Ecological fiscal transfers ( EFT ) could be the answer in encouraging the sustainability of Indonesia ‘s biodiversity . Unfortunately, it still needs long steps for its implementation, why?
Ocky Karna Rajasa, Head of the Earth Research Organization and the National Research and Innovation Agency (BRIN) said that biodiversity can provide benefits in the fields of food and pharmaceuticals, environmental protection and environmental services.
“Sustainable tourism, to climate change adaptation and mitigation,” he said in a discussion entitled “Measuring Biodiversity for Ecology-Based Fiscal Transfers,” last January.
EFT is not new in Indonesia. There are three ecological-based budget transfer schemes, namely the national ecology-based budget transfer (Tane), the provincial ecology-based budget transfer (Tape) and the district-based ecology budget transfer (Take).
Most of these EFT schemes are still focused on tackling climate change and waste management. There are no indicators of success that can result in success-based budget transfers in conserving biodiversity.
In fact, ensuring the sustainability of the liver is important.
In his presentation, Ocky said that Indonesia is rich in liver. Among other things, 515 species of mammals, 270 species of amphibians, 1,531 birds and is the 5th largest in the world. There are also 511 species of reptiles which are the world’s fourth largest, 240 species of rare plants, 2,827 species of invertebrates, 121 species of butterflies. Also, 480 species of hard coral cover 60% of the world’s species and up to 1,400 species of fresh water fish.
For marine ecosystems, he said, coral reefs in Indonesia reach 2.5 million hectares or 14% of the world’s total ecosystems and 292,000 hectares of seaweed.
“Our mangrove ecosystem also reaches 3.4 million hectares or 23% of the world,” he said.
For this reason, other efforts are needed so that Indonesia’s wealth can continue to be sustainable and provide benefits. EFT can be a solution so that the provincial, district/city and even village governments can protect their hearts.
The application of EFT can also be a solution to overcome the thin budget for biodiversity management in the regions. However, Erik Armundito, Coordinator for Biodiversity at the National Development Planning Agency (Bappenas), said that biodiversity funding is not a popular thing.
“The government and the private sector will count twice to distribute funds to liver management,” he said.
No wonder. If the allocation of the state revenue and expenditure budget (APBN) for the management of biodiversity in ministries or institutions is minimal. In the 2021 State Budget, Erik said that he only allocated 0.81% of the funds for biodiversity management.
While global trends show that at least US$ 100 million per year is needed to manage liver. This number increases to US$800 million per year after 2020.
“That’s why we need an innovative financing mechanism . One of them is through EFT.”
Find examples
The success of EFT in promoting environmental improvement has been found in several countries. Jatna Supriatna, Executive Director of the Indonesian Science Fund (DIPI) said, India is a progressive country in implementing EFT.
In fact, every state in India is competing to increase forest cover so that hard work results in fiscal flows from the central government. “Because the fiscal there is forest-based.”
Inevitably, India has high forest cover. This, he said, is also an attraction for the carbon offset scheme which is currently being looked at as part of climate change mitigation.
Unfortunately, the same scheme is not applied to liver. In fact, there has been a lot of literature saying that this implementation can work.
” This biodiversity offset is challenging , more complicated than carbon. It can also go hand in hand with ecological-based fiscal transfers,” said Jatna.
Overcome the decline
The hope is that EFT can be a solution to the decline in biodiversity in the world and in Indonesia. Budi Setiadi Daryono, Chair of the Indonesian Biology Consortium (Kobi) said the liver population had decreased by 69% during 1970-2018. He referred to WWF’s Living Planet Report 2022 data.
The report also mentioned that there was a decline in Asia Pacific reaching 55%. “We know the heart of Southeast Asia is Indonesia. In any field, from human population to biodiversity. Here, there is a sharp drop in liver and the damage is happening before our eyes,” said Budi.
Erik said, the 2045 Bappenas projection mentions the potential for decreased forest cover and reduced habitat for key species. “That is if we still implement business as usual . “
The key species that have the potential to decline include the Sumatran orangutan 22%, the Bornean orangutan with three subspecies 21%, the Sumatran elephant 59%, the Kalimantan elephant 4%, the Sumatran tiger 20%, the Javan rhinoceros 37%, the Javanese gibbon 54%, the anoa 24% to the babirusa 35%.
He cited data from the 2019 Interngovernmental Science Policy Platform on Biodiversity and Ecosystem Services (IPBES) which said that around 1 million plant and animal species were facing the threat of extinction. “Loss of liver can threaten human health and ecosystem services.”
Joko Tri Haryanto, an expert policy analyst at the Fiscal Policy Agency (BKF) at the Ministry of Finance, hopes that EFT can be a solution to turn biodiversity into a regional income generator . So far, he said, the biodiversity and conservation sectors have always been seen as costs.
“If the regions are successful in managing biodiversity, it could become an income generator and a fiscal transfer from the center. Others can also compete to protect biodiversity in their respective regions.”
Cooperation of the parties
To implement liver-based EFT, it takes hard work from various parties. Joko said, related ministries and agencies and academics must work together to overcome technical issues first.
“The liver is large and wide. We must first define what is heart? Don’t let there be different views,” said Joko.
Technically, he said, academics have done a lot of studies and have even made a biodiversity index . Next, create indicators of biodiversity which need to be improved to become a reference for regional success in receiving EFT benefits.
These indicators, he said, need to be linked to policy instruments for EFT implementation.
“So, theory and policy must be connected . There is no policy that appears suddenly without a good theoretical basis.”
These indicators related to biodiversity also need to be synergized with the handling of climate change in the regions. Because, said Joko, these two things influence each other.
“After all, the climate change EFT has been settled and the achievement is fast. So this heart should also be able to connect here.”
From the government side, there are at least four things in general that must be matured to implement EFT, namely, regulatory commitments, institutions, business models, as well as incentives and disincentives.
In addition, a road map for the protection and management of liver in each region is needed to make indicators of achievement of liver-based EFT clear.
“This is a living document , yes. So it can be developed and evaluated,” said Joko.