Climate Change Assessment

Disaster Resilience Improvement Program (RRP INO 54117-001)

CLIMATE CHANGE ASSESSMENT

I. BASIC PROJECT INFORMATION

Project Title: Indonesia: Disaster Resilience Improvement Program (DRIP) Contingent Disaster Financing (CDF) Loan

Project Cost: $500.0 million Location: Indonesia

Sector: Finance, Public Sector Management

Theme: Inclusive economic growth; Environmentally sustainable growth

Program Background. The proposed program will support policy actions in disaster risk Description: management (DRM) and health services, and provide a source of CDF for timely disaster response, early recovery activities and health-related emergencies. It will help manage the fiscal risk arising from disasters triggered by all types of natural hazards and pandemics. ADB will only provide financing under the facility following a natural hazard event or health emergency that occurs during the facility availability period and leads to a national or subnational declaration of a state of disaster or other qualifying trigger in Indonesia; or at the end of the facility availability period if all conditions for exercise of the deferred disbursement option have been met. The policy actions will strengthen climate and disaster resilience of Indonesian institutions and communities and the government’s response to pandemics through three reform areas.

Reform area 1: Policy and institutional arrangements for disaster risk management. Under this reform area, the government strengthened institutional policies and action plans and adopted its RPJMN 2020–2024, which identifies specific climate resilience, disaster risk management, and gender goals, indicators and targets. Following a government regulation mandating the tagging of climate-related budgets at the subnational level, a group of 4 provinces and districts embarked on climate budget tagging projects. The government, led by the Ministry of Finance (MOF), has embarked on a plan, with the help of ADB and other development partners, to ensure that more subnational budgets are climate-tagged in the medium-term. Climate budget tagging will strengthen public financial management, allowing the government to plan, identify, prioritize and report climate-related expenditures, identify funding gaps and under- resourced priorities in the RPJMN, and is a key element in mobilizing financing through green bonds.

Policy and institutional arrangements for health-related emergencies, including social protection. The government institutionalized action plans that provide financial and human resources to respond to pandemics. First, to promote effective coordination of the government’s response and its efforts to prevent and mitigate the COVID-19 pandemic at national and subnational levels, the government established the Task Force for the Acceleration of the Handling of COVID-19, which directly reports to the President of Indonesia. It is led by the head of BNPB, and includes key stakeholder agencies such as the MOH, the Indonesian National Police, the Indonesian National Army, the Ministry of State-owned Enterprises, the Ministry of Human Development and Culture, the Ministry of Public Works and Housing (MPWH), regional governments, and the Ministry of Women's Empowerment and Child Protection (MOWECP). Second, led by the MOH, the government strengthened pandemic and epidemic reporting capacity across government agencies, by issuing guidelines for a single reporting system, which integrates disaggregated data from hospitals, provinces, and the MOH Centre for Data and Information. Strengthened reporting will improve case management and data 2

transparency, and elicit appropriate levels of government intervention and public response. To standardize testing protocols and processes, the government issued guidelines for testing and treatment for COVID-19, future pandemics and disease outbreaks. To strengthen social protection measures to support women in the workplace during the COVID-19 pandemic, the MOWECP issued Regulation No. 1 of 2020, which outlines procedures for the protection of female workers. The MOWECP also allocated $19.5 million budget for referral services to women victims of violence and to children in need of special protection, and strengthened its provision of essential services to women, children, the elderly and migrant workers during the COVID-19 pandemic. Finally, the MOH adopted Decrees no. 214, 216 and 234 of 2020, to establish a national laboratory network and increase the number of laboratories to improve the country’s testing capacity as a prerequisite to normalizing the economy.

Reform area 2: Resilience of physical assets to disaster and climate risks. Ensuring the resilience of infrastructure and coordinating disaster response across key ministries, while considering the gendered impacts of disaster and climate change, are imperative to reduce the cost of replacing or restoring public infrastructure. To promote protection to vulnerable groups following disasters and effective coordination within the MPWH and across government agencies involved in disaster response, the MPWH revised its Disaster Committee decree (Keputusan Menteri PUPR No. 1176/KPTS/M/2019). This decree assigned key personnel and task forces to critical disaster response roles such as Chief of the Disaster Committee, Disaster Task Force Secretary, and provided resource coordination for highways and provinces. Finally, to account for and enhance disaster and climate resilience of water resource infrastructure, following the ADB-supported development of a national asset management inventory and upgrading of the information system platform for irrigation infrastructure,1 the MPWH signed a memorandum of understanding with ADB, completed key milestones for similar projects for river and water supply infrastructure, and established 136 community-based disaster management organizations in Banten and Maluku provinces, with women holding 20% of managerial positions.

Reform area 3: Disaster risk and pandemic response financing. Building resilience through insured infrastructure, improved healthcare, and targeted social spending, complemented by the use of financial mechanisms, ensure effective disaster and pandemic preparedness and response. 2 In 2019, the government, supported by the World Bank, established a state-owned asset indemnity insurance pilot project to insure the MOF’s buildings against disasters. Following this, the government expanded the scope of the public asset insurance program to include the participation of two additional government agencies: the National Public Procurement Agency (Lembaga Kebijakan Pengembangan Barang/Jasa Pemerintah or LKPP) and the National Government Internal Auditor (Badan Pengawasan Keuangan dan Pembangunan or BPKP). For its COVID-19 response, the government announced a $45.7 billion emergency stimulus package focusing on: (i) health; (ii) social protection; and (iii) economic assistance to businesses and local government programs. To support this, the government adjusted its fiscal rules by relaxing the state budget deficit policy to allow the fiscal deficit to exceed 3% of GDP for three fiscal years.

The impact is aligned with the continued focus on improving infrastructure and connectivity in the National Medium-Term Development Plan (RPJMN) 2020–2024 (footnote 3)–disaster and climate resilience enhanced; and health services improved, including advancement towards universal health coverage.

1 ADB. 2017. Indonesia: Integrated Participatory Development and Management of Irrigation Program. Manila. 2 Climate Change Assessment (accessible from the list of linked documents in Appendix 2).

Context of Vulnerability. Indonesia is the fourth largest greenhouse gas emitting country in the world and is projected to be one of the first countries in the world to experience ‘climate departure’.3 Indonesia is highly exposed to climate change risks due to its island geography and large coastal cities, with over 80,000 kilometers of coastline and 42 million people living less than 10 meters above sea level.4 Rising seas are projected to submerge 2,000 of the country’s smaller islands by 2050. Climate-related extreme events such as landslides, floods, and wildfires have been increasing in frequency and magnitude. Since 1990, Indonesia has experienced an average of 289 significant disasters per year. Much of the existing infrastructure is inadequate to cope with the adverse impact of climate change and the associated increase in natural hazards. Indonesia is exposed to a wide range of natural hazards — earthquakes, tsunamis, volcanic eruptions, landslides, floods, and droughts. Indonesia has experienced a succession of deadly earthquakes in the past 2 years alone. In September 2018, a localized tsunami hit the city of Palu. This was followed by a shallow, large magnitude 7.5 earthquake which shook Central Sulawesi, and in December of 2018, another deadly tsunami caused by a volcanic eruption struck Sunda Strait. In November 2019, a powerful magnitude 7.1 earthquake hit near the Maluku Islands and North Sulawesi. Disasters caused by natural hazards cause significant loss of life and destruction to physical assets. Between 2005 and 2017, disasters affected the lives of more than 11 million Indonesian people. Disaster risk modeling estimates indicate that, over the longer term, Indonesia experiences an average annual loss of around $9.2 billion as a consequence of natural hazards, equivalent to 0.9% of 2017 gross domestic product (GDP), mostly from floods, volcanoes and earthquakes. Out of the six types of disasters that affect the Indonesia, three are climate-related (i.e., climatological, hydrometeorological and meteorological) while the remaining three are geophysical, technological and biological (see section VI).5

Climate change may indirectly affect the COVID-19 response, as it undermines environmental determinants of health, and places additional stress on health systems. More generally, most emerging infectious diseases, and almost all recent pandemics, originate in wildlife, and there is evidence that increasing human pressure on the natural environment may drive disease emergence. Strengthening health systems, improved surveillance of infectious disease in wildlife, livestock and humans, and greater protection of biodiversity and the natural environment, should reduce the risks of future outbreaks of other new diseases.6

Vulnerable Target Beneficiaries. The program will contribute towards the annual cost of disasters and health emergencies to the Indonesian economy. Damage of these disasters (caused by natural hazards and pandemics) have contributed to poverty. Low income households will benefit from more climate and disaster resilient public assets, efficient recovery of public assets, critical services in case of climate-related disasters, and improved monitoring and reporting capacities and disaster insurance coverage.

Program’s climate response. The CDF is partially formulated to address climate and disaster related issues and challenges. The proposed Disaster Resilient Improvement Program (DRIP) will provide rapid access to resources to enable the government to initiate disaster response and early recovery efforts with minimal delay, mitigating a disaster’s economic and social impact. Reforms supported by the program will improve

3 https://www.adb.org/publications/climate-change-vulnerability-poverty-indonesia. 4 USAID. 2017, Climate Risk Profile, Indonesia, Fact Sheet. Washington, DC. 5 EM-DAT. Accessed on 15 April 2020. The International Disaster Database: Indonesia. Source: https://www.emdat.be/ 6 WHO. Accessed on 15 April 2020. Q&A on Climate Change and COVID-19. Source: https://www.who.int/news- room/q-a-detail/q-a-on-climate-change-and-covid-19.

preparedness at both national and local levels and ensure adequate and timely technical and financial resources provided in the events of natural hazards. The reforms will mainstream climate and disaster resilience in infrastructure design and disaster risk reduction initiatives at the local and national levels, thereby strengthening resilience against natural hazards. Climate budget tagging will be strengthened to keep track of climate expenditures of national government agencies and provincial authorities. The program also helps the national government agencies strengthen financial resilience of public assets against disasters by strengthening the public asset insurance program. The reforms also contribute to reduce costs of natural hazard insurance via risk diversification, economies of scale, and reduced reinsurance requirements, as well as financial resilience and knowledge sharing benefits.

Statement of Intent. The Government of Indonesia recognizes the adverse impacts of climate change in the country and considers this program a valuable vehicle to strengthen the country’s resilience to climate change. The National Medium-Term Development Plan 2020–2024 identifies specific climate resilience and disaster risk management goals, indicators and targets at national and subnational levels.

II. SUMMARY OF CLIMATE CHANGE FINANCE

ADB will provide a loan amounting to $500 million to support the program. As loan proceeds are not mapped per policy action under the three reform areas, climate adaptation and mitigation finance corresponding to the policy actions is estimated through a proportionality approach.7 The $500 million is assigned equally to each of the 23 policy actions ($21.7 million each) and then each allocation is pro-rated corresponding to the climate adaptation elements of each policy action. 5 of the Prior Actions (PA) by 2020 and 7 Post-Program Partnership Framework (PPPF) Targets from August 2020–August 2023 have climate resilience elements (see Table 2). Climate adaptation finance amounts to $45.57 million and climate mitigation finance is zero. ADB will finance 100% of climate adaptation costs.

Table 1: Summary of Climate Change Finance

Project Financing Climate Finance

Amount Adaptation Mitigation Source ($ million) ($ million) ($ million) Asian Development Bank

Ordinary capital resources (regular loan) 500.00 45.57 0.00

Source: Asian Development Bank.

III. CLIMATE RISK SCREENING AND ASSESSMENT

A. Methodology

A literature review of Indonesia’s Climate Change Sectoral Roadmap and the Climate Risk Country Profile of Indonesia8 highlights the changes in temperature, rainfall, sea level rise, and other climate extreme events make the country vulnerable to climate change and variability.9 Climate projections presented in

7 As per Guidance Note on Counting Climate Finance at ADB_Oct 2016 and 2018 Joint Report on Multilateral Development Banks’ Climate Finance. 8 World Bank and ADB. 2019. Climate Risk Country Profile: Indonesia. Unpublished. 9 Republic of Indonesia. 2009. Indonesia Climate Change Sectoral Roadmap (ICCSR): Synthesis Report. Source:

this document are derived from datasets made available on the World Bank’s Climate Change Knowledge Portal (CCKP), unless otherwise stated. These datasets are processed outputs of simulations performed by multiple General Circulation Models (GCM) developed by climate research centers around the world and evaluated by the IPCC for quality assurance in the CMIP5 iteration of models (for further information see Flato et al., 2013).10 Collectively, these different GCM simulations are referred to as the ‘model ensemble’. Due to the differences in the way GCMs represent the key physical processes and interactions within the climate system, projections of future climate conditions can vary widely between different GCMs. This is particularly the case for rainfall related variables and at national and local scales.

B. Climate Variability and Climate Change Projections for Indonesia

General Overview. Indonesia’s climate is tropical, with the highest rainfall occurring in its low-lying areas. The mountainous regions experience cooler temperatures. The wet season occurs between November and April, leaving May through October typically dry. There is little season-by-season variation in temperature and relatively little variation by elevation (averaging 23oC in the mountainous areas and 28oC in the coastal areas). There is more variability in precipitation by elevation: the average annual rainfall in the lowlands around 1800–3,200mm compared with the mountainous regions, where it can reach up to 6,000mm.11 The climate of Indonesia is mainly influenced by the El Nino Southern Oscillation (ENSO), where drier conditions are experienced during El Niño events and wetter conditions during La Nina events.12

Temperature variability. Indonesia’s mean annual temperature has increased by 0.3oC since 1900,13 with an annual temperature rise of 0.04oC per decade recorded during 1985–2015.5 Since 1960, hot days and nights have increased by 88 and 95 per annum, respectively, especially during the summer months of July–September.5 Observational climate data generally relates to Sumatra and Borneo, with limited data availability for the country’s archipelago.14

Future temperature projections. Projections for annual average temperature rise for Indonesia from the CCKP model ensemble are less than the global average: 3oC compared to 3.7oC under the RCP8.5 emissions pathway by 2080–2099. Under the same pathway and time-period, the annual averages of monthly maximum and minimum temperatures are projected to increase greater than annual average temperatures, 3.8oC and 3.5oC, respectively. Warming projections suggest a rise of ambient temperatures from approximately 26.5oC towards 29-30oC, significantly increasing the frequency of days >30oC. However, all these projections are distorted by the inability of current global climate models to distinguish between ocean and land cover over Indonesia’s smaller islands. The KNMI Climate Explorer, which can interpolate to finer spatial scales, suggests that significantly higher rates of warming may be experienced in Indonesia’s inland regions15. For example, warming by the end of the century under RCP8.5 approaches 4oC over central regions of Kalimantan and Sumatra. As such, adaptation planning should take account of potential higher temperatures rises. (See footnote 14).

10 Flato, G., Marotzke, J., Abiodun, B., Braconnot, P., Chou, S. C., Collins, W. Rummukainen, M. (2013). Evaluation of Climate Models. Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 741–866 11 USAID. 2015. Climate Risk Profile: Indonesia Fact Sheet. URL: https://www.climatelinks.org/resources/climate-risk- profile-indonesia [accessed 20/12/2018]. 12 Polade, Suraj & W Pierce, David & Cayan, Daniel & Gershunov, Alexander & Dettinger, Michael. (2014). The key role of dry days in changing regional climate and precipitation regimes. Scientific reports. 4. 4364. 10.1038/srep04364. 13 Case, Michael & Spector, Emily. (2007). Climate Change in Indonesia Implications for Humans and Nature. WWF. URL: http://wwf.panda.org/?118240/ [accessed 20/12/2018] 14 Office, Met & Gosling, Simon & Dunn, Robert & Carrol, Fiona & Christidis, Nikos & Fullwood, John & de Gusmao, Diogo & Golding, Nicola & Good, Lizzie & Hall, Trish & Kendon, Lizzie & Kennedy, John & Lewis, Kirsty & McCarthy, Rachel & Mcsweeney, Carol & Morice, Colin & Parker, David & Perry, Matthew & Stott, P & Warren, Rachel. (2011). Climate: observations, projections and impacts. 15 KNMI Climate Explorer CMIP5 projections. Available at: https://climexp.knmi.nl/start.cgi

Rainfall variability. While precipitation trends vary across the country, it can be generally stated that the lowest rainfall is found during the dry season, June to September, when average monthly rainfall in June and July is around 160–180mm. The months with the highest rainfall, associated with monsoons, occur between October to May. On average there is 300mm of rainfall during the May and November months, approximately twice that of the driest months. One study observed the areas Kalimantan, Jawa, Sumatra and Papua experiencing increased rainfall between 1998 and 2010, whereas along the western and southern coast of Sumatra, eastern Jawa, southern Sulawesi, Maluku Islands, western Papua and Bali Island saw a decrease in rainfall. (See footnote 14.)

Future rainfall projections. Climate model projections of future rainfall are more uncertain than temperature. The CCKP model ensemble suggests increases in median annual rainfall under all emissions pathways. However, there is large uncertainty in this estimate. Based on the CCKP data, it shows a slight increase in precipitation levels under all emissions pathways by 2080–2099 ; for example, median annual precipitation is projected to increase by 7% under RCP6.0 pathway and 11% under RCP8.5 pathway, from the historical baseline median of 2884mm. (See footnote 14)

While considerable uncertainty clouds projections of local future precipitation changes, some trends are evident. The intensity of sub-daily extreme rainfall events appears to be increasing with temperature, a finding supported by evidence from different regions of Asia.16 However, as this phenomenon is highly dependent on local geographical contexts, research specifically focusing on Indonesia is required to understand impacts to the country. Downscaling studies for Indonesia suggest considerable variability and uncertainty regarding spatial and temporal distribution. For example, one points to western Indonesia experiencing a significantly increased number of dry days by 2060–2099 under RCP 8.5 emissions pathway.17 Another study finds rainfall trajectories in 2060 in Lombok and Sumbawa islands to be uncertain between December and February, decreasing up to 10% between March and May, and little change for other seasons.18 The CCKP multi-model ensemble data for the spatial variation of average annual precipitation change in Indonesia for 2080–2099 under the RCP8.5 emissions pathway show that the central region of Kalimantan and eastern region of Irian Jaya show the greatest increase in precipitation, with the western region of Sumatra showing the least. (See footnote 14).

Extreme Climatic Events. As temperature and precipitation changes in the future, Indonesia will be at risk to the following climate related hazards: (i) floods [e.g., by 2030 is expected to increase the annually affected population by 400,000 people, and urban damage by $6.1 billion under the RCP8.5 emissions pathway (AQUEDUCT Scenario B)]; (ii) tropical cyclones; (iii) heat waves (e.g., extreme heatwave as often as once every two years by the end of the 21st century under the RCP 8.5 emissions pathways);19 (iv) drought and fire (e.g., annual probability of experiencing a year with a severe drought by 2080–2099 roughly doubling from 4% to 9% under RCP 2.6 and RCP 8.5 emissions pathways and with El Niño events,

16 Westra, S., Fowler, H. J., Evans, J. P., Alexander, L. V., Berg, P., Johnson, F., Kendon, E. J., Lenderink, G., Roberts, N. (2014). Future changes to the intensity and frequency of short-duration extreme rainfall. Reviews of Geophysics, 52, 522–555. 17 Polade, Suraj & W Pierce, David & Cayan, Daniel & Gershunov, Alexander & Dettinger, Michael. (2014). The key role of dry days in changing regional climate and precipitation regimes. Scientific reports. 4. 4364. 10.1038/srep04364. 18 McGregor, J.L., Nguyen, K.C., Kirono, D.G. and Katzfey, J.J., 2016. High-resolution climate projections for the islands of Lombok and Sumbawa, Nusa Tenggara Barat Province, Indonesia: Challenges and implications. Climate Risk Management, 12, 32-44. 19 Russo, Simone & Dosio, Alessandro & Graversen, R & Sillmann, Jana & Carrao, Hugo & Dunbar, Martha & Singleton, Andrew & Montagna, Paolo & Barbosa, Paulo & Vogt, Jürgen. (2014). Magnitude of extreme heat waves in present climate and their projection in a warming world. Journal of Geophysical Research Atmospheres. 19. 12500–12512. 10.1002/2014JD022098.

which are expected to increase in frequency and intensity through warmer global temperatures); 20, 21 (v) Cyclones and storm surge (e.g., Increased sea-surface temperatures associated with climate change are projected to increase tropical cyclone intensity);22 (vi) Sea Level Rise (e.g., average Sea Surface Temp in Indonesian waters is projected to increase by as much as 0.65°C in 2030, 1.10°C in 2050, 1.70°C in 2080, and 2.15°C in 2100 an average; SLR of 0.6 cm/year to 0.8 cm/year has been estimated. (footnote 15).

C. Sensitivity of Program Component(s) to Climate Change

Low climate risk. The impact of climate change on the proposed program, its intended outcome and the policy actions it supports, is low. However, the target assets, resources and beneficiaries of the CDF Facility are highly vulnerable to the impacts of climate-related disasters caused by natural hazards.

Vulnerable Public Sector Stakeholders and Resources. The CDF Facility targets public institutions (i.e., BNPB, MOF DG Public Asset Management, LKPP, BPKP, MOEF, MOHA, BPJS, MOH, Ministry of Human Development and Culture, the Indonesian National Police, the Indonesian National Army and regional governments), priority regional, subnational government, resources (e.g., finance, water), and public assets and infrastructure (e.g., flood and irrigation infrastructure). These institutions and assets are highly exposed and vulnerable to the impacts of climate change and variability. The CDF Facility partially addresses these vulnerabilities and enables the implementation of climate resilience measures through the policy actions.

IV. PROGRAM’S CONTRIBUTION TO CLIMATE RESILIENCE

The CDF Facility is prepared in partial support of climate-related disaster resilience. The Facility supports climate-smart disaster risk management approaches23 wherein it essentially plans and implements climate resilience as a component of DRR in the budget of national agencies, regional and subnational government units. This supports increased effectiveness and sustainability of both adaptation and DRR approaches.24 This also supports the synergy of climate resilience and DRR especially in the Indonesia where 68% of the people are affected or impacted (i.e., deaths, injuries, lost homes) by climate-related disasters caused by natural hazards. The identified policy actions will enhance resilience of the Indonesian Government agencies, regional and subnational governments in protecting public assets and resources and delivering timely services (e.g., disaster response and early recoveries) and resources (via the Contingent Disaster Financing Facility) in times of climate-related or other disasters.

20 Naylor, Rosamond & Battisti, David & Vimont, Daniel & Falcon, Walter & Burke, Marshall. (2007). Assessing Risks of Climate Variability and Climate Change for Indonesian Rice Agriculture. Proceedings of the National Academy of Sciences of the United States of America. 104. 7752-7. 10.1073/pnas.0701825104. 21 King, Andrew & Karoly, David & Van Oldenborgh, Geert Jan. (2016). Climate Change and El Niño Increase Likelihood of Indonesian Heat and Drought. Bulletin of the American Meteorological Society. 97. S113-S117. 22 Retno Gumilang Dewi, Rizaldi Boer, Ari Wibowo, Suryahadi, Muhammad Ardiansyah, Agus Buono, Rini Hidayati, Feril Hariati, Prihasto Setyanto, Elza Surmaini, Arien Heryansyah, Kiki Kartikasari, Idat G. Permana, Tania June, Yanuar J. Purwanto, and Akhmad Faqih. 2010. Indonesia Second National Communication Under The United Nations Framework Convention on Climate Change (UNFCCC). URL: http://unfccc.int/files/national_reports/non- annex_i_natcom/submitted_natcom/application/pdf/indonesia_snc.pdf [accessed 17th December 2018] 23 International Federation of Red Cross and Red Crescent Societies (IFRC). Accessed on April 2020. Literature Review on Aligning Climate Adaptation (CCA) and Disaster Risk Reduction (DDR). Source: https://ifrcgo.org/- africa/img/disaster-law/resources/20191208_CCA_DRR_Review_.pdf 24 Eldis. Accessed on 14 April 2020. TearFund: Linking Climate Change Adaptation and Disaster Risk Reduction. Source: https://eldis.-org/document/A48241

Table 2: Policy actions and their contribution to climate resilience

Estimated Target Adaptation Policy Action25 Adaptation Finance Justification Climate Risk Costs ($ million)

Policy Reform Area 1: Policy and institutional arrangements for disaster risk management (DRM) and health-related emergencies

PA1 adaptation component pertains to the adoption of the Government of climate resilience management goals, indicators, and targets at national and subnational levels as 2.17M prescribed under the National Development Plan. Strengthening policy making and coordinating bodies for PA1 [(500/23) * 10%] climate related disasters increases capacity of government to prepare, plan, and respond to climate extreme events.

CC adaptation finance claimed is 10% of allocation (i.e., climatological, hydrological, meteorological).26 PA2 is a climate resilience measure. The Government's adoption of climate budget tagging policy at subnational 21.7M government level, with 9 strategically selected subnational PA2 governments climate-tagging their budgets, ensures [(500/23) * integration of appropriate climate measures that would guide 100%] govt towards climate resilient development. Extreme climate CC adaptation finance claimed is 100%.of allocation. events PPPF1 climate component pertains to the Government's policy to continue efforts to expand its climate change budget tagging policy. This enhances the capacity of the national and sub-national entities to track and monitor effectively the climate related budget expenditures in support of 27 2.17M implementing national climate policies across all sectoral development plans, programs and projects.28 The inclusion of PPPF1 [(500/23) * DRR as part of the climate budget tagging contributes to 10%] enhancing climate budgeting systems and also supports climate smart DRR initiatives of INO; 62% of disasters are disasters triggered or caused by climate related hazards. (footnote 27)

CC finance claimed is 10% of allocation (footnote 27).

PPPF2 2.17M PPPF2 is a climate resilience measure. The conduct of a

25 See Section VI for details on prior actions (PA) and Post-Program Partnership Framework (PPPF) Targets. 26 In Indonesia, 62% of people affected or impacted (i.e., deaths, injuries, lost homes) by disasters are due to climate linked natural hazards (i.e., hydrological (1953-2020), climatological (1966-2019), meteorological (1956-2017)) for the period 1953 to 2019. (See Table on Analysis of Disasters in Indonesia in Section VII). Source: EM DAT international Disasters Data base: Indonesia). The computed climate adaptation finance figures are based on a conservative proportionality approach whereby it is assumed that 10% of the value of those components of a policy action pertaining to DRR of climate-linked natural hazards are directly attributable to climate adaptation. 27 Climate mitigation policy: National Action plan on GHG Emission Reduction (RAN GRK presidential decree issued of 2011; Climate Adaptation Policy: RAN API: National Action Plan on Climate Adaptation to increase resilient on economy, livelihood, ecosystem and territory (2014). 28 INO PBL Fiscal and Public Expenditure Management Program, Subprogram 3 (RRP INO 50168-003)

Estimated Policy Target Adaptation 29 Adaptation Finance Justification Action Climate Risk Costs ($ million)

[(500/23) * comprehensive assessment that estimates damage and 10%] losses, and identifies the needs of the affected population following disasters, enables government and affected urban communities to enhance the adaptive capacity and resilience of these climate vulnerable communities and infrastructure in urban areas.

CC adaptation finance claimed is 10%.of allocation

Sub-total 28.21

Reform area 2: Resilience of physical assets to disaster and climate risks PA8 climate element pertains to the enhancement of inter- agency coordination on disasters which include disasters caused by climate-related natural hazards. The improved inter-agency coordination enhances the timely coordinated response to deliver vital services (e.g., access to clean water, 2.17M sanitation and temporary shelter facilities) of vulnerable PA8 [(500/23) * communities affected by the unavoidable impacts of disasters 10%] caused by climate related natural hazards across different geographical areas. These measures help increase the adaptive capacity and resilience of affected vulnerable communities. 30,31 (see Footnote 27).

CC adaptation finance claimed is 10% of allocation.

Extreme PA9 climate elements pertain to the development of the climate national asset management inventory and improvements to events the information system platform for irrigation infrastructure. These systems enhance the capacity of the government to: (i) identify and monitor performance of critical and vulnerable 2.17M infrastructure (e.g., irrigation, water supply, dams) and PA9 [(500/23)* resources (i.e., water, rivers) and their vulnerability to climate 10% impacts; and (ii) timely respond to urgent needs in post- disaster local economic recovery and reconstruction of assets. These measures help increase the resilience of climate vulnerable infrastructure and resources.32

CC adaptation finance claimed is 10% for climate supportive management measures. 2.17M PPPF7 climate element pertains to the upgrade of MPWH’s PPPF7 Disaster Response Management System, which will integrate [(500/23)* location-specific data on public infrastructure, as well as 10%]

29 See Section VI for details on prior actions (PA) and Post-Program Partnership Framework (PPPF) Targets. 30 ADB. 2018. Strengthening Resilience Through Social Protection Programs Guidance Note. Source: https://www.adb.org/sites/default/-files/institutional-document/412011/resilience-social-protection-guidance-note.pdf 31 This measure on integrated approaches is also aligned with the INO INDC (page 1, para 5; page 2, para 4; page 3 para 3) and the NAP CCA (page 29, Adaptation Agenda). 32 The following are documents that substantiate PA9: (i) MoU on Proposed Loan 51157-INO: Enhanced Water Security Investment Project (EWSIP); (ii) MoU between ADB and GoI on Loan 3440 INO – Flood Management In Selected River Basin Sector Project; (iii) MPWH 4th Semi Annual Progress Report on Integrated Participatory Development and Management of Irrigation Program.

Estimated Policy Target Adaptation 33 Adaptation Finance Justification Action Climate Risk Costs ($ million)

MPWH’s staff, equipment and material availability. This contributes to climate resilience; increased capacity of government enables effective planning, management, and timely response to disasters caused by climate-related natural hazards.

CC adaptation finance claimed is 10% of allocation (footnote 27). PPPF 8 climate element pertains to the climate resilience measures that will be integrated into the gender-responsive 2.17M flood risk management master plans that will be prepared for PPPF8 6 river basins; climate adaptation measures would cover both [(500/23) * engineering and non-engineering measures for flood risk 10%] control and resilient infrastructure amongst all 6 master plans.

CC adaptation finance claimed is 10% of the allocation.

PPPF10 climate element pertains to the development of a manual which will define standards for building recovery 2.17M procedures relative to climate related hazards experienced in PPPF10 [(500/23) * the country. This component will strengthen climate proofing 10%] measures. CC adaptation finance claimed is 10% of the allocation (footnote 27). PPPF11 climate element pertains to the enhancement of the Government’s capacity to provide timely actionable information and emergency road response in relation to impacts of extreme climate events on the roadways for the 2.17M benefit of various road users. The non-engineering adaptation PPPF11 [(500/23) * measures cover the development of a comprehensive road 10%] information system that records live information on disasters such as landslides, floods and earthquakes, and the establishment of an emergency road response system.

CC adaptation finance claimed is 10% of the allocation (footnote 27). Sub-total 13.02M Reform area 3: Disaster risk and pandemic response financing PA10 climate element pertains to the provision of expanded coverage of indemnity insurance against disasters caused by climate-related natural hazards for LKPP and MOF DG Public 2.17M Asset Mgt. The creation of a risk transfer facility which includes impacts of extreme climate events enhances PA10 [(500/23)* Extreme government’s capacity to manage vulnerable public assets. 10%] climate event Climate adaptation finance is assumed for 10% in support of insurance cover for climate linked disasters (footnote 27).

2.17M PPPF12 climate component pertains to the strengthening of PPPF12 subnational government's capacity to respond to disasters [(500/23)* caused by climate-related natural hazards. The adaptation 10%] component pertains to the enhanced capacity of subnational

33 See Section VI for details on prior actions (PA) and Post-Program Partnership Framework (PPPF) Targets.

Estimated Target Policy Adaptation Climate Adaptation Finance Justification Action34 Costs Risk ($ million) government agencies to administer public assets and fiscal transfers via provision of sustainable and efficient disaster risk financing mechanisms and asset at risk identification and evaluation.

Climate adaptation finance is assumed for 10% in support of parametric insurance for typhoons (footnote 27). Subtotal 4.34M Total 45.57M

V. PROGRAM’S CONTRIBUTION TO CLIMATE MITIGATION

Mitigation Estimated GHG Emissions Estimated Mitigation Costs Mitigation Finance a Activity Reduction (tCO2e/year) ($ million) Justification N.A. N.A. N.A. Subtotal N.A. N.A.

GHG = greenhouse gas, tCO2e = tons of carbon dioxide equivalent. a Energy savings/year x emission factor = GHG emissions reduction.

VI. POLICY ACTIONS UNDER THREE REFORM AREAS

Post-Program Partnership Framework Prior Actions (PA) (by September 2020) Targets (PPPF) from September 2020–September 2023 Reform area 1: Policy and institutional arrangements for disaster risk management (DRM) and health-related emergencies PA1: 1. To improve disaster resilience and climate change PPPF1: To better track climate change adaptation policymaking and coordination, the government investment and spending and strengthen adopted its National Medium-Term Development Plan, public financial management, (a) 10 additional Rencana Pembangunan Jangka Menengah Nasional subnational governments will climate- and (RPJMN) 2020-2024, which identifies specific climate gender-tag their budgets; and (b) the resilience and disaster risk management goals, indicators, government will adopt its DRR-tagging policy and targets, and gender commitments, at national and to track the DRR expenditures of national subnational levels. (BAPPENAS) government agencies.(MOF Fiscal Policy Agency, MOF DG Fiscal Balance, MOEF, MOHA) PA2: To enable informed climate change adaptation policy PPPF2: To support a comprehensive decisions and prioritize climate investments, the assessment that estimates damage and government introduced its climate budget tagging policy at losses and identifies the needs of the affected subnational level, and 4 subnational governments initiated population following disasters, the government climate budget tagging. (MOF Fiscal Policy Agency, MOF will develop additional PDNA tools for urban DG Fiscal Balance, MOHA) areas. (BNPB) PA3: To implement the government’s efforts to prevent and PPPF3: To strengthen testing capacity, build mitigate the COVID-19 pandemic and future pandemics, human resource capacity in the national MOH adopted Decree no. 214, Decree no. 216, and Decree laboratory network, and monitor the intensity no. 234 of 2020, establishing a national laboratory network and spread of pandemics, the government will and increasing the number of laboratories for testing. implement its nationwide gender-responsive (MOH) testing policy, which includes surveillance measures, and prepare a national vaccine strategy. (MOH DG Disease Control and Prevention, MOH DG Research and Development Biomedical Centre)

34 See Section VI for details on prior actions (PA) and Post-Program Partnership Framework (PPPF) Targets.

Post-Program Partnership Framework Prior Actions (PA) (by September 2020) Targets (PPPF) from September 2020–September 2023 PA4: To promote effective coordination of the government’s PPPF4: To strengthen pandemic and response, and its gender-sensitive efforts to prevent and epidemic preparedness, the government will mitigate the COVID-19 pandemic at national and prepare investment plans to incorporate the subnational levels in the medium-term, the government cost of priority interventions for health established The Task Force for the Acceleration of the emergencies to be financed in every budget Handling of COVID-19 (Presidential Decree no. 7 of 2020) cycle, and will map the interventions to on 13 March 2020, further revised on 20 March expected results in the near to medium term. (Presidential Decree no. 9 of 2020) and on 13 April (MOH Bureau of Planning, MOH Centre for (Presidential Decree no. 12 of 2020), as a non-natural Health Crisis) disaster. (BNPB) PA5: To reduce the vulnerability of women, children, the PPPF5: To strengthen regional cooperation on elderly and migrant workers during the COVID-19 pandemic, Pandemic response, in line with its the government (i) allocated $19.5 million for referral services commitments within the ASEAN, the to female survivors of intimate partner violence and to government will develop protocols and children in need of special protection; and (ii) strengthened its procedures for timely and transparent provision of essential services to these groups by developing reporting of COVID-19-related surveillance and implementing (a) gender-sensitive guidelines for information to the appropriate institution in protection of the elderly during the COVID-19 pandemic; ASEAN. (MOH) (b) specific protection guidelines for women with disabilities during the COVID-19 pandemic; (c) protocols for handling cases of violence against women during the COVID-19 pandemic; (d) a guide to breastfeeding during the COVID-19 pandemic; and (e) cross-sectoral protocols for the protection of women migrant workers during the COVID-19 pandemic. (MOWECP)

PA6: support women in the workplace during the COVID-19 pandemic and beyond, the Ministry of Women's Empowerment and Child Protection issued Regulation No. 1 of 2020, which outlines procedures for the protection of female workers. (MOWECP) PA7: To strengthen pandemic and epidemic reporting capacity across government agencies, the government issued guidelines for a single reporting system, integrating disaggregated data from hospitals, provinces, and the Centre for Data and Information. (MOH Centre for Data and Information) PA8: To standardize testing protocols and processes, the government issued guidelines to hospitals and the health system for testing and treatment for COVID-19, future pandemics, and disease outbreaks. (MOH DG Disease Control and Prevention)

Reform Area 2: Resilience of physical assets to disaster and climate risks PA9: To promote effective coordination within MPWH and PPPF6: ensure the gender responsiveness of across government agencies involved in disaster response, MPWH Decree No. 1176/ KPTS/M/2019 in and protection to vulnerable groups following disasters, disaster response planning and including access to clean water, sanitation, and temporary implementation, the government will assess shelter facilities, MPWH revised its Disaster Committee using checklists, the accessibility of sanitation decree (Keputusan Menteri PUPR No.1176/KPTS/M/2019) facilities, clean water, and temporary and and assigned key personnel and task forces to critical permanent housing to women, senior and disaster response roles such as Chief of the Disaster disabled citizens affected by disasters. Committee, Disaster Task Force Secretary, and resource (MPWH). coordination for highways and provinces. (MPWH) PA10: To account for and enhance disaster and climate PPPF7: To enable MPWH Disaster resilience of water resource infrastructure, the government Committee’s timely and effective response to signed an MOU to launch and completed key milestones for disasters, MPWH will upgrade its Disaster projects to develop the national asset management Response Management System to integrate

Post-Program Partnership Framework Prior Actions (PA) (by September 2020) Targets (PPPF) from September 2020–September 2023 inventory and upgrade information system platforms for location-specific data on public infrastructure river and water supply infrastructure, and established 136 as well as MPWH’s staff, equipment, and community-based disaster management organizations in material availability with information on two provinces with women holding approximately 20% of impacted infrastructure and population. managerial positions. (MPWH DG Water Resources) (MPWH Centre for Data and Information). PPPF8: To improve flood risk management and investment in resilient infrastructure across national government agencies, cities, municipalities. and provinces, the government will prepare gender-responsive flood risk management plans for 6 river basins. (MPWH DG Water Resources) PPPF9: To enhance earthquake resilience of government infrastructure, and to reduce the impact of natural hazards, the government will: (a) finalize the legal process to adopt proposed standards for seismic loading (SNI 1726) under the building code, for hospitals, universities and other government buildings; (b) finalize the legal process to adopt proposed standards for reinforced concrete structural design (SNI 2847); and (c) revise its technical standards for earthquake resilience of irrigation infrastructure. (MPWH DG Human Settlements, MPWH DG Water Resources) PPPF10. To improve the effectiveness of disaster recovery, the government will develop a manual, which defines standards for building recovery procedures relative to each type of natural hazard experienced in the country. (BNPB, MPWH DG Human Settlements) PPPF11: To improve the timeliness of recovery and reconstruction of national highways and bridges, the government will develop a comprehensive road information system, which records live information on disasters such as landslides, floods and earthquakes; and will develop a gender- responsive emergency road response system (MPWH DG Highways) Reform Area 3: Disaster risk and pandemic response financing PA11: Following the successful implementation of the state- PPPF12: To strengthen the fiscal resilience of owned asset indemnity insurance (BMN) pilot project to subnational governments to disasters insure MOF assets against disasters, the government triggered by natural hazards such as floods, expanded the scope of the public asset insurance program earthquakes, tsunamis and droughts, and to to include assets of two additional government agencies – eventually provide sustainable and efficient the National Public Procurement Agency (Lembaga disaster risk financing mechanisms for timely, Kebijakan Pengembangan Barang/Jasa Pemerintah or well-targeted and transparent post-disaster LKPP) and the National Government Internal Auditor recovery and reconstruction, the government (Badan Pengawasan Keuangan dan Pembangunan or will enhance the capacity of subnational BPKP). (MOF DG Public Asset Management) governments to administer public assets and manage fiscal transfers for post-disaster response, starting with identification and valuation of assets at replacement value. (MOF DG Public Asset Management) PA12: To support COVID-19 relief and recovery efforts, and to address the ongoing adverse impacts of the COVID-19 pandemic on vulnerable segments of society including

Post-Program Partnership Framework Prior Actions (PA) (by September 2020) Targets (PPPF) from September 2020–September 2023 women in particular, the government: (i) relaxed the state budget deficit policy which allows the fiscal deficit limit to exceed 3% of GDP for 3 fiscal years; and (ii) on 30 June 2020, more than doubled the size of its social assistance program by $7.1 billion, to $13.4 billion, comprising: $2.9 billion for the Kartu Sembako food assistance program which supports 96% women beneficiaries, 16% of whom are female-headed households; and $2.5 billion for the Family Hope Program which supports at least 90% women beneficiaries. (MOF)

VII. DISASTERS IN INDONESIA (62% are climate linked)

Natural # of Deaths as # of Missing as # of Injured as # of Homeless # of Affected Total Impacted as Disasters % Total % Total % Total as % Total as % Total % Total Disasters (Period covered) Disasters Disasters Disasters Disasters Disasters (A+B+C+D+E) (A) (B) (C) (E) (D)

Hydrological 3.7% 14.3% 56.1% 9.12% 11.8% 37.1% (1953–2020) Geophysical 85.7% 54.2% 43.0% 2.23% 84.8% 36.0% (1909–2019) Climatological 3.7% 0.00% 0.1% 0.00% 0.0% 24.4% (1966–2019) Biological 1.5% 7.1% 0.0% 0.00% 0.0% 2.0% (1909–2007) Technological 4.5% 24.3% 0.7% 3.2% 0.09% 0.4% (1942–2020) Meteorological 0.8% 0.00% 0.1% 0.2% 77.93% 0.1% (1956–2017) Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

NOTES:

- Death: Number of people who lost their life because the event happened. - Missing: The number of people whose whereabouts since the disaster is unknown, and who are presumed dead (official figure when available). - Injured: People suffering from physical injuries, trauma or an illness requiring immediate medical assistance as a direct result of a disaster. - Homeless: Number of people whose house is destroyed or heavily damaged and therefore need shelter after an event. - Affected: People requiring immediate assistance during a period of emergency, i.e. requiring basic survival needs such as food, water, shelter, sanitation and immediate medical assistance. - Total affected: Death, MISSING, injured, homeless, and affected. - Climatological refers to the following events: droughts and wildfire (forest fires). - Hydrological refers to the following events: floods (flashflood, riverine flood, coastal flood) and landslides. - Meteorological refers to the following event: storm (e.g., tropical storms). - Geophysical refers to the following events i.e., volcanic activity (ashfall, lava flow), earthquake (ground movement, tsunami), mass movement (landslides). - Technological refers to the following events: accidents (e.g., fire, explosion). - Biological refers to the following events: epidemics, pandemics (bacterial, parasitic and viral diseases) and infestations. Source: EM DAT international Disasters Data base: Indonesia.