specific guidelines are available for green building for hotels and the GBCI has been promoting green hotels, education of hotel management, setting-up of green committee per each hotel, advisory services for preparation for audit. Green construction material catalogue A Green Construction Material Catalogue has been made available by Alam Santi (January 2011) following the GBCI Greenship Guidelines. DIY) Green Building/ Construction The Special region of Yogyakarta has issued a Regional Regulation referring to implementation of construction, which provides environmental friendly as the principle (PERDA DIY 13/2012). It was enacted in December 2012, emphasizing the need for environmentally sound construction (articles 2 and 10: “the basis of construction should follow the principle of (f) environmental sustainability” and “the process of carrying out construction should protect environmental sustainability and be implemented in an efficient, effective and innovative way”. Implementation is supposed to start this year (2013). While the PerMEn MOE 08/2010 has been fully integrated in the silver category, in some aspects the GBCI might be delayed in the intake of new laws, e.g. with the Eco-label for green construction material which is not yet integrated into their rating. 17 The following instruments are in the pipeline. (DKI) Green Building Code With support by the International Finance Corporation (IFC, Climate Change working group) and the Danish Government (DANIDA), the Special Region of Jakarta (DINAS Public Works) has enacted a Green building Code for DKI Jakarta, a first of its kind in Indonesia. The Governor’s Decree (PerGub 38/2012) requires compliance with the Building Code for all new buildings and existing buildings. This is the first time a green building regulation is being implemented in Indonesia. The start will be made with larger 33 buildings as their owners have greater financial capability. The GBC will affect office, trade and residential buildings with floor space of 50,000 square meters or more; hotels and health facilities with floor space of more than 20,000 square meters and education facilities covering more than 10,000 square meters. There are about 200 buildings that meet the criteria. When fully implemented, (i.e. in all new and existing buildings) the code is expected to help reduce energy consumption of large commercial and residential buildings by about 2.7 million tons of carbon dioxide per year by 34 2020. The regulation aims at creating greater efficiency in electricity and water use, and waste treatment. P2B (City Construction Supervision and Regulation Agency) is enforcing the code for new buildings through granting the building permit. It is foreseen that thereafter, the city evaluates the regulation after three to five years. For existing buildings, the occupancy permit is renewed every 3 years by P2B. The code will foresee linking the renewal of the permit to the compliance with the code/energy consumption below the threshold. A data base is being developed on building-related resource consumption (water and energy benchmarking; GHG emissions maybe at a later stage) to be used for monitoring and future benchmarking. The data will be entered by the building developers/managers in the context of their obligatory reporting (on a monthly basis to the provincial Government, incl. an energy reduction plan). A gradual increase in targets (and penalties for noncompliance) will be introduced. National level Umbrella Code for Green Buildings Following the DKI Green Building Code, with international donor support, a national Government umbrella code for green buildings is being developed allowing for future up-scaling of the achievements. Pilot projects for GBC development in further cities with excellent environmental performance such as Surabaya, Yogyakarta are foreseen. For the umbrella code, MoPW is the main counterpart. 2.4 Cross-cutting Instruments In addition to the green building instruments, which in a way also are cross-cutting to all potential target groups (Government, industry, service sector, civil society), the following further cross-cutting instruments are already in implementation. 33 34 Construction costs are expected to be higher than before, but green buildings will profit from cheaper maintenance and operational costs thereafter. http://www.thejakartapost.com/news/2012/09/13/new-green-buildingcode-focus-water-electricity-efficiency.html http://www.ecoseed.org/low-carbon/green-buildings/15162-about-200-large-buildings-going-green-in-jakarta 18 ADIWIYATA scheme ADIWIYATA is a programme aiming at turning schools into centres for learning environmental friendly lifestyle. Target groups are the school management, teachers and students. It consists of 4 components: (1) Environmental policy for the school (curriculum integrates environmental conservation and management; budgeting RKAS accounts for environmental management; (2) Implementation of environment-based curriculum with following standards: teacher with competency to develop activities for environmental lessons; students conduct environmental conservation action, (3) participatory approach of the school’s planning of environmental activities; partnerships with the different stakeholders (community, government, private, media and other schools); and (4) Management of supporting environmental-friendly infrastructure (environmental friendly infrastructure/facility; quality improvement of infrastructure/facility management). Energy consumption label (for CFL) Based on the Government regulation 70/2009 on Energy Conservation, the ESDM has developed a Label on Energy Consumption for compact fluorescent light (CFL) based on mandatory self-declaration. It will take effect in May 2013, allowing more than 6 month adjustment time to the manufacturers. ESDM will conduct inspection/audit of this self-declaration. The companies need to report on a half yearly basis. New product groups (e.g. refrigerators) are foreseen to be included in the label. For each product group a new ministerial decree is necessary as for every product category the standard/product criteria have to be mentioned. Environmental/ CSR/ Energy Standards (ISO 14001, 26000, 50001) Indonesia’s businesses (manufacturing and tourism industry), on a voluntary basis, and to a certain extend motivated by international demand (trade partners, tourists), have introduced international environmental standards for management systems (ISO 14001 on Environmental Management, OHSAS 18000 on Occupational Health and Safety , ISO 26000 on Social Responsibility, ISO 50001 on Energy Management). Green Finance A great variety of economic and fiscal incentives have been put in place by the GOI through its respective line ministries and administered by the Ministry of Finance or the banks directly. The Ministry of Environment since 1992 has launched four environmental soft loan schemes addressing SMEs and micro enterprises using grants from donor countries to help reduce pollution. The four schemes include the pollution abatement equipment scheme with a multimillion USD grant from Japan (JBIC), an industrial efficiency program and a pollution control program funded by German Development Bank KfW (IEPC 1), phase two (IEPC 2), and the associated debt swap program (DNS). Many banks, e.g. Bank Nasional Indonesia (BNI), Bank Mandiri, and private Bank Central Asia (BCA), Bank Internasional Indonesia (BII), and Bank Danamon have experience in the promotion of soft loans and commercial credits to environmental projects. Other instruments comprise e.g. tax holidays, free VAT and customs facilitation being granted for environmental friendly investments/ the installation of 35 cleaner technology. In 2010 Indonesia established a 1bn USD Green Investment Fund (IGIF) to boost economic growth and to reduce emissions providing additional funds for projects in which lenders seek additional injections of equity to the project. 35 The Study finds that the full scope of the budget allocated for economic and fiscal incentives has not yet been utilized at its optimum as the administration of applications is slow, and hence the disbursement as well, which has shown to be little attractive for businesses. 19 Negotiation of targets for environmental improvement Based on Indonesia’s voluntary pledge for GHG emission reduction, and the GOI’s PERPRES 61/2011 on National Greenhouse Gas Emission Reduction Plan (RAN-GRK), the development of national and regional GHG emission reduction plans has been made mandatory. By March 2013, the RAN-GRK (national level) and 29 out of 33 RAD-GRK (provincial Action Plans) are available (all 29 manifested by a Governor’s Decree). The shared targets have been negotiated in a participative approach between various DINAS, sometimes involving private sector and universities, each of them assuming a key role to support the achievement of GHG emission reduction targets across Indonesia. The next step will be their integration into the existing monitoring system under the steering of BAPPENAS. This is to facilitate the reporting and the implementation of the action plans. In the Special Region of Yogyakarta, the Joint Secretariat of YogyakartaSleman-Bantul (Kartamantul Joint Secretariat) is the form of inter-municipal cooperation responsible for the joint management of shared challenges, including environmental issues such as garbage management, liquid and solid waste management, drainage management, road management, clean water, transportation and spatial layout. Through the inter-municipal collaboration, the LGs optimized their services to their communities, e.g. identifying common urban problems and addressing them through integrated efforts (coresponsibility and co-funding). Together they developed the joint Local Action Plan to Increase the Environmental Quality 2007-2011. The action plan defines different key issues of the municipal environmental quality and identifies strategies, milestones, and responsibilities to address them. Discussions take place twice a month under the steering of BAPPEDA examining main development issues; outputs of those discussions have become integrated work program of those three regions. While at the beginning (1999-2000) the joint initiative was financed by the provincial budget, since 2001, the funding has been taken over by the three LG budgets. Subsidy/price instruments One of the most effective instruments – but also one of the most hesitated ones – is to internalize the impact that is being caused by business operation to the environment as a real cost. In fact, price-related instruments such as subsidized growth, distorted energy and water prices, or no pollution cost often conflict with the intentions of SCP. With fossil fuel, water and electricity prices being subsidized, their scarcity is not being accounted for. Attributing a monetary value to the environmental impact that the provision of an economy’s products and services implies, i.e. the use of environmental resources and the impact on pollution, health etc. facilitates change in behaviour towards a more sustainable consumption and production pattern. Indonesia is providing fossil fuel subsidies (oil price) with the best of intentions: to provide energy access for all citizens, especially the poor; to provide economic assistance to businesses; to protect domestic markets from international price volatility; and to curb inflation. Following subsidy reductions in 2005 and 2008, fuel subsidies in 2013 are projected to amount to approx. 194.000 billion Rp, or .12% of Indonesia’s state budget – more than what the central government spent on education (6%) and spending on health (1%); other reports quote even 15% of the public budget, and the amount is growing with the number of cars and motorbikes moving on the streets in Indonesia, as well as 36 with a rising oil price. Indonesia’s subsidies are the largest (in absolute terms). Its fuel price is Asia’s 37 cheapest (and the world’s fifth-cheapest). Last year when the government at- 36 37 http://www.anggaran.depkeu.go.id/dja/acontent/Nota%20Keuangan%20RAPBN%202013.pdf (accessed: 02.05.2013) And http://ekonomi.kompasiana.com/moneter/2013/02/20/dana-kesehatan-vs-subsidi-bbm536470.html (accessed: 02.05.2013) http://www.ukti.gov.uk/de_de/export/countries/asiapacific/southeastasia/thailand/premiumcontent/ 357940.html?null (accessed 16.03.2013). 20 tempted to reduce fuel subsidies by 30%, Indonesia faced intense demonstrations which made the government delay the increase. It is an expensive strat38 egy and the amount of subsidy could be used for other purposes. On another note, this year (2013), nation-wide the electricity price has been increased. Surabaya City added an increase in water price to it (PERWALI 80/2011), which provide disincentives particularly to industry (highest cost category) from overusing water and encouraging reuse of water. Voluntary footprint benchmarking Motivated by efficiency gains and to respond to the global trend of greening the supply chain, Indonesia’s large and/or export-oriented businesses have introduced, on a voluntary basis a self-assessment / benchmarking on carbon 39 and water footprint. Waste Bank Waste Bank is a community based refund mechanism for segregated waste. The community segregates different household waste types (organic waste/composting, plastic, glass, styrofoam, aluminum foil) and brings it to the Waste Bank facility where the trash is weighed and valued according to the market price (e.g. paper more expensive than plastic). The value will be added to the customer's account; payment takes place once the distributor picked up the waste and paid (up to twice a month). The concept of waste management through Waste Bank was first pioneered in since 2008 in the village of Bandegan/Bantul, Yogyakarta Special Region (for 40 cleaning up after the earthquake); and later adopted by a number of communities in the various regions and allowed for up-scaling through the MOE Ministerial Decree 13/2012. SOPs were developed by DIY how to segregate (different waste categories) and how to value the waste. The community can reuse and sell or keep the waste. The waste bank brings economic incentives to the community granting the community members to decide on their own on how to deal with the revenues of their waste. By the end of May 2012 approximately 886 Waste Banks had been established in several cities in Indonesia, with 2000 tons of anorganic waste per month which amount to a revolving fund reached over 31 billion USD per 41 month. The amount of plastic waste received by the Waste Bank Gemah Ripah reaches 500-700 kg per month. By June 2012, in Bantul, the number of customers reached more than 400 people (also outside the village), with managed funds reaching Rp. 5 million. Many local initiatives have taken up the Waste Bank concept and built on it. UNILEVER, as part of their “Green and Clean” CSR programme, up to now (2013) has been assisting 390 Waste Banks and has developed 40 Waste 42 Banks which processed over than 160,000 kg waste. Starting 2010 onwards, the system was leveraged by forming cooperatives for the management of the Waste Bank. 20 Waste Banks have been transformed into business units with proper organization structures and also administration mechanics, benefitting the 2000 members as well as providing win-win sustainable solution for the community. 38 39 40 41 42 The study acknowledges that subsidies are important tool to temporarily push, pull or safeguard a group or sector. The fuel subsidy aims at supporting the less wealthy society, also given the risk of food prices in case of removal of the fuel subsidies. Therefore such fuel subsidy reform would need to be accompanied by other measures to safeguard the poor. One example of self-motivated measures has been implemented by PT. Sinas Mas Group on water foot print and carbon footprint of their implementation on the UN Global Compact initiatives. It is based on the interview with chairman of APKI/IBCSD/Green Public Procurement Network. The first idea for this bank came from Mr. Bambang Suwerda, who teaches at the Health Polytechnic in Yogyakarta to improve environment and health (hygiene), in: WML4Aceh (05.11.2010): Garbage Banks in Indonesia: A Discreet Start Up (see: http://wml4aceh.wordpress.com/2010/11/05/239/ accessed: 16.03.2013). See MOE booklet on “Waste Bank Implementation”. See http://www.unilever.co.id/aboutus/yayasanunileverindonesia/yuienvironment/, accessed 22.03.2013 21 In Bali Province, linked with the Bali Green Road Map, Badung district established the Gerakan Berkelanjutan Anti-Sampah Plastik (Gelatik) movement (Sustainable Anti-Plastic Waste Movement) for which a mobile waste collector group facilitated by DKP (Dinas Kebersihan dan Pertamanan, Local office of Landscape and Cleansing). The groups has been engaged every day of the week and collected 83 tons of plastic waste during April 2011 and November 2012 with revenues amounting to approx. 350 million Rp per year. The following instruments are in the pipeline: Banning of substances and material Carbon/ Water footprint Energy Star Rating Scheme Extended Producer Responsibility (EPR) Green Banking Award Green procurement (sustainable public pro43 curement ) Discussions are ongoing to make a shift to bio-degradable plastics mandatory for all retailers and traditional markets, and eventually ban regular plastic bags. While voluntary benchmarking has been done by larger businesses already, the MOI is supporting Carbon Footprint schemes for selected industries. Once in application, the footprint labels will address trade partners and consumers. An energy Star Rating Scheme is currently being designed between three ministries (ESDM, Ministry of Trade, MOI). EPR has become mandatory through the issuing of the MOE’s Ministerial Decree 13/2012 on waste management which defines the concepts of 3R, Waste bank and Extended Producer Responsibility (EPR). It requires manufacturers and other producers to take responsibility for the management of their waste, including that discarded by their customers. Up to now, some individual companies (e.g. Tetrapak) have shown individual producer responsibility for waste management (incl. the cooperation with their supply chain). Starting in 2013, Indonesia has established a Green Banking Award to encourage financial institutes to green their services and the operations of their customers. Green procurement can be used as an effective tool to develop/strengthen markets for green products and services. In particular some larger businesses have established Green Purchasing Policies, in support of their efforts to green their supply chain. As in many countries also in Indonesia, Government 44 is the biggest unified consumer. LKPP currently collaborates with MCC in a 50 Million USD project on Sustainable Public Procurement. At policy level, the need to promote green and sustainable public procurement is mentioned in the Presidential Decree 54/2010, article 105 (amended through Presidential Regulation 70/2012). The Indonesian Government further acknowledges (Presidential Decree No. 80 of 2003 on Public Procurement revised by LKPP in 2009) that eco-friendly procurement of goods and services is providing benefits to the community and the economy, with minimum impact to the environment. The concept of eco-friendly procurement can be applied in bidding documents. As green criteria, GPP can use existing labels and standards of environmental performance, such as PROPER scheme, Water foot print, Carbon foot print, Wood certification, Energy consumption (CFL), Ekolabel I (paper) and Ekolabel II. Exemplary application for the Special Allocation Fund (DAK) for Environment (530 billion in 2013, all 432 cities/districts can apply) could be used as a vehicle to pioneer GPP. Green labels like the energy efficiency label support the informed decision making of the consumer when purchasing. Its contribution to reducing the negative impact on environment, to a large extent depends on the user behaviour after the purchasing has taken place. 43 44 In parallel to this Study, an assignment addressing GPP in particular is being carried out. More details on conducive mechanisms for GPP can be found in the respective mission report. In 2007, from the total national budget of 763 trillion rupiahs, 240 trillion rupiahs (about USD 26.6 billion) was used for public procurement, approximately 31%of the national budget. On average, throughout Indonesia, 60% of the money available from development assistance is being used for procurement. Source: TI/CIPE (2011): APEC Procurement Transparency Standards in Indonesia, p. 12/13. 22 III. SCP in Indonesia – Success Stories 3.1 Negotiations of joint targets through facilitation by RAN-GRK Secretariat Based on Indonesia’s voluntary pledge to reduce its GHG emissions up to 26%/41% by 2020 (Baseline 2005) which was manifested through PERPRES 61/2011, Indonesia set the framework for joint target negotiations at national and provincial level. For this purpose, the RAN/GRK-Secretariat was established under BAPPENAS. The climate target negotiations are built on active participation of the central government, provincial governments and local governments, in some cases with involvement of the private sector and other related stakeholders (e.g. universities), each of them assuming a key role for developing for the achievement of GHG emission reduction targets across Indonesia. In less than 12 months’ time, now 29 out of 33 provincial action plans are ready for implementation (available and decree for their institutionalization issued). The remaining 4 are under development. The experience has shown that under professional steering of the RAN-GRK Secretariat, multistakeholder negotiations of shared SCP relevant targets is possible in all provinces across Indonesia. This expertise is a sound basis for the injection of further SCP relevant targets, indicators and necessary budgets into regional policy making. Potential cooperation with the RAN-GRK working groups for Industry, Energy and Transport, Waste should be verified to include SCP relevant objectives/indicators that might not have been considered yet. 3.2 Negotiations of joint targets through Joint Secretariat Kartamantul In 1999, a Joint Secretariat (Kartamantul) has been set up between three local governments Yogyakarta, Sleman, and Bantul to address challenges that they have in common, such as garbage management, liquid and solid waste management, drainage management, and road management. Through the inter-municipal cooperation, the local governments optimized the public services to their communities, as they jointly identified shared urban problems and ways to address them through integrated efforts (co-responsibility and co- IV. Stakeholder Mapping The commitment of Indonesia for sustainable development is high and has been expressed on several high level forums and international agreements; Indonesia has been leading by example, and during the G20 meeting in 2009 put forward a voluntary pledge on substantial GHG emission reduction (which has been institutionalized in 2011 by PERPRES 61/2011). 45 Sustainable Development and Climate Change adaptation and mitigation have received considerable attention, e.g. through the establishment of a multi-stakeholder National Council on Climate Change which directly reports to the President and a multi-stakeholder Secretariat 46 to coordinate Climate Change issues under BAPPENAS. The Study finds different line ministries having taken the lead on mainstreaming low carbon 47 growth and green economy into their policy. Since approximately 3 years this is also expressed in their institutional framework establishment of special units addressing low carbon growth and/or green economy incl. BAPPENAS (RAN-GRK Secretariat), Centre of Green Industry and Environment under Ministry of Industry (since 2010), Green Cities Development Programme under Ministry of Public Works, Climate Finance Unit (since 2011, turning into Unit for Green Economy Finance in 2013) in Ministry of Finance, as well as fiscal policy measures such as the Green Investment Fund (IGIF, since 2010). Precisely on Sustainable Consumption and Production (SCP): A National SCP Forum under the coordination of the Ministry of Environment has been created in 2011 with the purpose of mainstreaming SCP into the national development agenda, and particularly injecting the SCP philosophy into the third Medium-term Development Plan (RPJMN 2015-2019), and programming actual SCP action (e.g. through systems/tools, access to finance, information services, technical assistance, external experts and service providers). Key ministries, apart from the MoE, that have been mentioned in this regard are Ministry of Public Works (MoPW), Ministry of Industry (MoI), Ministry of Energy and Mineral Resources (MEMR), Ministry of Agriculture (MoA), Ministry of Finance (MoF). The forum currently counts about 75 members, which reflects the complex and broad nature of SCP. Currently, the forum is working on a supra-ministerial and integrated SCP policy. Since 1999, Indonesia’s government has been decentralized which transferred decision making from the Province level (representing antennas of the central government) to local level (devolution of power to city/district level). With regard to SCP, this effectively implies shifting decision making power on land/resource use issues to the city/district level as well, including the right to issue licenses and taxes. 45 46 47 The Study considers Climate Change mitigation and adaptation as only partly relevant for SCP, namely when it overlaps with the definition of sustainable consumption and sustainable production as defined in the introduction and Annex 1. In 2011, during the “Solo Dialogue”, Indonesia mentioned its plans to set up the Sustainable Development Council (placed under the President, which would coordinate ministries in dealing with economic, social and environmental affairs) and thus would have been among the first of nations with such a SD council after the 1992 Earth Summit in Brazil. The State Secretariat, however, rejected the proposal initiated by the Environment Ministry on fears of civil societies’ power to make decisions linked to sustainable development. A number of countries such as the Philippines, South Korea and Mongolia had established the powerful council on sustainable development. Work units having started with climate change mitigation/adaptation issues would also naturally develop into broader areas e.g. low carbon growth, green economy, etc. becoming more and more congruent with issues covered by the SCP philosophy. 25 When mapping the stakeholders relevant for SCP policy elements, four case examples have been differentiated allowing for a higher grade of exemplification. Green products and services are mainly driven by demand. Demand can come from government, industrial and private end-consumers (all income brackets, both genders, all ages) and their interest representation (e.g. NGO/CSO). The different stakeholders are summarized in the following: SCP in macro economic/ development poli50 cies SCP in the Manufacturing In51 dustry SCP in the Tour52 ism Sector Resource Efficiency in Build53 ings Not applicable • End-consumers • Public procurement units at central and sub-national levels (e.g. ACs, paper, etc.) • Corporate purchasing department (e.g. eco-labelled material, energy star rated equipment) • Domestic and international tourists (e.g. organized in MPI Masyarakat Pariwisata Indonesia tourist club, Bali Friends of Tourism, Pokdarwis) • Public procurement units at central and sub-national levels (e.g. green hotel for conferences and meetings) • Corporate purchasing department (e.g. using clean transport for sustainable tourism initiative) • Residents of apartment/ house/ building • Public procurement units at central and sub-national levels (e.g. green construction for public works) • Corporate purchasing department (e.g. resource efficient refurbishment of a business office) 4.1. Stakeholders for sustainable consumption 4.1.1 Consumers and users Main stakeholder groups when it comes to sustainable consumption are, above all, the Government procurement agencies (representing the purchasing culture of the nation’s biggest unified consumer), as well as corporate purchasing departments (representing the respective corporate culture for buying processes) and private end-consumers (showing an individual or group-specific purchasing pattern, e.g. differentiated by different gender, age, income levels etc.). 4.1.2 Stakeholders framing sustainable consumption and use As the Study lays particular focus on government policy, emphasis has been given to sustaina54 ble consumption by government. Main stakeholders that set and enable the framework of sustainable and green public procurement are the MOE of Assistant Deputy for Capacity Building and Technical Infrastructure Development which includes standardisation, technology and cleaner production, eco-labelling and cleaner technology. The National Public Procurement Agency, LKPP, develops and implements public procurement policies and is responsible for a national Sustainable Public Procurement (SPP) project supported by MCC. The Indonesian Eco-labelling Institute (LEI-Lembaga Ekolabel Indonesia) develops forest certification systems. The MOF administers the economic instruments and steers the Green Fiscal Reform. 50 51 52 53 54 Includes topics such as Sustainable Development, Green Economy, Low-carbon Growth, SCP; climate change institutions have not been particularly mentioned to keep the focus on SCP Includes topics such as Clean Technology, Cleaner Production, Energy Efficiency, EMS, zero waste, cradleto-cradle Includes Sustainable Tourism, Sustainable Food Chain, Clean Mobility etc. Includes topics such as Green Building, Green Construction See Chapter on Scope and limitations. 27 Stimulation of green procurement by industry or green purchasing by end-consumers can be 55 driven by government (e.g. using SCP policy instruments) ) or by Business to Business (B2B) or Business to Consumer (B2C, incl. public consumer) policies which are voluntarily implemented by industry for different reasons (e.g. international trade and retail partners driving the greening of their supply chain, or innovative industries pioneering or going beyond government policy to be a first mover and secure a green consumer segment, and other). 4.2. Stakeholders for sustainable production 4.2.1 Producers Regarding sustainable production, stakeholders include suppliers of goods and services at Government and private business. Government stakeholders include Government units delivering public services (e.g. citizen service, education and health) as well as State owned companies (SOEs) providing services (e.g. state energy agency PLN, state bank BNI, statistics bureau BPS) or manufacturing goods (e.g. State cement maker Semen Indonesia). Private business stakeholders include industrial manufacturing (e.g. UNILEVER), as well as profit and non-for profit service providers e.g. financial sector (commercial banks such as ANZ, Citibank, UOB), schools/training centres/academia, consultants/facilitators, audits (e.g. SGS, TUV Rheinland), watchdogs/advocacy (e.g. NGOs/ CSOs such as WWF, Greenpeace, YLKI, YPB), provision of information and news (e.g. media/press). 4.2.2 Stakeholders framing sustainable production Stakeholders framing the creation of sustainable goods and services are the consumer (through demand of green products and services, and by their purchasing pattern, see above), and other drivers such as international agreements and pressure regarding the international image, donor agencies and consultants, Government (enabling and driving SCP), and industry (through efforts to green their supply chain, see above). And precisely, regarding the 4 core areas considered in the Study, the following stakeholder groups can be differentiated: 4.2.3 International organisations and donors There is a great variety of international organisations framing the Indonesian SCP agenda. Exemplarily, the following initiatives can be summarized (and clustered by core area): 55 SCP in macro economic/ development policies • • • • SCP in the Manufacturing Industry • • • SCP in the Tourism Sector • • • Resource Efficiency in Buildings • • • ASEAN APRSCP UNEP/UNFCCC International donor organisations e.g. IFC (Green Finance), ILO (green jobs), EU (ASIA SWITCH) WTO APEC and other international partner countries (trade related) International donor organisations e.g. IFC (Green Finance for manufacturing businesses), DANIDA (on Energy Efficiency), JICA (3R), GIZ/KfW (on sustainable production, climate change), UNIDO (ODS, Clean Technology), UNEP (Energy Star Rating for CFL) UNWTO ASEAN (Green Hotel award) International donor organisations e.g. IFC (Green Finance for tourism business), GIZ (RED/sustainable tourism in Central Java) WTO APEC and other international partner countries (trade related) International donor organisations e.g. IFC (Green Finance for business, DKI Green Building Code), DANIDA (Energy Efficiency), JICA (3R), ILO (green jobs) See Chapter on SCP policy instruments. 28 4.2.4 Government agencies The Government’s stakeholders involved in creating an enabling and steering framework for SCP cover a broad range of agencies and institutions at national and sub-national levels across 56 the entire policy cycle (e.g. policy development, planning, implementation , monitoring). While the Study acknowledges the importance of policy makers and judicial agencies, but puts emphasis on the executive government (civil service at all levels: National, Province, city/district. Within government stakeholders, the development of macro-economic policies is based on the 57 MUSRENBANG approach , involving local, provincial and central level government technical departments and line ministries, BAPPENAS (RPJMN, RPJP, planning of national level policies)/BAPPEDA (RPJMD, long term plans, planning of sub-national level policies) with its essential role to coordinate the process and MOF providing the budget. Especially for SCP in macro-economic / development policies, the KP3EI is a main stakeholder being in charge for the greening and monitoring of the Economic Master Plan MP3EI. Other than those, the following stakeholders are key (clustered by core area): SCP in macro economic/ development policies Policy development • Coordinating ministries Coordinating Ministry of Economic Affairs (CMEA), Coordinating Ministry of Social Welfare (CMSW) • MOF (Climate Finance/ Green Economy) • different sector-specific line ministries e.g. MOE (environmental policy, SCP), MoAgr (Sustainable Agriculture), MoMAF (Sustainable Fisheries), MoFor (Sustainable Forestry), MoPW (Green Cities Development Programme), MoEC (formal Environmental Education), MOI (Centre of Green Industry and Environment) • Technical DINAS/SKPD departments at province district/city level Policy monitoring • Presidential Work Unit UKP4 (monitoring of SCP-relevant macroeconomic development indicators RPJMN, RPJP, R) • BAPPENAS/ BAPPEDA • KP3EI (Economic Master Plan) • line ministries/technical department for monitoring/audit/inspection • sector-specific line ministries/technical department for monitoring compliance with the sustainable development indicators and low carbon growth indicators Policy implementation • All line ministries • Province administrations • Technical SKPD departments at district/city level SCP in the Manufacturing Industry 56 57 Policy development • MOF (Climate Finance/ Green Economy) • MOI (Sustainable Competitiveness, Industrial Policy) • MENR (Energy Mix (Switch to RE), Energy Conservation Policy) • MOE (Eco-label, GPP) • respective technical departments at sub-national level (e.g. BLH, DINAS ESDM/PU, DINAS Perindustrian dev. of Provincial policies re. energy efficiency and resource conservation) • BPPT/RISTEK • Ministry for SMEs and Cooperatives While policies are mostly formulated by a single (sector-specific) ministry, the implementation and enforcement depend on other ministries and/or administration as well as other actors at micro and meso levels (such as businesses, civil society, and monitoring/auditors and judicial. MUSRENBANG is the annual central public planning process (bottom up) 29 Policy monitoring • MOI • Ministry for SMEs and Cooperatives • line ministries/technical department for industry inspections (e.g. audit by government) • regional public monitoring regarding green industry (e.g. Tim EKPD, APEM) Policy implementation • MOI • Ministry for SMEs and Cooperatives • MOE • MOPW • BPPT • Province administrations • Technical SKPD departments at district/city level SCP in the Tourism Sector Policy development • MOF (Climate Finance/Green Economy) • MOTCE and technical departments at sub-national levels (Sustainable Tourism Policy RIPPARNAS, “green and clean” tourist area and “clean and green” tourism operations) • MENR and technical departments at sub-national levels (Energy Mix (Switch to RE), Energy Conservation Policy) • MOTr and technical departments at sub-national levels (clean mobility) • MOPW and technical departments at sub-national levels (sustainable construction, sustainable infrastructure, sustainable cities) • MOE and technical departments at sub-national levels (e.g. waste, ADIPURA) • MOEC (sustainable tourism in vocational schools and universities) • Ministry for SMEs and Cooperatives Policy monitoring • MoTCE • Ministry for SMEs and Cooperatives • line ministries/technical department for industry inspections (e.g. audit by government) • regional public monitoring regarding sustainable tourism (e.g. Tim EKPD, APEM) Policy implementation • MoTCE • Ministry for SMEs and Cooperatives • MOE • MOPW • Province administrations • Technical SKPD departments at district/city level (e.g. DINAS KP • Government (e.g. green hotel for government conference/ trip) Resource Efficiency in Buildings Policy development • MOF (Climate Finance/Green Economy) • MoPW (Framework for Green building Code, Green Cities Development Programme) • MOI (Sustainable Construction (material) sector) • MENR (Energy Mix (Switch to RE), Energy Conservation in Buildings) • MOE (e.g. Green criteria for sustainable construction material, R) • respective technical departments at sub-national level (e.g. DINAS PW, Green building code, green construction and operation) 30 Policy monitoring • UKP4 • regional public monitoring and local inspections (e.g. government audit of DKI green building code by P2B) Policy implementation • MoPW • Province administrations • Technical SKPD departments at district/city level (e.g. DKI PU) • Government (e.g. resource conservation in government buildings) Other public supporting agencies that the above core areas have in common are the following: • MOF (Unit for Administration of Fiscal Instruments) • National Statistics Bureau BPS (generation of data/ SCP-relevant indicators for the respective core area) • National multi-stakeholder forum National Council on Climate Change (DNPI) and its technical working groups on low carbon development (directly reporting to President) • MOEC (inclusion of SCP subjects in curricula of (vocational) schools and universities, e.g. sustainable consumer behaviour, circular economy, sustainable constructionR) • National SCP forum • MOHA (mainstreaming of SCP capacity at local level) 4.2.1 Non-Government actors SCP in macro economic/ development policies • • • • SCP in the Manufacturing Industry • SCP in the Tourism Sector Resource Efficiency in Buildings • • • • • • • • • • • • • • • • • • • IBCSD KADIN Private inspection/ auditors Businesses/ companies/ SOEs/ SMEs (e.g. UNILEVER’s CSR Programme “Green and Clean”) Domestic industry corporations and SOEs incl. MSMEs and informal micro businesses (e.g. in sectors such as eco-labelled paper, energy efficient electronics, plastic avoiding/minimising packaging, sustainable furniture industries) International business partners (export oriented industry) Retailers (e.g. Carrefour) IBCSD KADIN Industry associations (pulp & paper, electronics, plastic industry, etc.) Industry inspections (by private auditors e.g. TUV, SGS) Domestic tourism businesses and related industries International and domestic trade partners (tourism sector) KADIN Hotel/tourism associations (PHRI, ASITA, Bali Tourism Board BTB) Industry inspections (by private auditors e.g. TUV, SGS) International and domestic investors Owner/ managers of new and existing buildings Construction companies Supply chain of sustainable construction material (e.g. in energy efficient technology, sustainable furniture industries, sustainable construction, Green Buildings (refurbishment, construction)) Indonesian Business Council on Sustainable Development (IBCSD) KADIN Construction business associations (e.g. AKSINDO, GAPENSI) Inspections (e.g. government audit of DKI green building code by private e.g. TUV, SGS) 31 Other non-governmental supporting agencies that the above core areas have in common are the following: • Consultants, facilitators/ trainers for environmental education (formal/informal) such as teachers in primary, secondary schools, Polytechnics, professors at Universities, community facilitators / “Ambassadors” on sustainable development/ environmental behaviour in the community, Indonesian Cleaner Production Centres, GBCI (green building) • Academia and research institutes (green innovation), e.g. ITB, UI, UGM, UNDIP, NHI • Media/press (e.g. green radio.fm) • Financial sector e.g. those banks providing the environmental soft loan programme (e.g. BNI, Mandiri, BII) • NGOs/ CSOs, e.g. YLKI (consumer rights), YIPD (sustainable development), WWF, Greenpeace, Walhi, Asian Productivity APO (green product list) Synthesis of the assessment clustered by thematic core area: SCP in macro economic/ development policies SCP in the Manufacturing Industry SCP in the Tourism Sector Resource Efficiency in Buildings • Drivers for a strengthened consideration of SCP in macro economic development policies can be found at high level. Precisely, the commitment for sustainable development and climate change adaptation and mitigation has been expressed by the President. (Sustainable development policies, climate change pledge). Indonesia has acknowledged the urge to address disaster mitigation, energy scarcity and food security. Further, ASEAN and other international dialogue partners are watching the nation and the sustainability agenda. • A considerable strength of the institutional framework is the implementation experience of multi-stakeholder dialogue for negotiations of joint target setting available • Opportunities: Verification if complementary SCP targets and indicators could be equally developed and implemented in the same forums • Main drivers of SCP in industry is the demand by international consumers, expressed through the demanded requirements set by international trade partners for greening of supply chain and retailers with green policies who care about their international green image. • Strengths: Export sectors have implementation experience and showcases of efficiency gains are available. Further, the greening of the manufacturing sector receives a lot of donor support. • Proposals: Show case the good domestic practice and results achieved (in terms of increased revenue and emission/pollution/waste reduction or reduced resource use). Upscale existing pilot initiatives SCP elements have been driven in the tourism sector by international demand for green/eco-friendly tourism services. Tourism sector remains only attractive if natural resources/heritage are protected and clean (e.g. waste collected and integrated in proper recycling loop). Also, Indonesia is aware of the risk of resource scarcity (e.g. drinking water). A considerable strength for this core area is the commitment for sustainable tourism in all potential stakeholder groups (Government, private sector, CSO) and all income levels. There is a long record of implementation experience in Bali Province and Yogyakarta. • Proposals: Show-case the good domestic practice and results achieved (in terms of increased revenue and reduced eco-footprint); Upscale existing pilot initiatives Drivers of resource efficiency in buildings in Indonesia have been donor support and the awareness of the risk of resource scarcity in mega-cities with urbanization being a major trend (need for sustainable urban living). Strengths are that green buildings are relatively easy to enforce and amortizisation of the investment happens relatively short term through financial savings made through resource efficient operation. • Proposal; Enabling of up-scaling through umbrella Code at central level; Development and implementation of green building code in further cities 32 V. International SCP Schemes 5.1. Institutional set up The fundamental objective of SCP is to decouple economic growth from environmental degradation by doing more and better with less throughout the lifecycle of products. When it comes to the implementation of SCP, an institutional set-up has to be in place to orchestrate the efforts. However, there is no single ‘blueprint’ institutional model; how the set-up is established and in what way it is managed will vary from country to country. The institutional model applied should, among others, be based on: • • • • • Level of SCP application SCP vision and strategy Institutional strengths and weaknesses The ‘Green’ infrastructure Plans for governance improvement The national institutional SCP set-up varies considerably between countries. Some countries have an overarching, cross-ministerial and inclusive central SCP Forum; others have no joint SCP Forum but SCP efforts embedded in entities in several individual entities in different ministries. In most countries the Ministry of Environment is the lead agency with ministries of energy, economy, agriculture and industry as collaborators. 5.2. SCP policies The principles of SCP – and especially SP – have been on the international agenda since the 1980’s, starting with recycling, continuing with cleaner technology (less polluting enterprises), then in Europe the Integrated Product Policy (less polluting products in the life cycle perspective), and now SCP. A series of countries have formulated consolidated national SCP policies (Thailand, Brazil, Mexico, UK, France, Malta and others), while other countries have embedded SCP elements within development frameworks and sector policies. SCP is often combined with “climate impact mitigation,” “resource efficiency” and “greening of the economy” as overriding paradigm. Sri Lanka has prepared a National Strategy for Sustainable Development that emphasizes the importance of ecotourism, cleaner production, sustainable fisheries, high quality of healthcare and other most relevant issues. However, no targets or indicators have been set for any of the aforementioned policies, and little action has taken place to target the themes in practice. More capacity-building is needed to realize the objectives. Global Outlook 2012 Clearly SCP policies are most effective (in terms of fulfilling the overall purpose) if they are based on explicit goals and targets and include a monitoring system with established indicators. The identified goals and targets should then be followed by concrete strategies and not least allocated resources so as to ensure that these goals and targets are met. At the national level, the SCP approach is being applied in a variety of ways, such as within national strategies; market, regulatory and voluntary tools on multiple government levels; and a broad range of business and civil society activities. The complex nature of consumption patterns and production practices calls for a holistic approach when wanting to achieve SCP. 33 National SCP action plans and strategies are prevalent in a number of countries in Africa, Latin America and the European Union. In South Eastern Europe, Eastern Europe, the Caucasus and Central Asia typically SCP has been integrated into other planning processes. SCP is often arranged around single sectors. For instance, some countries have specialised institutional arrangements for GPP, for selected industrial sectors, or for product assessments. The Brazilian Committee for SCP has implemented an Action Plan on SCP with specific focus on small and medium-size enterprises. The Brazilian SCP policy seeks broad inclusion of different ministries while the Ministry of Environment maintains a coordination and facilitation role. The first Brazilian SCP action plan was submitted in 1998 and the new Brazilian National SCP Action Plan 2011-2013 has been launched after a broad national consultation process. Elements of the strategy include: • Green Public Procurement • Sustainable Buildings • Sustainable Retail • Implementing an Environmental Agenda in Public Administration • Increased Recycling of Solid Waste • Education for Sustainable Consumption. Global Outlook 2012 5.3. Instruments for SCP The goals and targets of the national strategy or action plan are accompanied by a set of instruments from the three categories: regulatory, economic and voluntary instruments. 5.3.1 Regulatory instruments Studies show that regulatory instruments are the most effective ones in achieving pre-defined goals (Global Outlook 2012, OECD 2003) and regulatory instruments can play a significant role in any SCP related policy package. Regulatory instruments, however, are typically based on lengthy and difficult negotiations and require human, financial and technical resources for implementation, enforcement and monitoring. Therefore the number of regulatory instruments used in national SCP schemes does not mirror the huge The UK has implemented a very potential impact of the instruments. Examples on the use of regulatory instruments in SCP schemes include: • • • • Standards on product performance and energy efficiency, for instance o The RoHS Directive and the EcoDesign Directive that restrict hazardous substances and present product minimum requirements– Europe o The banning of certain chemicals in food, food packaging or children’s toys, China and India (enforcement remains a challenge; tests of common products often reveal traces of banned chemical components above regulated limits (Global Outlook 2012) Compulsory GPP procedures for state institutions - Korea, Thailand, China etc. Compulsory GPP requirements – Thailand, China etc. Compulsory Environmental Management System (EMS) for selected industrial sectors – Denmark etc. broad range of SCP-oriented tools and concepts, clearly illustrating the environmental and socio-economic value of SCP in the UK. The initiatives include: • The Waste & Resources Action Programme (WRAP) to help businesses reducing waste; develop sustainable products; and use resources in an efficient way. • Working directly with industry to tackle environmental impacts of priority product groups • Product standards, including implementation of EU EcoDesign Directive & RoHS • Mandatory GPP for institutions and priority products • Communication encouraging best practice, information and tools to businesses and con- 34 5.3.2 Economic instruments Economic instruments can be a key policy instruments for SCP, but require sophisticated institutions to implement and enforce them: Charges and taxes need to be collected, and monitoring and enforcement is needed to avoid freeriding. Economic instruments include deposit schemes, emissions trading systems and environmental tax. Examples of the use of economic instruments include: • • • • • • • • • • Commodity charges on energy, water, gravel etc. – Europe Tax on fossil fuels (CO2-tax and others) – Europe Compulsory GPP – Japan, Korea, Thailand, China Subsidies to enterprises for green innovation – Japan, Malaysia, India Green tax on packaging, plastic bags - DK Tax reduction on energy efficient cars – Europe Differentiated charges on electrical equipment - France Resource rewards on cars and car tires - Scandinavia Subsidies to consumers – UK re-useable napkins Reduced VAT - France house repair; Belgium recycled packaging 5.3.3 Voluntary instruments The majority of environmental instruments implemented in national SCP schemes are voluntary. Despite the many efforts and the relative success of the implementation of the voluntary instruments, several studies conclude that such instruments have less impact than both regulatory and economic instruments (OECD 2003, Global Outlook 2012). Often the voluntary instruments fail to result in actual changes due to the lack of incentives for the businesses (European Commission 2011). Within the EU, this finding has resulted in a gradually phase-out of voluntary agreements along with the establishment of regulatory instruments, such as the EcoDesign Directive (Global Outlook 2012). The voluntary instruments include initiatives such as: • • • • • • Environmental ranking of manufacturing enterprises Eco-labelling Energy-labelling Environmental management systems Voluntary GPP Information campaigns. Voluntary instruments targeting industry may be useful and effective if they are market oriented and if the ‘green market’ is alive – demanding green products. Because enterprise implementation of initiatives such as eco-labelling may require significant resources, the businesses must experience an increase in sale of their eco-labelled products in order for the process to be economically viable. This necessitates that there is a demand for such products on the market. In many developing and newly industrialized countries this is yet not the case. 5.3.4 Informative instruments Informative instruments have been introduced in all countries working with SCP. The communication with stakeholders includes a very broad range of tools and approaches, including: • • • Help-desks for manufacturers and consumers Information campaigns within selected issues, for instance eco-labels Printed information material motivating stakeholders to change production or consumption patterns. 35 5.4. The Thai SCP scheme Many countries already work with SCP in various ways. Being in some aspects comparable to Indonesia, Thailand is one of the South East Asian countries from which most useful experience can be drawn. The concept of Sustainable Consumption and Production has developed in Thailand over the last three decades from some more specific environmental management tools, e.g. cleaner technology (CT) and eco-labelling, to a much broader and holistic concept, combining a broad range of social, environmental and economic disciplines and policy instruments. This section will describe the Thai SCP development and environmental management plans in order to demonstrate how SCP has been integrated in overall national planning in Thailand. 5.4.1 Thai SCP-related policies The National Economic and Social Development Board (NESDB) prepares the 5-year National Economic and Social Development Plan (NESDP), based on inputs from other ministries and with the approval of the Cabinet. The 10th NESDP 2007-2011 was the first where environmental and SCP aspects were highlighted. It resulted among other things in the preparation of national strategies for sustainable consumption and production in 2007. The 11th NESDP (2012-2016) includes a section with the headline, “Strategy of managing natural resources and environment towards sustainability”. This strategy is focused on conserving and restoring natural resources, harnessing the production and consumption patterns towards an environmentally friendly society, and gearing up for the climate change adaptation. The development guidelines are as follows: • • • • • • Conserve, restore and secure natural resource and environment bases Shift the development paradigm and consumption behaviours towards the environmentally friendly society. Improving ecological efficiency of the production and service sectors towards the environmentally friendly society Reinforce urban environment and infrastructure management Enhance adaptive capacity to achieve climate-resilient society Enhance good governance in the natural resource management. Not least points 2 and 3 clearly emphasise the importance of SCP in the Thai society. Under the eleventh plan, Thailand will promote a peaceful society with quality growth and sustainability. In dealing with a fast-changing, complicated and unpredictable environment, a set of development strategies are designed for better risk management and improved resilience in utilizing the country’s economic and social capital. Together with this, the quality of human resources will be developed through better access to resources and through a fair distribution of development benefits. To create and utilize economic opportunities, knowledge, technology and creative ideas will be crucial factors for environmentally friendly production and consumption, leading to sustainable development. The key development strategies are as follows: • • • • • • • Creation of the just society Development of the lifelong learning society Strengthening of the agricultural sector and security of food and energy Restructuring the economy toward quality growth and sustainability Create regional connectivity for social and economic stability Managing natural resources and environment toward sustainability Shifting the development paradigm and direct the country to low carbon and environmentally friendly economy and society 36 The Thai production and consumption behaviour will be restructured to prepare for a transition toward a low carbon and environmentally friendly economy. The agricultural sector is specifically targeted, energy and natural resources for agricultural production will be restored while good agricultural norms and practices will be promoted for supporting sustainable farming. Also appropriate consumption behaviour at individual and community levels and creation of production and consumption networks among communities will be promoted. Application of a zero waste approach in agriculture will be encouraged in order to utilize farm residues to produce renewable energy at the community level. To promote constructive international cooperation, the agreements under regional environmental cooperation frameworks will be adhered to through the promotion of green production, consumption and services that will lead to a reduction of GHG emission. The Thai Environmental Quality Management Plan (EQMP) 2012-2016 presents the most significant promotion of SCP at the national level. The EQMP represents the Ministry of Natural Resources and Environment’s (MNRE) interpretation of the 11th NESDP, with more details on how Thailand can move in a more sustainable direction. The Office of National Environmental Board (ONEP) has the overall responsibility to prepare this plan which contains the following aspects: • • • Strategies for Sustainable Consumption and Sustainable Production Goals and targets (and indicators) for government, agriculture, industry, tourism, energy, transportation, financial sector Clear structure, tasks distributed between ministries The EQMP 2012-2016 was developed in parallel with the 11th NESD Plan and the SCP measures are illustrated in the figure (source: Draft SCP Policy and Institutional Framework Assessment, SWITCH Asia Thailand, 2013). 37 Total figures for 2008-2012 Item Total products/services % 3,702,159 321,023,713 86% 508,410 38,460,384 89% 6,435,429 9,242,456 59% 65,286 1,433,864 34% 311 23,316,775 35% Office consumables 1. Printing paper Baht 6. Document box 105,257 4,306,357 10% 7. Printer toner 150,049 436,514,338 45% 76,071 4,327,565 80% 9,759 60,382,850 2% 844,759 18,404,055 40% Durable goods etc. Unit Share GPP products/services 11. Fluorescent lamp 53,468 3,793,090 80% 12. Primary battery 56,941 3,307,694 70% 13. Building paints 4,973 2,966,491 40% 14. Steel furniture 1,390 6,510,315 30% 15. Photocopier rent 2,376 237,644,626 18% 454 413,850,183 30% 1,681 303,129,092 24% 12,018,773 1,888,613,853 68% 2. Toilet roll 3. Envelop 4. Whiteboard marker Service 5. Photocopier machine 8. Eraser (liquid) 9. Printer 10. Document file 16. Cleaning service 17. Accommodation service (hotel) Total The expected target groups for the next phase of Thai GPP are 2,088 municipalities and 178 local authorities. 5.4.3 Sustainable tourism in Thailand The organisation Designated Areas for Sustainable Tourism Administration, DASTA, was established in 2003 with the mission to support sustainable tourism in designated areas in Thailand. The existence of the dedicated sustainable tourism organisation ensures a constant focus on the options of developing sustainable tourism destination, areas and concepts in the country. DASTA formulates policies and administrative plans for designated areas for sustainable tourism, including coordination with government agencies in the capital, local agencies, and the civil sector. DASTA deals, among others, with themes as: • • • • • • Improving local cooperation Saving energy, reducing costs, Raise local income Increase travel experience of tourists Increate quality enhancement and innovation Protect the natural heritage 40 5.5. SCP policy in Brazil Brazil has been working with Sustainable Consumption and Production since 1998, when the first SCP National Action Plan was launched. The action plan was the first of its kind in the South American region and has therefore been influential in setting the standards and forming the SCP plans of other South American countries. After a broad participatory national consultation process, the plan was revised in 2011 and integrated with other strategic plans, such as the National Plan for Climate Change and the National Plan for Solid Waste. The SCP action plan is coordinated and facilitated by the Ministry of Environment, but the ministry does not lead the implementation of actions in a number of thematic areas. Although based in the Ministry of Environment, the action plan shows a vigorous and continuous process of engagement of all stakeholders from within state governments, the private sector and civil society. The plan seeks broad inclusion of different ministries in the country and involves the various stakeholders through the establishment of task forces and voluntary initiatives. The revised Action Plan from 2011 works as a guide to identifying, managing and coordinating actions to change the current patterns of consumption and production. The plan identifies six main priorities: • • • • • • Green Public Procurement Sustainable Buildings Sustainable Retail Implementing an Environmental Agenda in Public Administration Increased Recycling of Solid Waste Education for Sustainable Consumption. Projects aimed at raising awareness on sustainable consumption include an initiative on SPP; policies for the disposal of solid waste; the green label Colibri; and sustainability initiatives in the building sector (UNEP 2012). 5.6. Japan Green Purchasing Network In 1996, the Green Purchasing Network of Japan (GPN-J) was established by the Environmental Agency in collaboration with consumers, businesses and government organizations. The network has a strong multi-stakeholder collaboration, which promotes many innovative initiatives and activities. As of June 2009 GPN-J had more than 3,000 members. The network, whose goal is to promote green purchasing, is based on four major principles: i. Consider necessity before purchasing ii. Note the environmental impact of a product at all stages of its life cycle iii. Consider corporations’ and distributors’ environmental performance iv. Gather environmental information when purchasing products (GPN-J 2006). The network has developed a database in which 11,000 products have been assessed based on the network’s purchasing guidelines. The efforts of the network have been supported by the Ministry of Environment’s Law on Promoting Green Purchasing from 2000, which requires government agencies to purchase environmentally friendly products. Besides providing information on green purchasing and facilitating a forum for consumers, businesses and government organizations to communicate, the network also runs training courses six to eight times a year for purchasing officers in the government, in order to disseminate the purchasing principles as well as the Law on Promoting Green Purchasing. Other educational activities include promoting the green purchasing criteria to companies/product developers, international networking to share best practices and working to raise consumer awareness about the availability of green products. 41 The Law on Promoting Green Purchasing has been rather effective in that many companies have improved their products to meet the criteria of the purchasing guidelines. This has helped to expand the market for environmentally friendly products, which in turn has made it easier for the consumer to purchase green products. Overall, the mandating of the governmental green purchasing has been key in ensuring the long-term effectiveness of the GPN-J project (Global Outlook 2012, 120). 5.7. Chilean GPP approach Chile has implemented a comprehensive GPP strategy with the following key elements: • • • • • • Institutional development Gradual, simple and clear environmental criteria Adequate certification of environmental criteria Public officers’ capacity building Adequate supply of green products Communication of benefits. A key tool in Chilean GPP is life-cycle-costing, with which the Chilean authorities have proved a potential 2 M€ annual saving if state institutions in Chile changed all light sources to LED lamps. 5.8. Green Growth Road Map in Cambodia In 2009, the Cambodian government created a Green Growth Secretariat within the Ministry of Environment, aimed at securing environmentally sustainable economic growth in the country. The work of an inter-ministerial working group in cooperation with development experts and practitioners resulted in a National Green Growth Roadmap. The overarching goal of the roadmap is to secure goods and services necessary for the Cambodian people. In this regard, the roadmap is concerned with four focus areas: agriculture, tourism, industry and commerce. The roadmap seeks increased coherence between sectoral and agency development priorities in order to mainstream Green Growth concerns into the overall development framework of Cambodia. Through multi-stakeholder collaboration in the design and implementation of programs and projects, the roadmap can help create green jobs and contribute to the stimulation of the economy while protecting the environment. Necessary actions identified by the roadmap include: • The creation of a National Ministerial Green Growth Council • A national public awareness and consultation process • The integration of eco-village/eco-city initiatives into the country’s National Strategic Development Plan • A strategy for greening industries based on resource efficiency and the 3Rs • The development of stimulus measures for promotion of sustainable agriculture in cooperation with international and local development agencies • The establishment of green funding mechanisms, including payments for ecosystem services, internalization of environmental externalities and debt-swap schemes and measures to strengthen the national environmental industry sector (Global Outlook 2012, 115). 5.9. National Programme on SCP in Mauritius The Ministry of Environment and Sustainable Development in Mauritius developed a National Programme on SCP in 2008. The programme consists of 44 projects to be implemented by 14 lead agencies within five years. A National SCP Coordination Committee has been set in place to ensure effectiveness of the program and its contribution to a more sustainable Mauritius – “Maurice Ile Durable.” 42 Also in 2008, the Mauritius government introduced the Maurice Ile Durable Fund with the purpose of funding sustainable development projects on the island. The projects are funded through subsidies, development partners, carbon credits and taxes, such as a tax on plastic bags, polyethylene terephthalate bottles and petroleum products, as well as a road tax for large vehicles. During the first year of the SCP programme, Mauritius collected US$30 million to be used for sustainable development projects, such as consultancy for SMEs and subsidies and grants for sustainable consumption choices. The Mauritius National Programme on SCP includes initiatives such as: • Developing a shared vision on sustainable buildings (Urgent) • Promoting sustainable products through financial incentives and improving their visibility (High) • Developing Minimum Energy Performance Standards (MEPS) for key household appliances (Urgent) • Sustainable Government Procurement (High) • Developing locally adapted education resource materials on SCP for use by schools (Urgent) Currently, 25 of the 44 projects are under way through joint or individual action by several ministries. Lack of funds is the main obstacle to a successful implementation of all 44 projects. According to the Ministry of Environment and Sustainable Development, a higher degree of political, technical and financial support is necessary for the further success of the program (Global Outlook 2012). 5.10. SCP policy in Columbia The Columbian SCP policy builds on existing environment and industry policies, such as the National Cleaner Production Policy from 1997, the National System of Competitiveness from 2006, the Environmental Programme for Companies and Industries from 2007 and the National Policy of Logistics from 2008. The SCP policy is a manifestation of the commitment to SCP expressed in the Columbian National Plan of Development from 2006. The SCP policy provides guidelines for changes in consumption patterns and production for the enhancement of businesses’ competitiveness and the wellbeing of the Columbian population. The principles behind the guidelines have been determined in agreement between Columbian environmental authorities, industry, civil society and technical experts. Besides overall goals, the policy includes guidelines for implementation and instruments for evaluation and follow-up of environmental commitments. The results of the policy include: • The recycling of 14 million gallons of used motor oil and the recycling and/or disposal of 3 million components of cellular phones • The ban of imported products containing halon gas and the use of chlorofluorocarbon in refrigerators • Ninety per cent reduction in the baseline of carbon tetrachloride (CC14) • Reduction of toxic waste in Columbian mining processes involving hazardous substances, such as mercury (Global Outlook 2012, 135). 43 Key references: • • • • • • Switch Asia Thailand: SCP Policy and Institutional Assessment Report Switch Asia Thailand: Analysis of Thai and international GPP schemes. European Commission 2011, Mid-term evaluation of the sustainable consumption and production and sustainable industrial policy action plan. Technical report, http://ec.europa.eu/environment/eussd/pdf/14.%20SCP-SIP%20AP%20Mid%20Term%20%20Final%20Report.pdf (visited 03/19/2013) UNEP: Global Outlook 2012, Global Outlook on SCP Policies. Taking action together. GNP-J 2006, http://www.gpn.jp/English/aboutgpn.html (visited 03/18/2013) Environmental Economics Department, Division of information and environmental economics, Chile Ministry of Environment: Costs and benefits of green public procurement. APEC Workshop, 2013. 44 VI. Proposals inspired by the study and the stakeholders The following proposals have been elaborated based on the project team’s findings and conclusions. The proposals have been presented to and discussed with stakeholders at the SCP workshop in March 2013. The proposals focus on the overall organization of the national SCP efforts and on initiatives specifically targeting sustainable production. Sustainable consumption proposals will be included in the specific report on Indonesian GPP to be submitted May 2013. 6.1. Coordinated policies and strategies Proposal Rationale Challenges and issues A permanent and formal SCP Secretariat at a sufficiently high level (decision-making power) could be established to support the SCP Forum with proposals, strategy inputs, integration of different policies and policy elements, analyses of instruments and infrastructure, etc. The SCP Forum has been formed but has not yet fully undertaken the role as the inspiring SCP leader in Indonesia. National SCP Leadership should be clearly expressed at the highest political level. Support to the SCP Forum by a competent secretariat could contribute significantly to the impetus and dynamics of the Forum and ensure proper basis for all issues for discussion and decision. The SCP Secretariat could also support the specific ministerial entities dealing in practice with SCP related issues within the different sectors. A consolidated SCP policy will provide important directions for mainstreaming of the SCP concept, preparation of specific strategies, and cooperation between the stakeholders. The policy should be closely aligned with other relevant policies, including the GRAND strategy for industry and the climate impact reduction policies A genuine strategy will lay out the actual objectives to be pursued and the prioritized initiatives to be initiated. The strategy should be closely aligned with climate impact reduction policies and strategies and other relevant plans • A ministerial decree or similar policy statement could support the formal establishment and position of the SCP Forum and the Secretariat • An organizational plan for the Secretariat should be prepared • The Secretariat should be allocated sufficient resources both human and financial to carry out its tasks. • The Forum and the Secretariat should be accepted as SCP focal points by the key ministries and stakeholders The on-going efforts of the SCP Forum on preparing a national SCP policy should be further supported. Strategies should be developed for the key policy elements, including production, tourism and green public procurement. • Formulation of overall policy goals and indicators • Coordination with other existing policies, including alignment with the ongoing initiatives covering both producers and consumers • Engagement of relevant ministries and other stakeholders in the work • Formulation of more precise strategy objectives and targets with indicators, especially benefitting the existing indicators on SCP under the overall Sustainable Development Indicators published by BPS in the year 2012 • Coordination with other existing strategies and plans, e.g. build on the positive experiences made with multi-stakeholder negotiations in the context of RAN/RAD GRK emission reduction targets, bringing in further targets for material consumption, energy reduction, waste avoidance at national and sub-national levels • Agreement with stakeholders on strategy objectives and steps • Allocation of budget to implemen- 45 Proposal Rationale Challenges and issues • An SCP monitoring system can be established to document progress on selected parameters. Monitoring should be kept simple with few, meaningful indicators – preferably specified during strategy formulation. Monitoring SCP performance and results will allow the GoI and interested stakeholders to assess the level of progress and the benefits achieved for Indonesia • • • In order to accelerate the integration of SCP principles in Indonesian consumption and production, it is proposed to investigate and implement not only voluntary SCP instruments but also regulatory/ mandatory and economical ones. Instruments may include: Mandatory product requirements; fees and charges on products; cleaner technology requirements; mandatory green public procurement; and others. Specific focus could be on economic instruments motivating enterprises to reduce resource consumption, for example a (gradual) increase in the commercial sector’s payment for water, energy, waste, and discharges. Other economic instruments to be considered include support schemes for sustainable production and grants for green consortia between private sector and research institutes The overall reliance on voluntary SCP instruments is understandable, but not effective. International experience show that policies mix – with use of regulatory, economical, voluntary, and informative instruments – provides much better results. Instruments should contribute to elimination of the least sustainable products (product minimum requirements, product charges) as well as promotion of the most sustainable products (GPP criteria, eco-labels, and support schemes). • • • • tation of the strategy and assuring its implementation under the supervision of high level decision maker within the SCP secretariat Establishment of capacity to carry out the strategy, e.g. together with the implementation of the RAN/RAD-GRK action plans In order not to create additional administrative challenges, the SCP monitoring should be based on existing institutions and capacity – and where possible on existing data collection systems Some capacity building will be needed to ensure proper collection and analysis of data (in particular at sub-national level). A systematic feed-back to the SCP Forum and relevant stakeholders should be ensured to allow for strategy optimization in light of the monitoring results Relevant regulatory instruments need to be analyzed in an SCP perspective to ensure balance between costs, administrative burdens, and expected impact Introduction of regulatory instruments is difficult in the national context Regulatory instruments need to be linked with innovative effective enforcement mechanisms. Close cooperation between KLH, MoI, MEMR and MoF unit for Green Economic Growth should be pursued. 46 6.2 Sustainable Production Proposal Rationale Challenges A concrete strategy with targets and indicators for sustainable production should be prepared, focusing on areas with potential large benefits for the Indonesian society. Pursuing sustainable production should be closely linked with the MOI efforts within the energy intensive sectors (cement, iron & steel, pulp & paper, textile, petrochemical, food & beverage, ceramics & glass, and chemicals). The MoI is already including mitigation of the energy and water consumption in the efforts A national Clearing House for Sustainable Production should be established to provide low-price consultancy to enterprises, supporting them in harvesting the low hanging fruits and implementing more proactive green strategies. This could be a gradual process, starting at sub-national level first, e.g. Jabotabek or East Java. A concrete strategy will promote both industry’s and the service sector’s attention on sustainable production methods in a life cycle perspective. Clear benefits will include cost savings through reduced resource consumption and waste generation, admittance to public procurement, admittance to international markets, improved branding and others. • Political decision and resource allocation from GoI • Close coordination to ensure the synergy during the implementation • The perception of environmental improvements as being purely costly – in institutions as well as in industry Few industries are aware that environmental improvements and introduction of sustainable production methods are often cost saving. There is no public institution providing qualified advise to enterprises on SP. A dedicated organization for sustainable tourism should be established to increase the sustainability of tourism. Formulation & implementation of a technical policy on sustainable tourism could be supported. A ministerial decree can be followed up by a strategy, indicators, guidelines, and instruments supporting implementation. This could also be started at subnational level, e.g. in Bali Province, given the importance of the sector for the island. It has already been demonstrated in Indonesia that the tourism sector has good possibilities to improve its environmental performance, hereby saving resources and funds and attracting an international clientele. Based on the statistic, in the year 2011, tourism sector has contributed to 4% of national GDP and th being the 5 rank after In Thailand, a Sustainable Tourism Institute appears to have a good influence on the tourism sector’s performance. • Political decision and allocation of resources from GoI or industry • Organizational setup, with strategy, structure, staff etc. Or enhancement of current ICPC (Indonesian Cleaner Production Centre) into the Indonesian Sustainable Consumption and Production Centre. It will require strong branding awareness to the stakeholders • Outreach to industry • Political decision and allocation of resources from GoI or the sector • Organizational setup, with strategy, structure, staff etc. • Outreach to the tourism sector Green Public Procurement will be dealt with in the specific GPP report to be submitted may 2013. Initiatives suggested focus on a sub-national demonstration project aiming at testing GPP in the Indonesian context. 47 Annex 1: Definition of SCP and Demarcation from other Concepts a. Definition of Sustainable Consumption and Production The term “Sustainable Consumption and Production” was first defined at the Oslo Symposium on Sustainable Consumption in 1994: “Sustainable Consumption and Production (SCP) is a holistic approach to minimizing negative environmental impacts from the production-consumption systems in society. SCP aims to maximize the efficiency and effectiveness of products, services, and investments so that the needs of society are met without jeopardizing the ability of future generations to meet their needs.” SCP acknowledges the need for economic growth but advocates for economic progress within the carrying capacity of our planet and its limited resource basis. The key word at centre stage is “decoupling”, i.e. resource decoupling (less resource use and pollution per unit of economic activity) and impact decoupling (overall environmental impact reduced despite overall increase in economic 58 activity). Sustainable Consumption and Production as implementation strategy for sustainable development builds on the 2002 UN World Summit in Johannesburg on Sustainable Development (WSSD) and its Plan of Implementation – an UN-led global process to support the elaboration of a 10-Year Framework of Programs (10YFP) on sustainable consumption and production, also called Marrakech Process. It starts from the premise that achieving the necessary reductions in environmental pressures caused by economic activities in developed and emerging countries will be extremely challenging and can’t solely be met through efficiency improvements in production processes and product design. It will also require changes in the mix of goods and services we consume. Identifying and encouraging these adjustments are the focus of the policy area of Sustainable Consumption and Production (SCP). Mitigating environmental effect of human activities has traditionally focused on minimizing the effects of individual goods and services, through process reengineering or end-of-pipe solutions. The SCP approach goes one step further, acknowledging the influence of consumer demand on the production process, and therefore as a policy area that can be harnessed to minimize the environmental effects of consumption. SCP is a practical approach to achieving sustainable development which addresses the economy, society and environment (triple bottom line). It aims for economic growth while reducing emissions, increasing efficiencies and preventing unnecessary wastage of resources within society, through all stages of a product/service life cycle(from material sourcing, manufacturing/production, distribution and logistics, sales and retail, use and maintenance, to end-of life/waste management). 58 International Resource Panel / Fischer-Kowalski, M./Swilling, M. (2011) Decoupling Natural Resource Use and Environmental Impacts from Economic Growth. Nairobi: UNEP. 48 Figure 1: Circular life cycle New raw materials Material sourcing Manufacturing Recovered and recycled materials Consumption and use Closed loop of recycling and materials recovery Product and byproduct reuse Manufacturing process reuse Distribution logistics Logistics waste and auxiliary reuse Sales and retail Packaging reuse SCP seeks to apply a life-cycle thinking which considers the impacts from all life cycle stages of production and consumption process and guards against unforeseen shifting of impacts from one lifecycle stage to another, one geographical area to another or from one environmental medium to another. When doing so, it also aims to guard against any rebound effects, where technological efficiency gains are cancelled out by resulting increases in consumption. “Sustainable consumption” does not automatically mean “less consumption” but rather more efficient, better-informed and less resource-intensive consumption. This applies especially to people living in poverty, often having a real need to increase their consumption of products and services. SCP is concerned with equity within and between generations, improving quality of life for all consumers while minimising environmental damage, or said otherwise: SCP seeks to encourage a shift of consumption patterns towards groups of goods and services with lower energy and material intensity without compromising quality of life. A SCP policy framework focuses on what a society as a whole needs: In 2009, a working group established by an initiative of the French Government and led by Professor Joseph E. Stiglitz suggested a holistic perspective on how society and the economy can be better aligned with the goals of sustainability, a perspective that integrates the governments’ efforts in economic, social and environmental policy-making. They proposed a shift of policy focus from a production perspective into one of "well-being" and sustainability (e.g. in form of the society’s happiness). SCP is based on the awareness that government, economy and civil society have a shared responsibility to support the above change of paradigm, and therefore need to take on co-responsibility to achieve SCP objectives. Cross-cutting in character, SCP needs an active involvement of all stakeholders and a wide range of locally-adapted policy responses. 49 b. Demarcation from other concepts Since the Earth Summit in 1982, a long list of different terminology and concepts regarding sustainable action have been defined. UNEP has published a helpful compilation of different concepts that re59 late to Sustainable Consumption and Production. The most commonly concepts used are elaborated below ordered by alphabet. In addition, information is given on the background and the way how the concept relates to SCP. Circular Economy and “Cradle to Cradle” Definition A Circular Economy is an economy that balances economic development with environmental and resource conservation. It puts emphasis on environmental protection and the most efficient use of and recycling of resources. The term “Circular Economy” has its roots in the expression “Cradle to Cradle” (in contrast to the “Cradle to Grave” concept of a linear “take, make, dispose” or “resource to waste” way of functioning of industrial processes and lifestyle).Cradle to Cradle promotes the principle that products can be designed from the outset so that, after their useful lives, they will provide nourishment for something new. This could be either as a biological nutrient that will easily re-enter the water or soil without depositing synthetic materials and toxins or as technical nutrients that will continually circulate as pure and valuable material within a 60 closed loop industrial cycle. History The term “Cradle to Cradle” was created in the late 1970s by Walter Stahel. He worked on developing a “closed loop” approach to production processes and created 61 the Product Life Institute in Geneva more than 25 years ago. Relation to SCP Being a circular approach on changing the paradigm of industrial processes and lifestyle, the “circular economy” or “cradle to cradle” concept lies at the heart of what SCP aims at in a multi-level and holistic way. A Circular Economy features low consumption of energy, low emission of pollutants and high efficiency. It involves minimization of resource intensity by design, e.g. applying Cleaner Production in companies, ecoindustrial park development and integrated resource-based planning for development 62 in industry, agriculture and urban areas. Cleaner Production 59 60 61 62 63 Definition Cleaner Production strives for the continuous application of an integrated preventive environmental strategy to processes, goods, and services to increase overall efficiency, and reduce risks to humans and the environment. Cleaner Production can be applied to the processes used in any industry, to goods themselves, and to various services provided in 63 society. History The concept was developed during the preparation of the Rio Summit 1992 as a programme of UNEP (United Nations Environmental Programme) and UNIDO (United Nations Industrial Development Organization) under the leadership of Jacqueline Aloisi de UNEP (2010): ABC of SCP, Clarifying Concepts on Sustainable Consumption and Production. http://en.wikipedia.org/wiki/Circular_economy http://en.wikipedia.org/wiki/Circular_economy UN (2010): ABC of SCP, p. 15, or UNEP (www.unep.fr/scp/nap/circular/about.htm). UN (2010): ABC of SCP, p. 15, or UNEP DTIE (www.unep.fr/scp/cp/understanding/). 50 Larderel. The programme was meant to reduce the environmental impact of industry. It 64 built on ideas used by 3M in its 3P programme (pollution prevention pays). Relation to SCP Cleaner Production is integral part of SCP, starting from the idea to produce with less waste; Cleaner Production was developed into a concept to increase the resource efficiency of production in general. SCP however, is wider in scope and focuses on a consumption/ demand side while the CP concept is restrained to a preventive, companyspecific environmental protection initiative. It is intended to minimize waste and emissions and maximize product output. Eco-efficiency Definition Eco-efficiency is a management philosophy that encourages business to search for environmental improvements that yield parallel economic benefits. It focuses on business opportunities and allows companies to become more environmentally responsible and more profitable. It is a key business contribution to sustainable societies. Ecoefficiency is achieved by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity throughout the entire life-cycle to a level at least in line 65 with the Earth’s estimated carrying capacity. Critical aspects of eco-efficiency are: 1) A reduction in the material intensity of goods or services; 2) A reduction in the energy intensity of goods or services; 3) Reduced dispersion of toxic materials; 4) Improved recyclability; 5) Maximum use of renewable resources; 6) Greater durability of products; 7) Increased service intensity of goods and services. History The term eco-efficiency was coined by the World Business Council for Sustainable 66 Development (WBCSD) in its 1992 publication "Changing Course". Relation to SCP Eco-efficiency is based on the concept of creating more goods and services while using fewer resources and creating less waste and pollution which is fully in line with the “decoupling” concept (increasing economic progress while minimizing resources) promoted by SCP. Green Economy Definition 64 65 66 67 According to UNEP, a green economy is one that “results in improved human wellbeing and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy can be thought of as one which 67 is low carbon, resource efficient and socially inclusive.” A green economy is one whose growth in income and employment is driven by public and private investments http://en.wikipedia.org/wiki/Cleaner_production. UN (2010): ABC of SCP, p. 16, or World Business Council (www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MTgwMjc). for Sustainable Development http://en.wikipedia.org/wiki/Eco-efficiency. See “How is a Green Economy defined” in: http://www.unep.org/greeneconomy/AboutGEI/FrequentlyAskedQuestions/ tabid/29786 /Default.aspx (accessed on 03.07.2012) 51 that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services. These investments need to be catalyzed and supported by targeted public expenditure, policy reforms and regulation changes. This development path should maintain, enhance and, where necessary, rebuild natural capital as a critical economic asset and source of public benefits, especially for poor people whose livelihoods and security depend strongly on 68 nature. History The UNEP-led Green Economy Initiative was launched in late 2008. It consists of several components whose collective overall objective is to provide the analysis and policy support for investing in green sectors and in greening environmental unfriendly (“brown”) sectors. The GEI initiative is to demonstrate that investing in sectors such as renewable energies, clean and efficient technologies, water services, and sustainable agriculture can contribute to economic growth, creation of decent jobs, social equity, and poverty reduction while addressing climate and other ecological challenges. Relation to SCP Green economy is an economy or economic development model based on sustainable development and knowledge of ecological economics. Striving at minimising the environmental footprint of economic action includes products, processes, and services that reduce environmental impact or improve natural resource use, and doing so it is fully in line with the SCP concept. Green Growth 68 69 70 Definition Green Growth is a strategy for achieving sustainable development. It stands for environmentally sustainable economic progress that fosters low-carbon, socially inclusive development. Strategies of green growth articulate concise and clear entry points and policy approaches for making real gains in eco-efficiency and transferring to lowcarbon development, synergising climate action with development goals. Green growth is used for overhauling the economy in a way that synergizes economic growth and environmental protection, building a green economy in which investments in resource savings as well as sustainable management of natural capital are drivers of growth. OECD promotes “Green Growth” as fostering economic growth and development “while ensuring that natural assets continue to provide the resources and environmental services on which our wellbeing relies”. The Global Green Growth Forum (3GF) bases their action on the OECD definition and additionally determined eight areas for public-private action: energy efficiency, renewable energy, test markets for electric vehicles, bridging the fuel gap in the transport sector sustainable bio-fuel for aviation, green public procurement, water resources and financing green 69 growth. UNESCAP identified four pillars for the transition to greener growth, namely: eco-tax reform, sustainable infrastructure, the greening of businesses, and sustainable consumption. UNESCAP integrates the four concepts of Pollution Control, Ecoefficiency, Eco-effectiveness and Sustainable Economy as different stages on the way 70 to a greener economy. History In March 2005, at the 5th Ministerial Conference on Environment and Development (MCED 2005) in Asia and the Pacific (Seoul, Republic of Korea), some 340 delegates, UNEP Green Economy initiative (GEI) (http://www.unep.org/greeneconomy/AboutGEI/WhatisGEI/tabid/29784/Default.aspx). (www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MTgwMjc). Report 3GF Global Green Growth Forum, Global Green Growth Institute (2011), p. 7. Greening growth in Asia and the Pacific, UNESCAP (2008), p. 17 ff. 52 including representatives from 52 member and associate member countries of the Economic and Social Commission for Asia and the Pacific (ESCAP) endorsed Green Growth as a policy focus and strategy to promote win-win approaches to reconciling the conflict between the achievement of two important Millennium Development Goals: MDG 1 (poverty reduction) and MDG 7 (environmental sustainability). In 2011, the Danish Government together with Governments of Korea and Mexico launched a global public-private partnership for green growth, the Global Green Growth Forum (3GF). The idea behind this Forum is to bring all relevant parties together in order to intensify large-scale public-private action to accelerate the transition to a green economy. Relation to SCP Green Growth is comprised of several mutually-reinforcing “paths” (or entry points) through which policy makers can focus interventions, among which: Sustainable Consumption and Production, Greening Business and the Markets, Sustainable Infrastructure, Green Tax and Budget Reform, Investment in Natural Capital, and Eco-efficiency Indicators. The idea of intensifying large-scale public-private action to accelerate the transition to a green economy (promoted by the G3F) is in line with the SCP concept’s striving for co-responsibility for a shift in paradigm of economic progress. Low-Carbon Economy Definition A Low Carbon Economy (LCE), low-fossil-fuel economy (LFFE) or decarbonised economy is an economy that has a minimal output of greenhouse gas (GHG) emissions into the environment biosphere, but specifically refers to the greenhouse 71 gas carbon dioxide (and equivalents). LCE is defined as a new economic, technological and social system of production and consumption to conserve energy and reduce greenhouse gas emissions, compared with the traditional economic system, whilst 72 maintaining momentum towards economic and social development. It is often referred to as a precursor to the more advanced “zero-carbon society” and “renewable energy economy”. History On the international scene, the most prominent early step in the direction of a lowcarbon economy was the signing of the Kyoto Protocol, which came into force on February 16, 2005, under which most industrialized countries committed to reduce their 73 carbon emissions. The Kyoto Protocol has recently been extended until 2020. Relation to SCP Low carbon is one part of reduced resources use promoted by the SCP concept, among many other energy resources and natural resources. Sustainable Development and Sustainable Economy Definition 71 72 73 Sustainable Development is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable development includes economic, environmental and social sustainability, which are independent and mutually reinforcing pillars, and can be achieved by rationally managing physical, natural and human capital. Poverty eradication, changing unsustainable patterns of production and consumption and protecting and managing the natural http://en.wikipedia.org/wiki/Low_carbon. UN (2010): ABC of SCP, p. 34. http://en.wikipedia.org/wiki/Low-carbon_economy. 53 resource base of economic and social development are overarching objectives of, and essential requirements for, sustainable development”. A Sustainable Economy is one in which resources are not used up faster than nature renews them (i.e. acts within the Earth’s carrying capacity). It also creates a thriving climate for business that balances 74 environmental, social, and economic vitality. The three pillars of Sustainable Development are usually referred to as triple bottom line: economy, society, environment (or 75 “people, planet, profit”). History Relation to SCP Sustainability, itself, was first defined by the Brundtland Commission of the United Nations in 1987 (based on the Report of the Brundtland Commission “Our Common Future”, 1987). Sustainable development builds on the 2002 UN World Summit in Johannesburg on Sustainable Development (WSSD) and its Plan of Implementation. SCP is an implementation strategy for sustainable development. Zero Waste Definition Zero waste is a philosophy that encourages the redesign of resource life cycles so that all products are reused. Any trash sent to landfills and incinerators is minimal. The Zero Waste International Alliance defined zero waste as “a goal that is ethical, economical, efficient and visionary, to guide people in changing their lifestyles and practices to emulate sustainable natural cycles, where all discarded materials are designed to become resources for others to use. Zero Waste means designing and managing products and processes to systematically avoid and eliminate the volume and toxicity of waste and materials, conserve and recover all resources, and not burn or bury them. Implementing Zero Waste will eliminate all discharges to land, water or air that are a threat to planetary, human, animal or plant health.” History The term zero waste was first used publicly in the name of a company, Zero Waste Systems Inc (ZWS), which was founded by PhD chemist Paul Palmer in the mid-1970s in Oakland, California. The mission of ZWS was to find new homes for most of the 76 chemicals being excessed by the nascent electronics industry. In 2004, a working group of the Zero Waste International Alliance described the above working definition of zero waste. Relation to SCP 74 75 76 The reduction of waste and pollution “by design” is part of the SCP philosophy. UN (2010): ABC of SCP, p. 45, or Oregon Environmental Council (www.oeconline.org/our-work/economy). http://en.wikipedia.org/wiki/Triple_bottom_line. http://en.wikipedia.org/wiki/Zero_waste. 54 Annex 2: List of Stakeholders Visited No Date Jakarta 1 30.08.2012 Institution/people met Contents discussed Switch Asia baseline debriefing • Mr. Jorgen Boldt • Mrs. Sri Handayani • Mrs. Karin Merle KLH • Mr. Nur Adi • Mr. Arif • Mrs. Euis ESDM • Mr. Arif • Mrs. Eva MOI • Mrs. Reni KLH • Ibu Euis • Pak Sudirman / Ibu Melda (Asdep 4, Deputi IV, KLH, Pengelolaan Sampah) IFC • Mr. Autif Sayyed DANIDA • Mr. Jesper Internal Kick off meeting 2 11.09.2012 3 05.10.2012 4 19.10.2012 5 18.10.2012 09.11.2012 6 01.11.2012 7 02.11.2012 8 05.11.2012 9 06.11.2012 10 07.11.2012 11 07.11.2012 12 08.11.2012 KADIN • Mr. Budi 13 09.11.2012 14 09.11.2012 15 08.11.2012 03.12.2012 16 07.11.2012 04.12.2012 MoF • Mr. Ragil Kuncoro BAPPENAS • Mrs. Endah • Mrs. Virgie JICA • Mrs. Ida • Mr. Seiji Tsutsui • Mrs. Juni Melanie MoTourism MoF/BKF • Mr. Bara KLH • Mrs. Laksmi (Asdep 3, Deputi I, Ekonomi Lingkungan) Private sector (multiple functions) • Mr. Thimotheus Lesmana (Head of Association of Pulp and Paper, Indonesian Sustainable Business Council, KADIN etc.) BPPT • Mrs. Titiresmi Kick off meeting (Study) National regulations for resource efficiency (Energy Manager, Energy Conservation in Government, etc.) Resource efficiency policies for selected target sectors Waste Management (3R, Bank Sampah, EPR) Green Building/code Discussion of SCP-relevant initiatives (e.g. ESP/ Energy Efficiency) and possibilities for cooperation or complementarity Green finance (climate finance, and other) Green finance, economic instruments/incentives and disincentives Voluntary reporting initiatives by private sector, water label, carbon footprint, standards/ labelling BPPT as information provider to other stakeholders on green technology, National SCP forum Green initiatives in public institutions (health, education), dissemination of SCP through community leaders Fiscal incentives in place in Indonesia SCP concept, Mainstreaming of SCP in development/ macro-level policies Discussion of SCP-relevant initiatives and possibilities for cooperation or complementarity labels/standards for sustainable tourism incl. ASEAN standards on 55 No Date Institution/people met • Mr. Erman • Mr. Henky Hermantoro • Mrs. Lala Yogyakarta 12.-14.12.2012 17 12.12.2012 BLH DIY (Province) • Mr. Maladi (Secretary BLH) • Mr. Agus Setianto (Head of Division for Environmental Pollution Control) • Mr. Setiawan Reneksa (Head of Sub-Bagian Program) 18 12.12.2012 Bappeda DIY (Province) • Mr. Hero Darmawanta MT (Head of Division Controlling) 19 12.12.2012 20 13.12.2012 21 13.12.2012 22 13.12.2012 23 14.12.2012 24 14.12.2012 25 14.12.2012 KADIN DIY (Province) • Mrs. Yuyun (International Affairs) DINAS Province ESDM and PU • Mr. Bambang Dibyo (DINAS PU) • Mr. Edy Indrajaya (DINAS Head of Division ESDM/PU) • Mrs. Rani (Head of DINAS ESDM/PU) DINAS Pariwisata Yogyakarta Kota and CSO • The Head of DINAS Kota Pariwisata • Mrs. Tri Mulansi (DINAS Kabid Pariwisata) • Mr. Toto (CSO representative, development of Riverside Code, Community-based Organisation for water management, eco-efficiency) • Mr. Sikit (responsible for Green Village Empowerment) Meeting with University/Tour guide representative • Mr. Joko Susilo (Poltekes, Health Ministry) • Mrs. Hariati Bawole (UKDW – Christian Univ. Duta Wajana) • Mr. Suhirno (tour guide representative) Tourism Association • Mr. Bagus Ardhi Baliantoro (Managing Director Dewatha Sakti tours) Visit to Desa Wisata Tembi • Mr. Steven (Marketing d’Omah Yogya hotel) • Mrs. Febriana Sri Rahayu (Sales and Marketing TeMBI RUMAH BUDAHA) Visit to Bank Sampah Bantul Contents discussed Eco/Green-tourism, Cooperation between relevant stakeholders for tourism (transport, PU) SCP related policies relevant at regional level, EPR, bank sampah, green village SCP in regional development, Sustainable public procurement, waste management, GHG emission reduction Sustainable management in selected target sectors, EPR, standards, labelling self-declaration Resource efficiency, green construction, national and regional level legislation Sustainable tourism in Yogyakarta city, eco-efficiency/ sustainable city, community based riverside management linked to tourism University as driver to disseminate SCP, sustainable tourism Tourism service association as driver to disseminate SCP, Indonesian tourism community (MPI) as existing network for dissemination of green tourism/networking Example for Desa wisata, involvement of the community in supporting to provide green tourism (homestay, hotel, catering, handicraft) Operationalization of Bank Sampah, 56 No Institution/people met • Mr. Bambang Swerda (Head of Bank Sampah)/ Mrs. Andin Bali 17.-21.2012 (Denpasar) 26 17.12.2012 Meeting with BLH Province • Mrs. Yupi Wahyundari (BLH Secretary) • Mr. Dewa Ardhana • Mr. I Made Sondra • Mr. Ida Bagus Badraka (Kabid Conservation of resources) 27 Bappeda Province • Mr. Sudiarsa (representing Mrs. Nuning) 28 Date 18.12.12 Dinas PU 29 DINAS PAriwisata • Mrs. Iga Ambari – Secretary of DInas 30 Dinas Perindagkop • Mr. Ketut Darta 31 Kadinda Bali 32 19.12.12 BLH Badung 33 Dinas Kebersihan Kota Badung 34 UPT Sampah - Province 35 21.12.12 Surabaya 36 11.02.13 37 11.02.13 38 12.02.13 39 40 12.02.13 12.02.13 41 13.02.13 42 13.02.13 Hotel Association –Bali Tourism Board Meeting with BLH Province Jatim • Mr. Subarja – Kabid Program Meeting with BLH Kota Surabaya • Mrs. Chamidah Meeting with Bank Sampah Bina Mandiri: • Mr. Agus • Mr. Ari Visit Kampung Hijau Meeting with Dinas Perindustrian Province Meeting with APKI • Mr. Huda • Mr. Yunus (Ubaya – CP Club) Meeting with Bappeda Province Contents discussed EPR Bali as green and clean province, responsibility of implementation; Desa Sadar Lingkungan; award of sad kertha (2002); suggested to visit BLH Badung Intergovernmental cooperation (KAD) for waste management SarBaGiTa, various program from different dinas Role of Dinas PU Province to supervise & monitoring the implementation from district/cities, one island one management, contribution to achieve energy mix target 5 pliar of tourism in Bali, POK DARWIS, cooperation among province, the important to include education as start up for future generation Green industry since 2002, limited time to discuss – he has to chair the meeting Cancel the meeting upon our arrival – not available White book, roadmap for intergovernmental cooperation 2013-2018; strategy of 5 tracks – Pro growth, job, culture, environment, poor Program GELATIK – Gerakan berkelanjutan anti sampah Plastik A new set up of waste management operated by the province From government institution to independent operationalisation; Private perspective on existing policy – tourism – water extraction. Existing policy program relevant to SCP Program implemented in Kota Surabaya: Kampung Hijau, city park, ground water Operationalization of daily activiity in Bank Sampah Recycle domestic water, composting Policy in industry for SCP – focus on SMEs Barriers of existing policy implementation, EPR Discussion on the mitigation 57 No Date Institution/people met • Mr. Budi Santosa • Mr. Zuhdi 43 13.02.13 Meeting with Kadin: • Mr. Puguh Irianto • Mr. Nelson 44 13.02.13 45 14.02.13 46 14.02.13 Meeting with Bappeko: • Mr. Iman Meeting with Association of electronics • Mr. Ali • Mr. Totok • Mr. Permadi Meeting with Dinas ESDM Province Jatim • Mr. Supoyo • Mr. Sugeng • Mrs. Tyas • Mr. Wahyudi Additional Jakarta 48 49 Contents discussed measures on CC of east java province, they interested in eco industrial park Barrier of different subsidies (fertilizer, fuel) towards application of appropriate technology for private sectors E budgeting as platform for GPP Barriers of existing policy implementation, EPR Discussion on the implementation of INPRES 13/2011 Meeting with Bappeda Prov DKI Meeting with BLHD DKI Jakarta 58 Annex 3: Information about PROPER Indicators and Rating Scheme Ministry of Environment has developed Company's Environmental Performance Rating Program (PROPER) as an alternative compliance instrument since 1995. Initially this instrument has been known as PROPER PROKASIH. It is executed by disseminating company's environmental performance rating to stakeholders at national level. In return, stakeholders are expected to respond actively by encouraging companies to improve their environmental impact caused by their activities, therefore, can be minimized. PROPER is not a substitute for the existing conventional compliance instruments such as environmental law enforcement either civil or criminal law. This program is complementary and synergize with other compliance instruments, so that environmental quality improvement efforts can be implemented more efficient and effective. There are several factors considered in developing this alternative compliance instrument, as follows: - Poor compliance level of the companies due to inefficient compliance instruments. - Increasing demand on transparency and public involvement in environmental management. - The need of incentives for environmental management efforts by companies to create added value of environmental management. - There is potential improvement in compliance performance through dissemination disclosing information. Disclosing company's performance information will drive intensive interaction among companies, workers, communities, consumers, stock markets, investors and related government institutions. In doing so through mass media, stakeholders could be involved publicly and are expected to proactively participate in responding each company's compliance performance according to their respective capacity. In addition, disclosing of company's compliance performance to public can create incentive and disincentive reputation. Stakeholders will give pressure on the company with poor environmental management performance. Objectives PROPER is aimed to: Improve compliance of companies in environmental management. Improve commitment of stakeholders in creating environmental sustainability. Improve sustainable environmental management performance. Increase awareness of business players to comply with environmental legislation. Reinforce principles: Reuse, Recycle and Recovery in waste management. Goals Goals of PROPER are: Create better environment. Achieve sustainable development. Create natural resources security. Create conducive and environmentally friendly business climate which prioritize on application of clean production principle or eco-efficiency. 59 Assessment Principles and Procedures Five-colour based compliance rating In order the stakeholders to communicatively respond to the performance of the companies, the rating is classified in five-colour category. This is the only colour-based rating system used worldwide. In general the rating uses letters, numbers and stars. In the view of communication, this is the most understandable and memorize able by public in comparing to other rating indicators. It also gives reputation incentives and disincentives for each company. Five-colour based rating includes black, red, green, and gold. Black and red rating are for companies that do not comply, blue is for companies and green and gold are for those that are beyond compliance level and could be used as benchmark. COLOUR INDICATORS AND COLOUR SPECIFICATIONS GOLD GREEN BLUE BLUE MINUS RED RED MINUS BLACK For businesses/activities that have successfully performed environmental management efforts and achieved satisfactory results. For businesses/activities that have performed environmental management efforts and achieved better results set forth in the regulation requirements. For businesses/activities that have perform environmental management effort, and have achieved the minimum standard of regulation requirements. For businesses/activities that have perform environmental management effort, but have not achieved the minimum standard of regulation requirements. For businesses/activities have perform environmental management effort, but have achieved a part of the minimum standard of requirement as regulated. For businesses/activities have perform environmental management effort, but have achieved a small part of the minimum standard of requirement as regulated. For businesses/activities that has not performed environmental management effort significantly. This rating system also has taken into account the difference of level of effort for each company in non-compliance which are differentiated into Black and Red Ratings, and the difference of those in beyond compliance level which are categorized as Green and Gold ratings. 60
