East Nusa Tenggara of Indonesia

FISCAL POLICY AGENCY MINISTRY OF FINANCE

Ministry of Finance Republic of Indonesia Provincial Climate Public Expenditure and Institutional Review (CPEIR) East Nusa Tenggara of Indonesia

UNE P

Center for Climate Finance and Multilateral Policy Fiscal Policy Agency Ministry of Finance, Republic of Indonesia December 2015 ThisThis report report has has beenbeen producedproduced with the supportsupport ofof UNDPUNDP Indonesia, Indonesia, CapacityCapacity Development Development for for Development Development Effectiveness Effectiveness Facility forfor AsiaAsia Pacific Pacific,, UNDP-UNEPUNDP-UNEP Poverty andand Environment InitiativeInitiative

UNE P

CLIMATECLIMATE PUBLIC PUBLIC EXPENDITURE EXPENDITURE AND INSTITUTIONALAND INSTITUTIONAL REVIEW REVIEW IN BANGKA OF BELITUNGEAST NUSA ISLANDTENGGARA OF OF INDONESIA INDONESIA

Centre for Climate Change Finance and Multilateral Policy CenterFiscal forPolicy Climate Agency Finance - Ministryand Multilateral of Finance Policy Fiscal Policy Agency Ministry of Finance, Republic of Indonesia

i Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Research Team Leader: Silvia Irawan ThisThis report report has has beenbeen producedproduced with the supportsupport ofof UNDPUNDP Indonesia, Indonesia, CapacityCapacity Development Development for for Development Development Effectiveness Effectiveness Facility forfor AsiaAsia Pacific Pacific, , Research Team: UNDP-UNEPUNDP-UNEP Poverty andand Environment InitiativeInitiative Azrin Rasuwin, Guntur

Reviewers: Ministry of Finance: Ria Sartika Azahari, Hageng Suryo Nugroho. Ministry of Environment and Forestry: Tantri Arundati, Tri Widayati, Devita Safitri, Maria Ulfa, Dyah P. UNE P UNDP Indonesia: Verania Andria, Liliek Sofitri. UNDP Asia Pasific Regional Centre: Joanne Manda, Kevork Baboyan.

With Special Thanks to: Ministry of Finance: Kindy Rinaldy Syahrir, Agunan Samosir, Joko Tri Haryanto, Mahpud Sujai, Rita Helbra, Prima Yudhistira (alm), Bara Ampera, Bramantya Saputro, Faradina Salsabil, Bejo Waluyo, Qoriah Aenul Yakin, Adisty Lestari, Syaifullah.

Ministry of Home Affairs: Ala Baster.

Provincial Government of East Nusa Tenggara (NTT): Wayan Darmawan,Sefrit Tanis,Richard A.Dasales (Bappeda); Dominikus M, Salesius Anggul, Reno Lawang,Dewi Suryandari, Eduardus Manek, Salesius CLIMATECLIMATE PUBLIC PUBLIC EXPENDITURE EXPENDITURE AND Anggul, Reno Lawang (SPADU-Bappeda); Severinus L. Memokodo (Dishut); Sudirta (BKP2); M.J.S.Takesan (Biro Kesra); Sintus C (BPBD); M.I. Ignatius INSTITUTIONALAND INSTITUTIONAL REVIEW REVIEW IN BANGKA OF (BPPNPA); Carles A. Tari (BMKG); Marsel Ndarung (Distanbun); Theodorus (Disnak); Wisnu Wardhana (AMPL); Janis H. Dumalang (BPMPD); Tony Basuki BELITUNGEAST NUSA ISLANDTENGGARA OF OF INDONESIA INDONESIA (BPTP). District Government of Sumba Timur, Waingapu, NTT: Yeremias Gajawanda (Bappeda); IGK Adnyana (DPU); Marthen Konda Meha (Distan TPH).

District Government of Manggarai, Ruteng, NTT: Stefanus Tawar (Bappeda); Silvesterefendi (DPU).

District Government of Sabu Raijua, Seba: Yahya Tuka (Bappeda), Hendrataosu (Distan).

UNDP: Liza Martiananda, Ketut W. Soethama (SPARC)

This initiative is supported by:

i ii Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Table of Content

Abbreviations ...... iv Executive Summary ...... vii

1. Background ...... 1 1.1. Introduction to NTT (subnational) CPEIR Study ...... 1 1.2. East Nusa Tenggara Province ...... 2 1.3. Methods ...... 4

2. Fiscal decentralization and subnational budget process ...... 7 2.1. Development policies as the basis for the budgeting process ...... 7 2.2. National and subnational budget process ...... 9 2.3. Subnational financial management ...... 10 2.4. Fiscal landscape in NTT ...... 14 2.5. Discussion and Summary ...... 19

3. Climate change policy ...... 21 3.1. Climate change mitigation ...... 21 3.2. Climate change adaptation ...... 23 3.3. Provincial Medium-term Development Plan ...... 25 3.4. Action Plans on Climate Change vs. Development Plans ...... 26 3.5. Discussion and Summary ...... 28

4. Climate change institutions ...... 31 4.1. National climate change institutions ...... 31 4.2. Local institutions ...... 32 4.3. Discussion and Summary ...... 35

5. Subnational Expenditure Review ...... 37 5.1. Discussion and Summary ...... 45

6. Assessing the effectivess of climate expenditures ...... 46 6.1. Climate mitigation expenditure ...... 46 6.2. Climate adaptation expenditure ...... 47 6.3. Discussion and Summary ...... 48

7. Stories from Sumba Timur ...... 51 7.1. Summary ...... 56

8. Conclusion and Recommendations ...... 59

References ...... 63

iii Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Abbreviations

Table of Content Abbreviations

Abbreviations ...... iv Executive Summary ...... vii 1. Anggur Merah Anggaran untuk Rakyat Menuju Sejahtera (Financial Assistance for Community Development Program) 1. Background ...... 1 2. APBD Anggaran Pendapatan dan Belanja Daerah (Local Budget) 1.1. Introduction to NTT (subnational) CPEIR Study ...... 1 3. APBD-P Anggaran Pendapatan dan Belanja Daerah Perubahan (Revised Local Budget) 1.2. East Nusa Tenggara Province ...... 2 4. APBD-R Anggaran Pendapatan dan Belanja Daerah Realisasi (Realized Local Budget/ 1.3. Methods ...... 4 Budget Outcomes) 5. APBN Anggaran Pendapatan dan Belanja Negara (State Budget) 2. Fiscal decentralization and subnational budget process ...... 7 6. Bappeda Badan Perencanaan Pembangunan Daerah (Local Development Planning Agency) 2.1. Development policies as the basis for the budgeting process ...... 7 7. Bappenas Badan Perencanaan Pembangunan Nasional (National Development Planning 2.2. National and subnational budget process ...... 9 Agency) 2.3. Subnational financial management ...... 10 8. BAU Business As Usual 2.4. Fiscal landscape in NTT ...... 14 9. BKF Badan Kebijakan Fiskal (Fiscal Policy Agency) 2.5. Discussion and Summary ...... 19 10. BNPB Badan Nasional Penanggulangan Bencana (National Board for Disaster Management) 3. Climate change policy ...... 21 11. BPK Badan Pemeriksa Keuangan (Supreme Audit Body) 3.1. Climate change mitigation ...... 21 12. BPS Badan Pusat Statistik (Statistical Bureau) 3.2. Climate change adaptation ...... 23 13. CPEIR Climate Public Expenditure and Institutional Review 3.3. Provincial Medium-term Development Plan ...... 25 14. DAK Dana Alokasi Khusus (Conditional Grants) 3.4. Action Plans on Climate Change vs. Development Plans ...... 26 15. DAU Dana Alokasi Umum (Unconditional Grants) 3.5. Discussion and Summary ...... 28 16. DBH Dana Bagi Hasil (Shared Revenues) 17. DID Dana Insentif Daerah (Incentive Grants) 4. Climate change institutions ...... 31 18. DIPA Daftar Isian Pelaksanaan Anggaran (The Budget Authorization Document) 4.1. National climate change institutions ...... 31 19. DNPI Dewan Nasional Perubahan Iklim (National Council on Climate Change) 4.2. Local institutions ...... 32 20. DPA Daftar Pengisian Anggaran (List of Expenditure) 4.3. Discussion and Summary ...... 35 21. DPR Dewan Perwakilan Rakyat (National Representative Council) 22. DPRD Dewan Perwakilan Rakyat Daerah (Local Representative) 5. Subnational Expenditure Review ...... 37 23. ENSO El Niño-Southern Oscillation 5.1. Discussion and Summary ...... 45 24. FGD Focus Group Discussion 25. FPA Fiscal Policy Agency 6. Assessing the effectivess of climate expenditures ...... 46 26. GEF Global Environment Facility 6.1. Climate mitigation expenditure ...... 46 27. GHG Greenhouse Gasses 6.2. Climate adaptation expenditure ...... 47 28. HDI Human Development Index 6.3. Discussion and Summary ...... 48 29. ICCTF Indonesia Climate Change Trust Fund 30. IFTs Intergovernmental Fiscal Transfers 7. Stories from Sumba Timur ...... 51 31. Juklak Petunjuk Pelaksanaan (Technical Guidance Document) 7.1. Summary ...... 56 32. Keppres Keputusan Presiden (Presidential Decree) 33. KUA Kebijakan Umum APBD (General Policy for Local Budget) 8. Conclusion and Recommendations ...... 59 34. MOF Ministry of Finance 35. MTEF Medium Term Expenditure Framework References ...... 63 36. Musrenbang Musyawarah Perencanaan Pembangunan (Community consultations on

iii iv Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Abbreviations

development planning) 37. NTT Nusa Tenggara Timur 38. PAD Pendapatan Asli Daerah (Local/Local Own-source Revenue) 39. Perpres Peraturan Presiden (Presidential Regulation) 40. PMK Peraturan Menteri Keuangan (Minister of Finance Regulation) 41. PP Peraturan Pemerintah (Government Regulation) 42. PPAS Prioritas dan Plafon Anggaran Sementara (Priority and Provisional Budget Ceiling) 43. RAD-GRK Rencana Aksi Daerah Penurunan Emisi Gas Rumah Kaca (Local Action Plan to Reduce GHG Emissions) 44. RAN-API Rencana Aksi Nasional Adaptasi Perubahan Iklim (National Action Plan for Climate Change Adaptation) 45. RAN-GRK Rencana Aksi Nasional Penurunan Emisi Gas Rumah Kaca (National Action Plan to Reduce GHG Emissions) 46. REDD+ Reducing Emissions from Deforestation and Forest Degradation Plus 47. Renja K/L Rencana Kerja Kementerian/Lembaga (Work Plans for Ministries and Institutions) 48. Renja SKPD Rencana Kerja Satuan Kerja Perangkat Daerah (Local Government’s Annual Work Plan) 49. Renstra K/L Rencana Strategis Kementerian/Lembaga (Strategic Plan for Ministries and Institutions) 50. Renstra SKPD Rencana Strategis Satuan Kerja Perangkat Daerah (Local Strategic Plan for Ministries and Institutions) 51. RKP Rencana kerja Pemerintah (Government Work Plan) 52. RPJMN Rencana Pembangunan Jangka Menengah Nasional (National Medium-Term Development Plan) 53. RPJP Rencana Pembangunan Jangka Panjang (Long-Term Development Plan) 54. SDF Sustainable Development Financing 55. SIDIK Vulnerability Index Data Inventory System 56. SNC Second National Communication 57 SPARC Strengthen Climate Resilience of Rural Communities 58. UNDP United Nations Development Programme 59. WFP World Food Programme

v Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Abbreviations

v vi Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Executive Summary

Introduction. The Climate Public Expenditure and climatic risks in the province. Institutional Review (CPEIR) of the Indonesian province of East Nusa Tenggara (NTT) is the Institutional Analysis. Multiple government first subnational CPEIR. As part of the study, the institutions across a range of sectors are involved in provincial plans and budget for climate change the implementation of climate actions. This poses were analyzed with case studies in three districts a real challenge in terms of coordination since in NTT. The results of the study are expected to government budget and activities are classified inform and support the planning, budgeting and into sectors. Besides across sectors, coordination implementation of climate change programs in the should also be carried out between the national, province. provincial and district governments within specific sectors. Coordination for climate related actions Climate Policy. National policies shape and direct can be carried out within a specific government the development of subnational policies. In the administration unit. Since most of the authority to case of climate mitigation, the national government provide public services has been devolved to the has provided a clear direction on the targets and district level, district governments can therefore action plans to reduce GHG emissions through be the coordinating unit for the implementation of the issuance of Presidential Regulation 61/2011 climate actions. on RAN-GRK. In the case of climate adaptation, no specific regulation has been issued to provide Many government activities that are related to a direction for local governments. Without a clear addressing climate change are currently planned direction for local governments, provincial and and financed by the national government. There district governments have difficulties in developing is no specific budget allocated to support the detailed action plans or targets to adapt to climate implementation of RAN-GRK or RAN-API at the change. provincial or district level. Providing an earmarked budget is important to pursue national priorities The Provincial Government of NTT has developed at the local level. The budget should also be provincial action plans to reduce GHG emissions. complemented with increasing capacity in The Strengthen Climate Resilience of Rural planning and implementing climate actions at Communities (SPARC) project, implemented by the provincial or district level. Earmarked budget Ministry of Environment with support from UNDP, for climate change will come in the form of currently provides support for the provincial intergovernmental fiscal transfers. Although the government to develop climate adaptation actions. transfers are created to finance national priorities The Provincial Government has already included at the local level, it can also provide incentives some of adaptation and mitigation measures for local government to allocate their budget for into the planning documents. The inclusion of climate actions. these activities in the documents means that the government will allocate its budget to implement Expenditure Analysis. All three levels of government those activities. However, many activities that (national, provincial and district levels) finance have been included in the government planning activities related to climate actions in NTT, based and budget documents are the ongoing or existing on the climate expenditure budget classification activities. Some adjustments to the existing or proposed in this study. The national government ongoing activities can be made considering has the highest portion of climate expenditure to

vii Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Executive Summary Executive Summary

the total expenditure allocated in NTT in the same expenditure to the total expenditure was declining Executive Summary year as compared to the provincial and district between 2010 and 2013. The expenditure budget. The portion of climate expenditure to the analysis also shows that many of the government total budget of Dana Dekonsentrasi dan Tugas activities classified as climate actions are currently Pembantuan for NTT is more than 20 per cent, business as usual or existing/ongoing activities. Introduction. The Climate Public Expenditure and climatic risks in the province. while the portion of climate expenditure to the total More than 90 per cent of climate expenditure Institutional Review (CPEIR) of the Indonesian provincial and district budget is only around 10 was spent on adaptation actions. This is mainly province of East Nusa Tenggara (NTT) is the Institutional Analysis. Multiple government per cent.1 This is mainly because most the national because the indicators used to estimate the first subnational CPEIR. As part of the study, the institutions across a range of sectors are involved in budget spent at the provincial and district levels adaptive capacity and the exposure/sensitivity provincial plans and budget for climate change the implementation of climate actions. This poses (Dana Dekonsentrasi dan Tugas Pembantuan) is are somewhat general. Methodologically, it is were analyzed with case studies in three districts a real challenge in terms of coordination since allocated specifically for direct spending on goods important to develop a specific measurement that in NTT. The results of the study are expected to government budget and activities are classified and capital. In contrast, the provincial and district can capture the marginal benefit of adaptation inform and support the planning, budgeting and into sectors. Besides across sectors, coordination governments allocate 35-50 per cent of its total activities to increasing resilience. Without such implementation of climate change programs in the should also be carried out between the national, budget for personnel. measurement, climate adaptation actions can only province. provincial and district governments within specific be classified based on qualitative assessment, sectors. Coordination for climate related actions With the high proportion of the national spending which tends to overestimate the real value of Climate Policy. National policies shape and direct can be carried out within a specific government at the provincial and district levels, it is important climate expenditure . the development of subnational policies. In the administration unit. Since most of the authority to to ensure the activities financed by the national case of climate mitigation, the national government provide public services has been devolved to the government are well-targeted and according The Effectiveness Of Climate Expenditure. The has provided a clear direction on the targets and district level, district governments can therefore to the local needs. Some of those activities are analysis on the effectiveness of climate expenditure action plans to reduce GHG emissions through be the coordinating unit for the implementation of national programs that should be implemented can provide information about whether the budget the issuance of Presidential Regulation 61/2011 climate actions. at the provincial and district levels, sometimes allocated is sufficient to achieve specific climate on RAN-GRK. In the case of climate adaptation, they are not necessarily suitable to the needs target. With the trend of the total spending between no specific regulation has been issued to provide Many government activities that are related to of local communities. This situation therefore 2010 and 2013, the total budget allocated to a direction for local governments. Without a clear addressing climate change are currently planned requires a stronger capacity of the subnational achieve the emission reduction target should be direction for local governments, provincial and and financed by the national government. There government, particularly at the district level, sufficient, assuming the performance indicator district governments have difficulties in developing is no specific budget allocated to support the in planning and budgeting to ensure that the remains stable. detailed action plans or targets to adapt to climate implementation of RAN-GRK or RAN-API at the activities implemented within their jurisdiction are change. provincial or district level. Providing an earmarked beneficial for their constituents. One suggestion To sustain the stable production of food crop, budget is important to pursue national priorities is to use the intergovernmental fiscal transfers there is a bundle of activities that should be The Provincial Government of NTT has developed at the local level. The budget should also be to finance national priorities at the district level, implemented. At least four government agencies provincial action plans to reduce GHG emissions. complemented with increasing capacity in instead of using the deconcentration fund and are involved at the national, provincial and district The Strengthen Climate Resilience of Rural planning and implementing climate actions at Tugas Pembantuan as the decision making level to deliver the activities including Public Communities (SPARC) project, implemented by the provincial or district level. Earmarked budget process of these funds remain at the national Works Agency, Agriculture and Plantation Agency, Ministry of Environment with support from UNDP, for climate change will come in the form of level although the implementation is carried out Planning Agency and Food Security and Extension currently provides support for the provincial intergovernmental fiscal transfers. Although the at the local level. With the intergovernmental fiscal Service Agency. Due to limited data, the analysis government to develop climate adaptation actions. transfers are created to finance national priorities transfers, the decision making process is carried on the effectiveness of climate actions focuses The Provincial Government has already included at the local level, it can also provide incentives out at the local level. mainly on the impact of government activities some of adaptation and mitigation measures for local government to allocate their budget for to maintaining and increasing food productivity. into the planning documents. The inclusion of climate actions. There was a slight increase of the total climate The analysis shows that, in the case of NTT, the these activities in the documents means that the expenditure in NTT Province, Manggarai and increase of budget allocated for two out of many government will allocate its budget to implement Expenditure Analysis. All three levels of government Sabu Raijua Districts in 2013 compared to the activities have positive impact in food security. those activities. However, many activities that (national, provincial and district levels) finance budget in 2010, although the proportion of climate They are irrigation and pest control as well as crop have been included in the government planning activities related to climate actions in NTT, based intensification. The increase of budget allocated and budget documents are the ongoing or existing on the climate expenditure budget classification 1 The national government finances national priorities at the local level through a deconcentration fund. The deconcentration fund is earmarked for specific activities proposed in the work activities. Some adjustments to the existing or proposed in this study. The national government plan of relevant ministries at the national level. Provincial governments implement deconcentrated activities. Tugas Pembantuan is implemented after line ministries at the national level instruct district governments to implement specific activities at the district level. The line ministries then finance the activities. Similar to the deconcentration fund, the proposals are ongoing activities can be made considering has the highest portion of climate expenditure to submitted by the district level of government while the planning and budgeting process of Tugas Pembantuan is carried out at the national level.

vii viii Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Executive Summary

for other activities, including extension service documents such as medium-term development and food security program, do not seem to yield plan will be the main reference during the positive results. This finding should be interpreted budgeting process. Activities cannot be proposed carefully as it does not mean that those activities without being included in the planning document. are not important. It rather poses a question on Moreover, learning from the lessons of the the effectiveness of the implementation of those development and implementation of RAN-GRK programs or activities. and RAN-API, it is obvious that mentioning a specific target in some government regulations District Level Analysis. The district level is the can help governments to focus on achieving such government administrative unit where most targets. The public also has a strong basis to hold government activities, including in sectors related the government accountable in achieving such to climate adaptation, are implemented. A strong targets. coordination at the district level is therefore crucial to ensure the national and provincial spending is INSTITUTION: Better coordination and management according to the local needs. At the district level, of public finance across government levels. it is also possible to observe a comprehensive picture on government spending, government National and provincial governments currently performance in delivering public services and also control a significant portion of spending at the the achievement of targets or output. district level, particularly for the development of infrastructure. The planning process for spending District governments have limited budget to finance at the district level was carried out at the national public services. An increase of budget allocation in and provincial levels, with limited involvement a specific sector will eventually reduce the budget of district governments. District governments allocated in others. The planning and budgeting rely significantly on the national transfers (DAU, of many large-scale activities at the district level DBH and DAK) in financing public services at the are also under the authority of the national district level, with around 10-17 per cent of these government. Furthermore, the international transfers earmarked for specific purposes. With finance cannot be channeled directly to the district the existing fiscal landscape at the local level, two government without going through the national main challenges are how to: on-granting system. The finding of the district level analysis suggest for: 1) with the limitation of the - ensure the national/provincial spending is district government budget, priorities can be given well coordinated with the district government. to adjusting the existing government activities Since the planning process of the national/ considering climatic risks; 2) as the national provincial spending at the district level is not government withholds the authority to finance under the authority of the district government, many activities at the provincial and district levels, the involvement of district government is a transfer mechanism can be created to finance crucial as they are the most knowledgeable climate actions at the local level. about the local situation. Transferring the budget to the district level may not necessarily Recommendations be the answer as district governments usually have lower capacity than their provincial POLICY: Making a clear statement in the planning and national counterparts. Hence, better document and formalize climate targets in coordination (improved planning systems government regulations. using enhanced top-down and bottom- up information flows) while increasing the In order to allocate budgets, governments should capacity of the district government to provide follow certain planning processes. Planning infrastructure is important.

ix Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Executive Summary Executive Summary

for other activities, including extension service documents such as medium-term development - create a financial incentive for district however decreasing trend of district governments and food security program, do not seem to yield plan will be the main reference during the governments to implement climate actions. spending for local communities in three districts positive results. This finding should be interpreted budgeting process. Activities cannot be proposed Currently, there are no specific transfer between 2010 and 2012. No specific information carefully as it does not mean that those activities without being included in the planning document. mechanisms created for climate change. can be obtained regarding the cash support for are not important. It rather poses a question on Moreover, learning from the lessons of the When creating a transfer mechanism, it is communities. This begs for further analysis on the the effectiveness of the implementation of those development and implementation of RAN-GRK crucial to ensure that district governments effectiveness of the government cash support for programs or activities. and RAN-API, it is obvious that mentioning a have the flexibility to implement national local communities and how they can be modified specific target in some government regulations programs based on locally specific situations. to support climate mitigation and adaptation District Level Analysis. The district level is the can help governments to focus on achieving such A proper analysis should be carried out to objectives. government administrative unit where most targets. The public also has a strong basis to hold investigate this at the national scale. government activities, including in sectors related the government accountable in achieving such Tracking and reporting climate expenditures. to climate adaptation, are implemented. A strong targets. EXPENDITURE: Identifying climate adaptation Assessing the effectiveness of climate expenditure coordination at the district level is therefore crucial actions based on research and science. Many of requires tracking and reporting climate to ensure the national and provincial spending is INSTITUTION: Better coordination and management climate adaptation actions can be implemented expenditures regularly. The Ministerial Decree according to the local needs. At the district level, of public finance across government levels. by slightly or moderately adjusting the existing 13/2006 stipulated specific budget codes for it is also possible to observe a comprehensive development activities taking into account climate climate change under the budget of Provincial/ picture on government spending, government National and provincial governments currently risks. Some actions can be more effective for a District/Municipality Environmental Agencies. performance in delivering public services and also control a significant portion of spending at the specific locality than others as the vulnerability However, the attempts to control the impact of the achievement of targets or output. district level, particularly for the development of index vary between one location to another. climate change are not only being implemented by infrastructure. The planning process for spending The Government should consider specific local environmental agencies. As discussed in this District governments have limited budget to finance at the district level was carried out at the national local conditions when developing its plans and report, more than 10 agencies are involved in the public services. An increase of budget allocation in and provincial levels, with limited involvement budget to adapt to climate change. Selection implementation of climate actions in each locality. a specific sector will eventually reduce the budget of district governments. District governments of adaptation should be based on science and Therefore, to trace government expenditure on allocated in others. The planning and budgeting rely significantly on the national transfers (DAU, research. Therefore, the government should rely climate change will require all agencies to track of many large-scale activities at the district level DBH and DAK) in financing public services at the on research and scientific information in making and report their climate related expenditures. are also under the authority of the national district level, with around 10-17 per cent of these decisions on how to best allocate their limited Currently there is no mechanism allowing this government. Furthermore, the international transfers earmarked for specific purposes. With financial resources to increase adaptive capacity. process to happen such as the tagging system finance cannot be channeled directly to the district the existing fiscal landscape at the local level, two at the national level regulated by the Ministerial government without going through the national main challenges are how to: Measuring the effectiveness of government Decree 136/2014. The Ministry of Home Affairs, on-granting system. The finding of the district level cash/direct support for local communities. together with the Ministry of Finance, can therefore analysis suggest for: 1) with the limitation of the - ensure the national/provincial spending is Government at all levels have allocated a certain create a budget tagging system for the local district government budget, priorities can be given well coordinated with the district government. amount of the budget for cash/direct support for government, for instance, by creating a thematic to adjusting the existing government activities Since the planning process of the national/ local communities through grants or the social classification of local budget. considering climatic risks; 2) as the national provincial spending at the district level is not assistance budget. The provincial government government withholds the authority to finance under the authority of the district government, has significantly increased the spending for social The proposed action plans are summarized in many activities at the provincial and district levels, the involvement of district government is assistance and grants for communities from only 5 next table. a transfer mechanism can be created to finance crucial as they are the most knowledgeable per cent in 2010 to 43 per cent in 2012. There is climate actions at the local level. about the local situation. Transferring the budget to the district level may not necessarily Recommendations be the answer as district governments usually have lower capacity than their provincial POLICY: Making a clear statement in the planning and national counterparts. Hence, better document and formalize climate targets in coordination (improved planning systems government regulations. using enhanced top-down and bottom- up information flows) while increasing the In order to allocate budgets, governments should capacity of the district government to provide follow certain planning processes. Planning infrastructure is important.

ix x Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Executive Summary DRAFT 2.2

Table Proposed Action Plan Table X Action Plan Comment [RP10]: the problem with the Lead Institution Short Mid Long proposed actions is that the "how" is not specified 2015-16 2015-20 Beyond 2020 in the main text National Level Response: The community level is unfortunately 1. Coordinate better national spending at the Min. Home Affairs, Finance beyond our scope of study. provincial and district levels (Deconcentrated & relevant technical activities and Tugas Pembantuan) ministries Formatted: Font: 2. Increase the capacity of provincial/district Min. Home Affairs, Finance governments in planning, budgeting and service & relevant technical delivery ministries Formatted: Font: 3. Identify appropriate fiscal incentive to finance Ministry of Finance with Formatted: Font: climate actions at the provincial/district levels relevant technical ministry 4. Create a tagging system for tracking and Ministry of Home Affairs Formatted: Font: reporting climate expenditures at the subnational and Finance Formatted: Font: level Formatted: Font: 5. Provide technical guidance on climate adaptation Ministry of Environment for provincial and district governments and Forestry with Ministry Formatted: Font: of Home Affairs and Formatted: Font: Ministry Finance Provincial/District Level Formatted: Font: 5. Include clear climate targets in the planning and Planning Agency Formatted: Font: budgeting documents (Bappeda) with Local Formatted: Font: Secretary 6. Identify quick win adaptation strategies and Planning Agency Formatted: Font: adjust the existing development programs (Bappeda) and relevant Formatted: Font: technical agencies Formatted: Font: 7. Develop database for climate risks and possible Planning Agency adaptation interventions (Bappeda) and relevant Formatted: Font: technical agencies Formatted: Font: National and Provincial/District Level 8. Identify effective government cash/direct Ministry of Finance Formatted: Font: support for local communities Comment [RP11]: Though not analysed in Non Government Institutions detail in the main text, capacity is identified as a 9. Focus on developing models of effective climate Relevant donor agencies, constraint at all levels. adaptation interventions to be further replicated by NGOs and Universities government Response: we added a paragraph on this 10. Better communicate the results of research or Relevant donor agencies, Formatted: Font: studies to local governments so they can be NGOs and Universities Formatted: Font: translated to government policies and programs Formatted: Font: Formatted: Font: Formatted: Font:

Formatted: Normal

9 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Executive Summary DRAFT 2.2

Formatted: Normal

xi xii

9 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Background

1. Background

1.1. Introduction to NTT (subnational) CPEIR Study

Through the increase of greenhouse gasses Indonesia’s emissions. In February 2014, the concentration in the atmosphere, the planet has Indonesian government launched the National warmed and the weather patterns have become Action Plan for Climate Change Adaptation (RAN- more unpredictable. Sea levels around the world API). The RAN-API sets out climate adaptation are rising. Extreme weather events have become action plans for the country for areas such as more common and severe, and this trend is the economy, livelihoods and the environment. predicted to increase into the future. Changes Through these policies, the Indonesian government in climate will affect societies around the world. has developed strategies for the mitigation of and Agricultural production will be threatened and adaptation to climate change. vector borne diseases will increase with poor people feeling these impacts most severely Local governments in Indonesia are central to (Githeko et al., 2000; Parry et al., 2004; Lobell efforts for mitigating and adapting to climate et al., 2008). Initiatives need to be taken to both change. After climate mitigation plans at the mitigate and adapt to climate change. national level are finalized, local governments need to develop a Local Action Plan to reduce GHG The Government of Indonesia has made emissions (Rencana Aksi Daerah or RAD-GRK). commitments to address the causes and effects At the provincial level, most local governments of climate change. In the National Medium-Term have completed their plans for mitigating climate Development Plan (Rencana Pembangunan change. However, the extent of involvement of Jangka Menengah Nasional (RPJMN) 2010-2014, provincial governments in promoting adaptation both climate change mitigation and adaptation are through RAN-API remains unclear, as it is recognized as priorities. During the G-20 Leaders uncertain whether local governments are required Summit in Pittsburgh on 25 September 2009, by the regulation to develop them. From these the then president of Indonesia, Susilo Bambang action plans, district governments need to Yudhoyono, committed to reduce greenhouse gas implement actions to support them. Under the emissions by 26 percent of the total emissions Indonesian law, districts are responsible for produced under business as usual in 2020. the provision of major public services. Despite Furthermore, with international support, he limited financial resources at the subnational committed to reduce emissions by an additional 15 level, local governments may have allocated and percent. Following this announcement, he issued spent government budget on climate mitigation Presidential Regulation No. 61/2011 stipulating and adaptation actions. It is therefore imperative the National Action Plan on Greenhouse Gases to assess the existing expenditures on climate Emissions Reduction (RAN-GRK) in 2011. change, to examine whether there were gaps and how those gaps are addressed. The results of such The RAN-GRK specifies Indonesia’s action plan assessment can provide policy recommendation to mitigate climate change by setting emissions to better finance climate actions, including, for reduction targets per sector. The action plan instance providing additional funds or reallocating identifies five priority sectors that contribute to the existing budget for climate actions.

1 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Background Background

The United Nations Development Programme The result of the vulnerability assessment provided 1. Background (UNDP) is supporting local governments in important details about the current vulnerability Indonesia with initiatives for climate change conditions of the districts and general background mitigation and adaptation. As part of the against which this sub-national CPEIR was carried 1.1. Introduction to NTT (subnational) CPEIR Study Sustainable Development Financing (SDF) out. The sub-national CPEIR in NTT will analyze project, UNDP is supporting the Government of how the province currently plans and budgets Indonesia to strengthen its capacity to enhance for climate change and contribute to identifying implementation of inclusive environmental gaps and areas of improvement in the planning, Through the increase of greenhouse gasses Indonesia’s emissions. In February 2014, the activities (climate change mitigation, climate budgeting and implementation process. Lessons concentration in the atmosphere, the planet has Indonesian government launched the National change adaptation and biodiversity) through and policy recommendations from the CPEIR warmed and the weather patterns have become Action Plan for Climate Change Adaptation (RAN- the development of fiscal instruments and and the SPARC program will feed into national more unpredictable. Sea levels around the world API). The RAN-API sets out climate adaptation performance-based budgeting. Climate Public dialogue through the SDF. The CPEIR in NTT are rising. Extreme weather events have become action plans for the country for areas such as Expenditure and Institutional Review (CPEIR) at will be implemented under the supervision of more common and severe, and this trend is the economy, livelihoods and the environment. the subnational level is a complementary effort the Provincial Planning Agency (BAPPEDA) in predicted to increase into the future. Changes Through these policies, the Indonesian government which contributes to an improved understanding cooperation with the Fiscal Policy Agency (FPA) of in climate will affect societies around the world. has developed strategies for the mitigation of and of sub-national level policy and institutional setup the Ministry of Finance (MoF). Agricultural production will be threatened and adaptation to climate change. governing public expenditures related to climate vector borne diseases will increase with poor change. The province of East Nusa Tenggara (NTT) 1.2. East Nusa Tenggara Province people feeling these impacts most severely Local governments in Indonesia are central to has been chosen as a pilot site for this Review (Githeko et al., 2000; Parry et al., 2004; Lobell efforts for mitigating and adapting to climate because of its high systemic vulnerabilities due to The province of East Nusa Tenggara (NTT) is a et al., 2008). Initiatives need to be taken to both change. After climate mitigation plans at the geographical and geophysical factors. The detailed cluster of islands located in the south-eastern mitigate and adapt to climate change. national level are finalized, local governments discussion on NTT is provided in the next section. part of Indonesia. The archipelago, part of the need to develop a Local Action Plan to reduce GHG Lesser Sunda Island group, comprises around The Government of Indonesia has made emissions (Rencana Aksi Daerah or RAD-GRK). In NTT, UNDP is working to strengthen the 556 islands including the islands of Sumba, commitments to address the causes and effects At the provincial level, most local governments resilience of communities to climate change Flores, Komodo, Rinca, the Solor Islands, the Alor of climate change. In the National Medium-Term have completed their plans for mitigating climate through a project titled “Strategic Planning and Islands, Sawu, Roti, Semau and the western half Development Plan (Rencana Pembangunan change. However, the extent of involvement of Action to strengthen climate resilience of Rural of Timor. In 2012, the population of the province Jangka Menengah Nasional (RPJMN) 2010-2014, provincial governments in promoting adaptation Communities (SPARC)”. The project, financed by was around 4.8 million people, spread across both climate change mitigation and adaptation are through RAN-API remains unclear, as it is the Special Climate Change Fund of the Global 4,734,990 hectares of land (BPS, 2014), and recognized as priorities. During the G-20 Leaders uncertain whether local governments are required Environment Facility, is being implemented with more than 50 local languages and dialects Summit in Pittsburgh on 25 September 2009, by the regulation to develop them. From these together with the Ministry of Environment (MoE) spoken (Russell-Smith et al, 2000). The province the then president of Indonesia, Susilo Bambang action plans, district governments need to and Provincial planning Agency. The project is divided into 20 districts and one municipality, Yudhoyono, committed to reduce greenhouse gas implement actions to support them. Under the supports districts to effectively plan and budget Kupang, which had the highest population density emissions by 26 percent of the total emissions Indonesian law, districts are responsible for for adaptation to climate change. Building on in the province in 2012 (around 2,496 people per produced under business as usual in 2020. the provision of major public services. Despite the work of the SPARC project, UNDP selected km2). The most sparsely populated districts in Furthermore, with international support, he limited financial resources at the subnational NTT as the pilot province for subnational CPEIR 2009 were Sumba Timur and Sumba Tengah with committed to reduce emissions by an additional 15 level, local governments may have allocated and in Indonesia. The MoE led a climate vulnerability 33 people per km2 (BPS, 2010) percent. Following this announcement, he issued spent government budget on climate mitigation assessment in three pilot districts – Manggarai, Presidential Regulation No. 61/2011 stipulating and adaptation actions. It is therefore imperative Sumba Timur and Sabu Raijua – in the SPARC Geographical Information. As part of the Lesser the National Action Plan on Greenhouse Gases to assess the existing expenditures on climate project. The assessment particularly focused Sunda Island group, the climate is tropical, and Emissions Reduction (RAN-GRK) in 2011. change, to examine whether there were gaps and on the issues of agriculture, water access and ranges from semi-humid to semi-arid depending how those gaps are addressed. The results of such livelihoods in several focus villages in the districts. on the season . The monsoon season stretches The RAN-GRK specifies Indonesia’s action plan assessment can provide policy recommendation It also investigated socio-economic situations of from October to March each year. Outside of the to mitigate climate change by setting emissions to better finance climate actions, including, for each district that may influence their ability to monsoon season, the climate of NTT is relatively reduction targets per sector. The action plan instance providing additional funds or reallocating adapt to climate change. dry. Inter-annual climate variability is caused by identifies five priority sectors that contribute to the existing budget for climate actions.

1 2 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Background

El Nino Southern Oscillation (ENSO) that affects increased. Other major agricultural commodities the start and end of the monsoons as well as the in NTT are soybean and peanuts. Farmers also amount of rainfall (Fox, 1995). In 2005, it was cultivate subsistence crops such as maize, estimated that forests only cover 9.6% of the cassava, sweet potato and green peas. Throughout land area in NTT (Kurniawan and Tacconi, 2005, NTT, there are estates producing commodity Russell-Smith et al., 2007). For the most part, the crops such as coconut, coffee, clove, chocolate, islands are covered with dryland savannahs. cashew, candlenut, kapok, vanilla and areca nut. Coconut is the largest estate commodity and in Economy and Human Development. The province 2009, production reached 61.52 thousand tonnes is one of the poorest in Indonesia. According to (BPS, 2010 ). the Statistics Bureau (2014), the poverty rate in NTT is 19.82 percent compared to 11.25 Farming households often own livestock, with the percent nationally in 2014. It ranks third out of savannah landscapes of NTT suitable for grazing. 33 provinces in Indonesia in terms of the highest According to the Statistics Bureau (BPS, 2010) poverty rate following Papua (30.05 percent) and cattle accounts for most of the livestock (577 Papua Barat (27.13 percent) (BPS, 2014). The 552), followed by buffalos (150 405) and horses Human Development Index (HDI) of NTT is also (105 379). Fishing and aquaculture are also the third lowest in the country, which is 68.28 important sectors in the province, with the majority percent compared to 73.29 percent nationally in of production coming from capture fisheries 2012 (BPS, 2013b). In 2009, income per capita (97.49 per cent) and only a small percentage in NTT was 4,884,655 Rupiah in comparison to from aquaculture (2.51 per cent). Aside from fish, the national average of 21, 483,003 (BPS, 2010). some of the main products from the sector are Around 40 percent of people aged over 10 in NTT shrimp, squid, sea cucumber and seaweed. had either not attended or completed primary school, with another 31.20 per cent having only Finally, the forestry sector accounts for a small completed primary school (BPS, 2010). Beyond percentage of production in the primary industry those, 22.39 per cent had completed some form sector, mainly from harvesting sandalwood of junior high school, with the remaining amount (Santalum album). completing high school and very small percentage achieving some form of tertiary education (BPS, Climate Vulnerability. As most households are 2010). employed the in primary industries, food insecurity is a recurring problem in the province. Nearly all of The largest sector in NTT is the primary industries the districts in NTT fall within the 100 most food sector, including farming, forestry and fishing, insecure districts in Indonesia (Kieft and Soekarjo, which employs 68.15 per cent of workers (BPS, 2007). In 2007, 91.4 per cent of households in 2010). The remaining percentage of workers West Timor reported being food insecure. The are employed in the services sector (9.48 per causes of food insecurity are largely climatic. With cent), restaurants and trade (6.90 per cent), a long dry season, no major rivers and only a few the manufacturing sector (6.23 per cent) and perennial streams, communities in NTT suffer construction, transport, warehousing and from water scarcity and are prone to drought. For communication sectors (2 to 5 per cent). Other the most part, farms do not have irrigation, soil sectors accounted for less than 2 per cent of fertility is poor and inputs are expensive, which employees. contribute to increasing vulnerability of many households (Montgomery et. al., 2010). Rice, both wet and dry land farming, is the major agricultural product in NTT. From 2005 to 2009, During El Nino years, the start of the monsoon is both the volume and harvested area of rice often delayed and the amount of rainfall reduced,

3 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Background Background

El Nino Southern Oscillation (ENSO) that affects increased. Other major agricultural commodities exacerbating the vulnerability of communities in and the tail end (March, April) of the rainy season, the start and end of the monsoons as well as the in NTT are soybean and peanuts. Farmers also the province (IRI, 2008). The increasing variability although the level of variability of the total annual amount of rainfall (Fox, 1995). In 2005, it was cultivate subsistence crops such as maize, of weather, attributed to climate change, has also rainfall is relatively low in the province. estimated that forests only cover 9.6% of the cassava, sweet potato and green peas. Throughout affected farming in NTT, in particular affecting the land area in NTT (Kurniawan and Tacconi, 2005, NTT, there are estates producing commodity start and duration of wet seasons (Montgomery 1.3. Methods Russell-Smith et al., 2007). For the most part, the crops such as coconut, coffee, clove, chocolate, et. al, 2010). This uncertainty contributes to the islands are covered with dryland savannahs. cashew, candlenut, kapok, vanilla and areca nut. food security of households. In contrast, La Nina The Sub-national CPEIR in NTT aims to Coconut is the largest estate commodity and in cycles often lead to high rainfall and flooding, also contribute to the overall development objectives Economy and Human Development. The province 2009, production reached 61.52 thousand tonnes contributing to crop failures. The southern islands of NTT by helping decision-makers strategically is one of the poorest in Indonesia. According to (BPS, 2010 ). in NTT, West Timor, Rote, Sabu and Sumba, are allocate resources and manage finance to the Statistics Bureau (2014), the poverty rate also vulnerable to cyclones. These climatic factors achieve its emissions reduction and adaptation in NTT is 19.82 percent compared to 11.25 Farming households often own livestock, with the are the major causes of food insecurity in NTT, commitments. It aims to understand the existing percent nationally in 2014. It ranks third out of savannah landscapes of NTT suitable for grazing. along with other factors such as pests and plant climate policies, institutions, and budget allocated 33 provinces in Indonesia in terms of the highest According to the Statistics Bureau (BPS, 2010) diseases (Muslimatun and Fanggidae, 2009 ). to finance climate actions in NTT Province. Based poverty rate following Papua (30.05 percent) and cattle accounts for most of the livestock (577 on such understanding, a recommendation will Papua Barat (27.13 percent) (BPS, 2014). The 552), followed by buffalos (150 405) and horses The production of food in NTT is affected by high then be developed for better climate investments Human Development Index (HDI) of NTT is also (105 379). Fishing and aquaculture are also climate variability. An analysis of the historical and institutional structures dealing with climate the third lowest in the country, which is 68.28 important sectors in the province, with the majority climate data from six climate stations in NTT shows change. The NTT CPEIR provides an emphasis on percent compared to 73.29 percent nationally in of production coming from capture fisheries that the average rainfall in the last ten years (1996- climate adaptation, although a rapid assessment 2012 (BPS, 2013b). In 2009, income per capita (97.49 per cent) and only a small percentage 2005) was higher than the long-term historical related to climate mitigation is also carried out. in NTT was 4,884,655 Rupiah in comparison to from aquaculture (2.51 per cent). Aside from fish, average (Montgomery et al., 2010). The study also The CPEIR in NTT also considers the gender the national average of 21, 483,003 (BPS, 2010). some of the main products from the sector are found that there is enough rainfall during the four responsiveness and poverty sensitivity of climate Around 40 percent of people aged over 10 in NTT shrimp, squid, sea cucumber and seaweed. months of the rainy season to grow NTT traditional actions and expenditure allocations in NTT . had either not attended or completed primary main food crops. Crop water requirements are school, with another 31.20 per cent having only Finally, the forestry sector accounts for a small approximately a monthly minimum 200 mm The NTT CPEIR was implemented using the completed primary school (BPS, 2010). Beyond percentage of production in the primary industry for rain fed rice and 100 mm per month for common methodology applied in other countries those, 22.39 per cent had completed some form sector, mainly from harvesting sandalwood secondary crops such as maize, peanuts, cassava with several adjustments. The conceptual of junior high school, with the remaining amount (Santalum album). and vegetables. The study however found that framework of this study is shown on Figure 1. completing high school and very small percentage there is high variability in the rainfall of important The stages implemented in the NTT CPEIR are achieving some form of tertiary education (BPS, Climate Vulnerability. As most households are months at the onset months (December, January) detailed below: 2010). employed the in primary industries, food insecurity is a recurring problem in the province. Nearly all of Figure 1 The Conceptual Framework of Sub-National CPEIR in NTT The largest sector in NTT is the primary industries the districts in NTT fall within the 100 most food sector, including farming, forestry and fishing, insecure districts in Indonesia (Kieft and Soekarjo, Agreement on definition which employs 68.15 per cent of workers (BPS, 2007). In 2007, 91.4 per cent of households in of climate change List of climate change Identify key sectors 2010). The remaining percentage of workers West Timor reported being food insecure. The and climate change policy and institutions are employed in the services sector (9.48 per causes of food insecurity are largely climatic. With expenditure cent), restaurants and trade (6.90 per cent), a long dry season, no major rivers and only a few the manufacturing sector (6.23 per cent) and perennial streams, communities in NTT suffer construction, transport, warehousing and from water scarcity and are prone to drought. For communication sectors (2 to 5 per cent). Other the most part, farms do not have irrigation, soil sectors accounted for less than 2 per cent of fertility is poor and inputs are expensive, which Budget and Realized employees. contribute to increasing vulnerability of many Cost effectiveness (Programs, Activities, List of climate change Achievement  Impact Outputs) adaptation activities households (Montgomery et. al., 2010). IDR Rice, both wet and dry land farming, is the major agricultural product in NTT. From 2005 to 2009, During El Nino years, the start of the monsoon is both the volume and harvested area of rice often delayed and the amount of rainfall reduced,

3 4 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Background

with climate related issues. A focused-group 1. Policy analysis at the provincial and district discussion was carried out to triangulate levels. The analysis focuses on local climate information collected on 20-21 October 2014. change policies, strategies and plans, See Annex 1 for the list of participants. including subnational policies, their linkages with the national policies and the financing and 3. Budget and expenditure analysis. The analysis implementation plans. It includes reviewing examined the historical trend of government some of the provincial and district policies that budget and non-government funding allocated directly or indirectly relate to climate change, and spent to finance climate action. In previous particularly in relation to the RAN-GRK, national CPEIR studies, it was sufficient to RAD GRK, RAN-API and the medium-term focus on the climate change relevance of development plans (RPJM). It also examines public expenditures. However, for the purpose other legislations that have a direct impact of this sub-national CPEIR for Indonesia, it is on the delivery of climate change related important to recognize that local governments activities, such as legislations in agriculture and depend significantly on the intergovernmental infrastructure development. The analysis was fiscal transfers from the central level, large carried out based on government’s documents part of which has predetermined allocations and in-depth interviews with stakeholders at for specific activities or comes in the form of the provincial and district levels. conditional grants. The amount of financial resources over which local governments have 2. Institutional analysis including accountability authority is through discretionary spending and and coordination mechanisms for climate is relatively small. To account for this condition change. The NTT CPEIR examined the critical for determining budgeting decision, the current institutional arrangements dealing CPEIR study in NTT investigated, in addition with climate related issues and identify where to local level expenditures, how the central improvements could be made. It assessed government transfers funds to provinces and the institutions responsible for climate related districts along with how funds are spent in issues, the coordination mechanism amongst relation to national climate change policies institutions, the processes of resource and plans. allocation and effectiveness monitoring for climate related activities. Since this is the first 4. District case study. Manggarai, Sumba Timur subnational climate public expenditure and and Sabu Raijua districts were selected for institutional review assessment in Indonesia, case studies.. All three districts are part of the a thorough assessment of decentralization UNDP SPARC Project. The three districts have policies was carried out. Decentralization has different natural environment. East Sumba is an implication on the fiscal and administrative known for its dry land areas, Manggarai as relationship between national, provincial wetland areas, while the islands of Sabu Raijua and district governments in providing public have a dry climate. Due to the availability of services. The analysis relied on government data, the in-depth analysis was mainly focused documents and also in-depth interviews with on Sumba Timur, while providing a snapshot relevant stakeholders from agencies dealing about climate expenditures in other districts.

5 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Background

with climate related issues. A focused-group The results of the analysis are expected to 1. Policy analysis at the provincial and district discussion was carried out to triangulate feed in to the design of financing plans for levels. The analysis focuses on local climate information collected on 20-21 October 2014. climate adaptation in other locations that have change policies, strategies and plans, See Annex 1 for the list of participants. similar natural environments with the selected including subnational policies, their linkages districts. with the national policies and the financing and 3. Budget and expenditure analysis. The analysis implementation plans. It includes reviewing examined the historical trend of government The scope of the study – To obtain a full picture some of the provincial and district policies that budget and non-government funding allocated on the overall mitigation and adaptation directly or indirectly relate to climate change, and spent to finance climate action. In previous expenditures, the budget analysis was carried particularly in relation to the RAN-GRK, national CPEIR studies, it was sufficient to out focusing on 15-25 and 19 agencies/offices RAD GRK, RAN-API and the medium-term focus on the climate change relevance of at the provincial and district level respectively. development plans (RPJM). It also examines public expenditures. However, for the purpose The in-depth analysis was then carried out other legislations that have a direct impact of this sub-national CPEIR for Indonesia, it is on agriculture (food production) as the case on the delivery of climate change related important to recognize that local governments study due to the data availability. The case of activities, such as legislations in agriculture and depend significantly on the intergovernmental food production covers many sectors including infrastructure development. The analysis was fiscal transfers from the central level, large agriculture, infrastructure (public work), carried out based on government’s documents part of which has predetermined allocations livelihoods, and water resources. No available and in-depth interviews with stakeholders at for specific activities or comes in the form of data on the link between health, biodiversity the provincial and district levels. conditional grants. The amount of financial and seawater level with climate change makes resources over which local governments have it impossible to analyze the effectiveness of 2. Institutional analysis including accountability authority is through discretionary spending and expenditures in those sectors. and coordination mechanisms for climate is relatively small. To account for this condition change. The NTT CPEIR examined the critical for determining budgeting decision, the This report presents the results of CPEIR current institutional arrangements dealing CPEIR study in NTT investigated, in addition assessment at the provincial and district levels. with climate related issues and identify where to local level expenditures, how the central This report first summarizes the subnational improvements could be made. It assessed government transfers funds to provinces and financial management in Indonesia to provide the institutions responsible for climate related districts along with how funds are spent in the overall context of the fiscal decentralization issues, the coordination mechanism amongst relation to national climate change policies in Indonesia that shapes local governments’ institutions, the processes of resource and plans. spending. Climate policies and the institutional allocation and effectiveness monitoring for setting dealing with climate change issues are climate related activities. Since this is the first 4. District case study. Manggarai, Sumba Timur then discussed, before the results of the budget subnational climate public expenditure and and Sabu Raijua districts were selected for analysis are presented. The overall analysis and institutional review assessment in Indonesia, case studies.. All three districts are part of the recommendations are provided after the story a thorough assessment of decentralization UNDP SPARC Project. The three districts have from Sumba Timur is presented in detail. policies was carried out. Decentralization has different natural environment. East Sumba is an implication on the fiscal and administrative known for its dry land areas, Manggarai as relationship between national, provincial wetland areas, while the islands of Sabu Raijua and district governments in providing public have a dry climate. Due to the availability of services. The analysis relied on government data, the in-depth analysis was mainly focused documents and also in-depth interviews with on Sumba Timur, while providing a snapshot relevant stakeholders from agencies dealing about climate expenditures in other districts.

5 6 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Setting the Context

2. Fiscal decentralization and subnational budget Coordinate and monitor the implementation of process deconcentrated affairs, which are the national government’s responsibilities being implemented Decentralization in Indonesia started with the at the local level. issuance of Law 22/1999 that transferred the authority to provide a number of public services This section discusses in detail the fiscal to the district/municipality level. Some affairs are decentralization in Indonesia to set the context compulsory for district governments to implement, before the findings of the analysis are providedDRAFT in 2 .2 while others are optional depending on the local the next sections. It is important to understand the potential in each district (Table 1). In the case of authority in providing public services was devolved Settingdistricts thein NTT, Context all the optional affairs are being to the subnational level and the relationship implemented in the province. Law 22/1999 between the national, provincial and district 2.was F iscalfurther decentralizati revised by Lawon 32/2004. and subnational Several budgetlevel in theprocess management of public finance. This adjustments introduced by the Law 32/2004 section first provides a comprehensive discussion Decentralizationinclude: i) introducing in Indonesia the directstarted election with the of issuancesub- of Lawon the22/1999 fiscal that decentralization transferred the and authority the subnational to provide a number of public services to the district/municipality level. Some affairs are compulsory for district govenationalrnments heads; to implement, ii) providing whileclarity others on the obligatoryare optional dependingbudget onprocess, the local before potential the fiscalin each landscape district (Table in 1). functionsIn the case of of thedistricts local in governments,NTT, all the optional and iii) affairs areNTT being is presented.implemented The in sectionthe province. also concludesLaw 22/1999 wasreaffirming further revised the role by ofLaw provinces 32/2004. as Severalrepresentatives adjustments introducedwith several by highlightsthe Law 32/2004 that provide include: basis i) introducing for our theof directthe central election government of sub -innational the regions. heads; ii) providing analysisclarity onpresented the obligatory in the later functions sections. of the local governments, and iii) reaffirming the role of provinces as representatives of the central government in the regions. Table 1 List of Public Services Devolved to the District Level Table 1 List of Public Services Devolved to the District Level

Compulsory affairs Optional affairs

• Education; • Transportation; • Fisheries and marine • Health; • Information and • Agriculture • Environment; Informatics; • Forestry • Public Works; • Land registry and • Energy and mineral • Spatial Planning; planning; resourcesI • Development planning; • Unity and politic affairs; • Tourism • Housing; • Special autonomy, public • Industry • Youth and Sport; government, financial • Trade • Investment; administration of local • Transmigration • Cooperative society and government, Small and Medium stakeholders, staff, and Enterprise ; code; • Population and Civil • Community and village Registry; empowerment ; • Employment; • Social; • Food security; • Culture; • Woman empowerment • Statistics; and children protection; • Administration; and • Family planning and • Library. prosperous family;

Source: adapted from the Regional Autonomy Law Source: adapted from the Regional Autonomy Law Provinces are responsible for the provision of the following public affairs, particularly when they need to be performed across districts:

• Plan and control development 7 • Plan, use, and monitor the provincial spatial plan • Peace and security • Provide strategic facilities across districts • Health • Education and human resource development • Environmental management • Civil registry • Other administrative affairs.

15 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Setting the Context Setting the Context

2.1. Development policies as the basis for the budgeting Budgets are then drafted within the relevant Setting the Context process ministries and institutions. Based on the Renja K/L and RKP, government ministries and institutions Budgets are allocated according to development will then draft Ministry’s or Institution’s Work Plan 2. Fiscal decentralization and subnational budget Coordinate and monitor the implementation of plans. Law No. 25/2004 regulates that national and Budget (RKA K/L). The draft will then be process deconcentrated affairs, which are the national development planning is used as the basis of discussed with the national parliament and then government’s responsibilities being implemented the budgeting process (Figure 2). At the national reviewed by the Ministry of Finance. After being Decentralization in Indonesia started with the at the local level. level, there are several categories of development reviewed, the Draft National Government Budget issuance of Law 22/1999 that transferred the plans. The long-term development plan (RPJP) (RAPBN) will then be prepared. After the approval authority to provide a number of public services This section discusses in detail the fiscal is a national development plan for a period of 20 of the draft, it will be enacted as the State Budget to the district/municipality level. Some affairs are decentralization in Indonesia to set the context years. Every five years, the government prepares (APBN) through a law. The State Budget consists compulsory for district governments to implement, before the findings of the analysis are providedDRAFT in 2 .2 the Medium Term Development Plan (RPJM) of both government revenue and expenditure. while others are optional depending on the local the next sections. It is important to understand the guided by the RPJP, which contains development Presidential Decree (Keputusan Presiden/ potential in each district (Table 1). In the case of authority in providing public services was devolved priorities, macroeconomic framework, the Keppres) further details the implementation of the Settingdistricts thein NTT, Context all the optional affairs are being to the subnational level and the relationship direction of fiscal policy, as well as programs State Budget referring to Government Regulation implemented in the province. Law 22/1999 between the national, provincial and district within government ministries and institutions. (Peraturan Pemerintah/PP) No.90/2010 on 2.was F iscalfurther decentralizati revised by Lawon 32/2004. and subnational Several budgetlevel in theprocess management of public finance. This Ministries and institutions then refer to the RPJM Ministry/Institution’s Work Plan and Budget adjustments introduced by the Law 32/2004 section first provides a comprehensive discussion when drafting their five-year period Strategic Plan Drafting. Almost every year, the Minister of Decentralizationinclude: i) introducing in Indonesia the directstarted election with the of issuancesub- of Lawon the22/1999 fiscal that decentralization transferred the and authority the subnational to provide (Renstra K/L). These strategic plans act as the Finance (Peraturan Menteri Keuangan/PMK) a number of public services to the district/municipality level. Some affairs are compulsory for district govenationalrnments heads; to implement, ii) providing whileclarity others on the obligatoryare optional dependingbudget onprocess, the local before potential the fiscalin each landscape district (Table in guidelines for the one-year period work plans for issues a regulation providing instructions for the 1). functionsIn the case of of thedistricts local in governments,NTT, all the optional and iii) affairs areNTT being is presented.implemented The in sectionthe province. also concludesLaw 22/1999 ministries and institutions (Renja K/L). The RPJM preparation of the Ministry’s or Institution’s Work wasreaffirming further revised the role by ofLaw provinces 32/2004. as Severalrepresentatives adjustments introducedwith several by highlightsthe Law 32/2004 that provide include: basis i) introducing for our is also used as a guideline for the five-year period Plan and Budget (RKA K/L). The most current theof directthe central election government of sub -innational the regions. heads; ii) providing analysisclarity onpresented the obligatory in the later functions sections. of the local Government Work Plan (RKP). The RKP guides regulation is RMF No. 136/2014. DRAFT 2.2 governments, and iii) reaffirming the role of provinces as representatives of the central government in the the government budgeting process. regions. Table 1 List of Public Services Devolved to the District Level Figure 2 National and subnational budget process Formatted: Font: Bold, English (Australia), Table 1 List of Public Services Devolved to the District Level Figure 2 National and subnational budget process Check spelling and grammar

Compulsory affairs Optional affairs

National Renstra Guidance Guidance Detailed • Education; • Transportation; • Fisheries and marine Renja - KL RKA-KL Government KL APBN • Health; • Information and • Agriculture • Environment; Informatics; • Forestry • Public Works; • Land registry and • Energy and mineral Guidance Refer to • Spatial Planning; planning; resourcesI • Development planning; • Unity and politic affairs; • Tourism RPJP Guidance RPJM To be Guidance RKP RAPBN APBN • Housing; • Special autonomy, public • Industry National National Detailed • Youth and Sport; government, financial • Trade administration of local • Investment; • Transmigration Referring Referring Diserasikan melalui Musrenbang • Cooperative society and government, Small and Medium stakeholders, staff, and Guidance RPJM To be RKP Guidance Enterprise ; code; RPJP Local RAPBD APBD Local detailed Local • Population and Civil • Community and village Registry; empowerment ; Guidance Refer to • Employment; • Social; • Food security; • Culture; Guidance Guidance • Woman empowerment • Statistics; Local Renstra Renja - RKA - Detailed and children protection; • Administration; and Government SKPD SKPD SKPD APBD • Family planning and • Library. prosperous family; Planning Budgeting Source: adapted from the Regional Autonomy Law Source: adapted from the Regional Autonomy Law Provinces are responsible for the provision of the following public affairs, particularly when they need to be Source:Source: adapted adapted from from relevant relevant regulations regulations performed across districts: Budgets are then drafted within the relevant ministries and institutions. Based on the Renja K/L and RKP, • Plan and control development 7 government8 ministries and institutions will then draft Ministry’s or Institution’s Work Plan and Budget (RKA • Plan, use, and monitor the provincial spatial plan K/L). The draft will then be discussed with the national parliament and then reviewed by the Ministry of • Peace and security Finance. After being reviewed, the Draft National Government Budget (RAPBN) will then be prepared. After • Provide strategic facilities across districts the approval of the draft, it will be enacted as the State Budget (APBN) through a law. The State Budget • Health consists of both government revenue and expenditure. Presidential Decree (Keputusan Presiden/Keppres) further details the implementation of the State Budget referring to Government Regulation (Peraturan • Education and human resource development Pemerintah/PP) No.90/2010 on Ministry/Institution’s Work Plan and Budget Drafting. Almost every year, the • Environmental management Minister of Finance (Peraturan Menteri Keuangan/PMK) issues a regulation providing instructions for the • Civil registry preparation of the Ministry’s or Institution’s Work Plan and Budget (RKA K/L). The most current regulation is • Other administrative affairs. RMF No. 136/2014.

Provincial, district and city governments are allocated budgets through a similar process with the national government (Figure 1). Government Regulation (PP) No. 58/2005 on Local Financial Management and the 15 Ministry of Home Affair’s regulation on Guidelines for Budget Drafting No.37/2014 regulates how budgets are allocated to local governments. They stipulate that The the programs and activities of provincial, district and city governments should support the achievement of overall national development goals. Local governments are also expected to prepare their own long-term local development plan (RPJP Daerah) for a period of 20 years. This plan uses the central government long-term plan (National RPJP) as a guideline. The medium-term plans of local governments (local RPJM) are developed using the National RPJM and the Provincial/District/Municipality RPJP as guidelines. The local RPJM, subsequently, is used as referral for the development of 5-years Local Work Units’ Work Plan (Renstra SKPD). Local governments will then develop the Local Government’s Annual Work Plan (Renja SKPD), which further outlines the policies to be implemented at the local level. The Work Plan should be synchronized with National Government’s annual Work Plan (RKP).

17 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

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Provincial, district and city governments are or province will prepare the draft of the general allocated budgets through a similar process with policy for local budget (Kebijakan Umum APBD - the national government (Figure 1). Government KUA) and budget ceiling (PPAS). The draft is then Regulation (PP) No. 58/2005 on Local Financial discussed between the local government and the Management and the Ministry of Home Affair’s local representatives (DPRD) and should be agreed regulation on Guidelines for Budget Drafting upon by the end of July. Based on the agreed KUA No.37/2014 regulates how budgets are allocated and PPAS, each government office at the local level to local governments. They stipulate that The the will develop, deliver and discuss the local budget programs and activities of provincial, district and for the following fiscal year. The discussion process city governments should support the achievement should be completed on 30 November, when a of overall national development goals. Local draft regulation on the local budget should be governments are also expected to prepare their completed. The process of planning, budgeting, own long-term local development plan (RPJP verification of the national and local budgets is Daerah) for a period of 20 years. This plan uses summarized briefly in Table 2. the central government long-term plan (National RPJP) as a guideline. The role of the Ministry of Home Affair is to provide guidelines for provincial/district governments in The medium-term plans of local governments (local the planning and budget process. The Ministry RPJM) are developed using the National RPJM also develops the nomenclature for the APBD and the Provincial/District/Municipality RPJP as that should be referred by the provincial/district guidelines. The local RPJM, subsequently, is governments in the budgeting process. However, used as referral for the development of 5-years the Ministry of Home Affair cannot interfere in Local Work Units’ Work Plan (Renstra SKPD). the budgeting process, which is entirely under Local governments will then develop the Local the authority of the provincial/district/municipality Government’s Annual Work Plan (Renja SKPD), government and local parliaments. which further outlines the policies to be implemented at the local level. The Work Plan should be The budget process at the subnational level synchronized with National Government’s annual refers to the Ministerial Decree 13/2006. The Work Plan (RKP). Furthermore, the plan will be Decree stipulates the local agencies that can detailed down to the Local Budget General Policy play a role as budget users and also provides the (APBD) and the draft of Priority and Provisional budget codes that can be used by the provincial/ Budget Ceiling (Prioritas dan Plafon Anggaran district/municipality government. The Decree also Sementara/PPAS). These drafts should be mutually regulates the management of local budget (APBD) agreed between local governments and the local at the provincial/district level. Governor/Regent/ parliament as the basis for the drafting the Local Mayor are responsible for the overall management Government Budget Document (APBD). of government budget within their jurisdictions at the subnational level. In each locality, there is a 2.2. National and subnational budget process unit dealing with the management of government budget and implementing APBD. The unit plays The process of developing local budgets is a role as the General Treasury at the provincial/ regulated by Regulation of the Minister of Home district/municipality level. In the implementation Affairs No. 21/2011. The local budget process of the budget, the heads of government agencies starts in January every year and should be at the provincial/district/municipality level will be completed in December 31. Local government assigned as the budget users (Pegguna Anggaran). budgeting starts with discussions in villages. Local governments should then carry out budgeting in The budget users have the responsibility to an efficient and timely way. The head of district disburse public finance to deliver the plans and

9 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

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Provincial, district and city governments are or province will prepare the draft of the general Table 2 Local Government Budgeting Process allocated budgets through a similar process with policy for local budget (Kebijakan Umum APBD - Revenue National Level Provincial/District Level the national government (Figure 1). Government KUA) and budget ceiling (PPAS). The draft is then Source Regulation (PP) No. 58/2005 on Local Financial discussed between the local government and the Management and the Ministry of Home Affair’s local representatives (DPRD) and should be agreed Jan President decides on general direction and budget priorities. Line ministries evaluate Musrembang Desa – Consultation process their baseline budget estimates from MTEF and prepare proposals for new initiatives. at the village level to develop the village regulation on Guidelines for Budget Drafting upon by the end of July. Based on the agreed KUA Bappenas and the Ministry of Finance (MOF) evaluate the baseline and proposals for new development plan. No.37/2014 regulates how budgets are allocated and PPAS, each government office at the local level initiatives. to local governments. They stipulate that The the will develop, deliver and discuss the local budget Feb The Fiscal Policy Agency (FPA) and Director General Budget in MOF establish the level of financial resources available. The FPA prepares the economic assumptions and revenue programs and activities of provincial, district and for the following fiscal year. The discussion process forecast for the budget, thus establishing the maximum level of expenditure given the city governments should support the achievement should be completed on 30 November, when a government’s deficit target. of overall national development goals. Local draft regulation on the local budget should be Apr Bappenas and MOF jointly issue program priorities and indicative budget ceilings for The development of the Action Plan (Rencana governments are also expected to prepare their completed. The process of planning, budgeting, each line ministry. Kerja) of local offices (Satuan Kerja Perangkat Daerah or SKPD) own long-term local development plan (RPJP verification of the national and local budgets is May Cabinet approves the Government Work Plan (RKP), no later than mid-May. It is then The formalization of the Action Plan of Local Daerah) for a period of 20 years. This plan uses summarized briefly in Table 2. submitted to Parliament, along with the fundamentals of fiscal policies, macroeconomic Government (Rencana Kerja Pemerintah the central government long-term plan (National framework and policy priorities. The government and parliament discuss this in a Daerah or RKPD) RPJP) as a guideline. The role of the Ministry of Home Affair is to provide preliminary hearing, which provides the reference for ministries in preparing their work plan and budget proposals (RKA-KL). guidelines for provincial/district governments in May MOF and Bappenas discuss with the Parliament Budget Committee and Commission The medium-term plans of local governments (local the planning and budget process. The Ministry -June XI, the broad macroeconomic and fiscal policy objectives, including energy subsidies RPJM) are developed using the National RPJM also develops the nomenclature for the APBD and transfers to local governments. Line ministries also meet with their respective and the Provincial/District/Municipality RPJP as that should be referred by the provincial/district Parliamentary sectoral commissions to discuss their work plans and proposed expenditure. guidelines. The local RPJM, subsequently, is governments in the budgeting process. However, June Following agreement with parliament on budget policies and priorities, in mid-June MOF Discussion and agreement on the General issue a circular letter on “temporary ceilings”, including a preliminary budget ceiling for Policy of Local Budget (Kebijakan Umum APBD used as referral for the development of 5-years the Ministry of Home Affair cannot interfere in each ministry. Ministries and agencies formulate their work plan and budget proposals – KUA) between governor or district heads Local Work Units’ Work Plan (Renstra SKPD). the budgeting process, which is entirely under (RKA-KL). with local parliaments Discussion on the initial documents of Local governments will then develop the Local the authority of the provincial/district/municipality government priorities and the budget ceiling Government’s Annual Work Plan (Renja SKPD), government and local parliaments. (Prioritas dan Plafon Aggaran Sementara – which further outlines the policies to be implemented PPAS) at the local level. The Work Plan should be The budget process at the subnational level July Ministries and agencies discuss their RKA-KL with their related Parliamentary committees The development of Work and Budget Plan of and, by 15 July, the finalised RKA-KL is submitted to Bappenas and MOF. Bappenas review local government offices (Rencana Kerja dan synchronized with National Government’s annual refers to the Ministerial Decree 13/2006. The the RKA-KL to ensure conformity with the RKP. DG Budget checks that the proposals are Anggaran or RKA SKPD) and the development Work Plan (RKP). Furthermore, the plan will be Decree stipulates the local agencies that can consistent with the ceilings and with approved forward estimates, unit cost standards of the draft of local budget (APBD) detailed down to the Local Budget General Policy play a role as budget users and also provides the and classifications. (APBD) and the draft of Priority and Provisional budget codes that can be used by the provincial/ Aug MOF compiles all the RKA-KL and submits to Cabinet, along with Financial Notes and Budget Proposal. The President delivers his Budget Speech to Parliament on 16th August, Budget Ceiling (Prioritas dan Plafon Anggaran district/municipality government. The Decree also along with the draft budget documents. Sementara/PPAS). These drafts should be mutually regulates the management of local budget (APBD) Sept agreed between local governments and the local at the provincial/district level. Governor/Regent/ Oct The Annual Budget Act is enacted by Parliament by the end of October. Discussion and agreement between Governor/ parliament as the basis for the drafting the Local Mayor are responsible for the overall management Mayor/Regent and provincial/district/ Government Budget Document (APBD). of government budget within their jurisdictions at municipality parliaments on the draft of APBD the subnational level. In each locality, there is a Nov The RKA-KL that has been approved by the Parliament is enacted as a Presidential Decree on Detailed State Budget (APBN). unit dealing with the management of government 2.2. National and subnational budget process Nov-Des Following to the Presidential Decree and final approval of Parliament’s sectoral committee, budget and implementing APBD. The unit plays the DG Budget prepares disbursement warrants (SAP-SK). The process of developing local budgets is a role as the General Treasury at the provincial/ Dec The budget authorization document (DIPA) is issued which serves as authorization to incur Finalization of the local regulation on APBD – regulated by Regulation of the Minister of Home district/municipality level. In the implementation expenses for each activity of the line ministries/agencies. formalization Budget revision is possible during implementation, if there are changes in fiscal policy Development of List of Expenditure (Daftar Affairs No. 21/2011. The local budget process of the budget, the heads of government agencies or macroeconomic analysis or if there is a need for re-allocation of budget between Pengisian Anggaran or DPA) of provincial/ starts in January every year and should be at the provincial/district/municipality level will be organization, projects, or expenditures types or if there is a need to use the reserve. This district agencies or offices completed in December 31. Local government assigned as the budget users (Pegguna Anggaran). revision is done only after the submission of the first semester realization report. budgeting starts with discussions in villages. Local Jan Budget Implementation governments should then carry out budgeting in The budget users have the responsibility to an efficient and timely way. The head of district disburse public finance to deliver the plans and

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programs approved for respective agency. The development at the local level. At the end of the budget users are also responsible to make payment fiscal year, the performance of local government for the procurement of goods and services as part in the spending and the quality of public services of the financial management role at the local level. provided is assessed. The financial report will Budgets are disbursed according to the planning be held accountable to the parliaments and also process. After the budget document has been audited by BPK. approved for the relevant fiscal year, the activities and programs will be detailed in the budget A number of aspects can be improved to ensure documents and the amount of the available more effective and efficient budget process. The budget. The disbursement of funds and types of existing process that is carried out manually may activities should be carried out as specified in the still leave some rooms for manipulation or fraud, budget implementation list (DIPA). Finally, as part particularly considering the high number of the of the accountability mechanism, a budget report budget items within a province. Moving towards will be developed by the government, which will e-budgeting, where the budgeting process is later be audited. The report is made available to carried out using an online system, such as the public. the case of Jakarta Province, can significantly increase transparency in the budget process. The Local governments prepare the financial report budget process is also inflexible to accommodate on the actual disbursement of the budget any sudden change throughout the fiscal year. A allocated. Each government agency at the local revision to the budget can be carried out in the level prepare a financial report as the basis of the mid of the fiscal year, however, no major change is development of a consolidated local government usually allowed. financial report. The report should be submitted to Governor/Mayor/Regent at least two months 2.3. Subnational financial management after the end of the fiscal year. The report should then be submitted by Governor/Mayor/Regent Decentralization in Indonesia started with the to the Supreme Audit Body (Badan Pemeriksa issuance of Law 22/1999 that transferred the Keuangan or BPK) at least three months after the authority to provide a number of public services end of the fiscal year. Based on the review of BPK, to the district/municipality level. Eleven important the provincial/district/municipality government public services were devolved to the local provides response to the review and also revises level, including education and culture, health, the financial report. Moreover, Governor/Mayor/ agriculture, industry and trade, communications, Regent will present the financial report to the capital investment, public works, cooperatives provincial/district/municipality parliament. and labour, environment and land management Following the approval of the parliament, the (Table 1). Law 22/1999 was further revised by finalization of the report and a provincial/district/ Law 32/2004. Several adjustments introduced municipality regulation on formalizing the report by the Law 32/2004 include: i) introducing should be completed within one month. the direct election of sub-national heads; ii) providing clarity on the obligatory functions of The existing budget process in Indonesia the local governments, and iii) reaffirming the is systematic and fairly transparent. The role of provinces as representatives of the central involvement of local communities is enabled government in the regions. through the community-level dialogs or meetings (musrembangdes), where communities can The recent revision to the Local Autonomy law (Law propose for activities in their villages to be 23/2014) emphasizes the role of the provincial financed by the district budget. Local parliaments level in Indonesia’s decentralized setting. The play a role as the balancing power in budget Law also provides more role to governors as the

11 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

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programs approved for respective agency. The development at the local level. At the end of the representative of the national government at the is intended to cover civil servant wages of sub- budget users are also responsible to make payment fiscal year, the performance of local government subnational level. national governments (basic allocation) including for the procurement of goods and services as part in the spending and the quality of public services the base salaries, family assistance and other of the financial management role at the local level. provided is assessed. The financial report will Revenue. To finance public service provision at the allowances, with the remaining portion distributed Budgets are disbursed according to the planning be held accountable to the parliaments and also local level, the Law 25/1999 on Fiscal Balancing to district and provincial governments, using a process. After the budget document has been audited by BPK. (later amended to Law 33/2004) regulates the formula consisting of fiscal capacity, fiscal need approved for the relevant fiscal year, the activities fiscal relationship between the national and and personnel spending. and programs will be detailed in the budget A number of aspects can be improved to ensure subnational governments. Local governments are documents and the amount of the available more effective and efficient budget process. The provided with an authority to generate their own Shared revenues (DBH) aim to distribute taxes budget. The disbursement of funds and types of existing process that is carried out manually may revenues and the shared revenues generated and natural resources (fees and royalties) from activities should be carried out as specified in the still leave some rooms for manipulation or fraud, from major taxes and natural resources. District the national government to the producing local budget implementation list (DIPA). Finally, as part particularly considering the high number of the own-source revenues remain low, whilst, the governments. Taxes that are returned to the of the accountability mechanism, a budget report budget items within a province. Moving towards provincial level has a wider tax basis which allows producing regions using the revenue sharing will be developed by the government, which will e-budgeting, where the budgeting process is it to have greater fiscal autonomy. Taxes collected mechanism include: personal income and later be audited. The report is made available to carried out using an online system, such as at the provincial level include: taxes on vehicles, cigarette taxes. The shared revenues from oil and the public. the case of Jakarta Province, can significantly fuels, and ground water; while taxes that can be gas, mining, fisheries, forestry and geothermal increase transparency in the budget process. The collected at the district level include: advertising, energy are known as revenue sharing from Local governments prepare the financial report budget process is also inflexible to accommodate hotels, restaurants, entertainment, and sand natural resource. The Fiscal Balancing Law also on the actual disbursement of the budget any sudden change throughout the fiscal year. A mining. The implementation of the revised law updated the percentage of shared-revenues from allocated. Each government agency at the local revision to the budget can be carried out in the on local revenues, beginning in 2013, provides taxes and natural resources distributed between level prepare a financial report as the basis of the mid of the fiscal year, however, no major change is districts with the authority to collect and manage governmental levels (Table 3). Shared revenues development of a consolidated local government usually allowed. property taxes, which then becomes one of the from taxes and natural resources are the second financial report. The report should be submitted biggest source of revenues for many districts. largest transfers to the subnational levels. to Governor/Mayor/Regent at least two months 2.3. Subnational financial management after the end of the fiscal year. The report should To enable district governments to perform their According to Law 33/2004, the DAK aims to then be submitted by Governor/Mayor/Regent Decentralization in Indonesia started with the administrative functions, the Fiscal Balancing Law finance activities that are determined by the to the Supreme Audit Body (Badan Pemeriksa issuance of Law 22/1999 that transferred the has also introduced several intergovernmental central government, based on national priorities to Keuangan or BPK) at least three months after the authority to provide a number of public services fiscal transfers (IFTs) to balance the revenues be implemented at the local level. Several sectors end of the fiscal year. Based on the review of BPK, to the district/municipality level. Eleven important and expenditures assigned at the local level. The are financed by the DAK, including education, the provincial/district/municipality government public services were devolved to the local transfers account for a major portion of the district health, fisheries, agriculture, environment, and provides response to the review and also revises level, including education and culture, health, and provincial governments’ revenues. The three infrastructure (including roads, irrigation and the financial report. Moreover, Governor/Mayor/ agriculture, industry and trade, communications, IFTs currently implemented in Indonesia are: water supply). The Law 33/2004 regulates the Regent will present the financial report to the capital investment, public works, cooperatives an unconditional grant (Dana Alokasi Umum - allocation of conditional grants on the basis of provincial/district/municipality parliament. and labour, environment and land management DAU), conditional grants (Dana Alokasi Khusus three criteria: Following the approval of the parliament, the (Table 1). Law 22/1999 was further revised by - DAK), and shared revenues from taxes and • General criterion, which gives priority to finalization of the report and a provincial/district/ Law 32/2004. Several adjustments introduced natural resources (Dana Bagi Hasil - DBH). The districts with fiscal capacity lower than the municipality regulation on formalizing the report by the Law 32/2004 include: i) introducing importance of each revenue source varies widely. national average. The definition of fiscal should be completed within one month. the direct election of sub-national heads; ii) capacity in the general criteria of DAK is similar providing clarity on the obligatory functions of The objective of the unconditional grant (DAU) is to to the distribution formula of the DAU. The existing budget process in Indonesia the local governments, and iii) reaffirming the address the imbalance between local expenditures is systematic and fairly transparent. The role of provinces as representatives of the central and revenues. The source of funds for DAU is net • Specific criterion, which considers specific local involvement of local communities is enabled government in the regions. national revenues -- currently 26 per cent of the characteristics to choose the eligible regions, through the community-level dialogs or meetings total national government revenue allocated for including: all districts in Papua province and (musrembangdes), where communities can The recent revision to the Local Autonomy law (Law DAU. DAU will then be distributed as much as 90 poor regions, coastal areas, international propose for activities in their villages to be 23/2014) emphasizes the role of the provincial per cent to the district level, and the remaining 10 bordering regions, regions that are vulnerable financed by the district budget. Local parliaments level in Indonesia’s decentralized setting. The per cent is distributed across provinces. The DAU to disasters, and regions with food insecurity. play a role as the balancing power in budget Law also provides more role to governors as the

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Table 3 Percentage allocations for shared-revenue from taxes and natural resources

Other districts Revenue Source Central Provincial Producing in the same All districts in districts province Indonesia

Mining - Land-rent 20 16 64 0 0 Mining – Royalty 20 16 32 32 0 Land & Building Tax 9 16.2 64.8 0 10 Land/Building Transfer Fee 0 16 64 0 20 Personal Income Tax 80 8 12 0 0 Forest License Fee 20 16 64 0 0 Forest Resource Rent 20 16 32 32 0 Reforestation levy 60 0 40 0 0 Oil 84.5 3.1 6.2 6.2 0 Gas 69.5 6.1 12.2 12.2 0 Geothermal - central share deposit 20 16 32 32 0 Geothermal - Land rent and production 20 16 32 32 0

Source: Law 33/2004 and Government Regulation 55/2005.

• Technical criterion, which integrates technical as the host of a project funded by international considerations developed by a sectoral grants. The on-granting mechanism is channelled ministry. For instance, the technical criterion through the budgetary system, known as on- for environment related funding is the budget and on-treasury. combination of the length of rivers, the level of river pollution, total land area, and population. Expenditure. Local government expenditures can either be direct or indirect. Direct expenditure is Adjustment fund is also made available for spending on capital goods, goods and a portion provincial/district governments to implement of the spending on staff. Indirect expenditure specific national policies at the subnational level. is costs incurred that are not influenced by the The fund consists of: incentive grants (Dana presence or absence of a program or activity. The Insentif Daerah – DID); specific allocations for indirect expenditure is usually disbursed monthly teachers, support for school operational, and and includes spending on personnel, grants, and support to build local infrastructure. DID is social assistance. provided for provinces/districts on the basis of the performance in financial management, education, Provincial governments implement national economic development and welfare. policies at the local level. The national government finances national priorities at the local level through District and provincial governments are restricted a deconcentration fund. The deconcentration in the finances they can raise. Local governments fund is earmarked for specific activities proposed cannot receive international grants directly from in the work plan of relevant ministries at the bilateral or multilateral institutions. Grants should national level. Provincial governments implement be channelled through the on-granting mechanism deconcentrated activities. The execution of the (Table 4). The on-granting mechanism is where national government budget for the implementation a technical ministry at the national level serves of deconcentrated activities at the local level is

13 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

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Table 3 Percentage allocations for shared-revenue from taxes and natural resources Table 4 The on-granting machanism

Other districts On-granting mechanism Process Revenue Source Central Provincial Producing in the same All districts in districts province Indonesia 1. Minister / Head of Non-Ministerial Government Agencies proposes a plan of activities to be financed by foreign grants to the Minister for Planning 2. The Minister of Planning assesses the feasibility of the proposed activities in accordance with the provisions of the legislation Mining - Land-rent 20 16 64 0 0 3. Based on the result of the assessment, the Minister of Planning includes the activities proposed in the list of foreign grants Mining – Royalty 20 16 32 32 0 4. Based on the list, the Minister / Head of Non-Ministerial Government Agencies proposes financing activities to the Minister of Land & Building Tax 9 16.2 64.8 0 10 Finance 5. The Ministry of Finance based on the proposal, sets the amount of the foreign grants before negotiations with prospective Land/Building Transfer Fee 0 16 64 0 20 foreign donors Personal Income Tax 80 8 12 0 0 6. Minister / Head of Non-Ministerial Government Agencies propose the amount of grants and list the names of proposed Local Forest License Fee 20 16 64 0 0 Government as a grant recipient to the Minister Forest Resource Rent 20 16 32 32 0 7. The Ministry of Finance determines the total amount of loans and foreign grants 8. The Minister of Finance issues a letter granting approval to the respective local government after a Foreign Grant Agreement Reforestation levy 60 0 40 0 0 is signed Oil 84.5 3.1 6.2 6.2 0 9. Based on the letter, an agreement can be signed Gas 69.5 6.1 12.2 12.2 0 10. Following the agreement, the Minister of Finance or his duly authorized official will sign an agreement with local governments and channel the funds to local governments Geothermal - central share deposit 20 16 32 32 0 Geothermal - Land rent and production 20 16 32 32 0

Source: Law 33/2004 and Government Regulation 55/2005. regulated through the Ministerial Decree 190/ to build irrigation infrastructure is divided based PMK.05/2012 on Payment Procedures for the on the total area covered by an irrigation unit as • Technical criterion, which integrates technical as the host of a project funded by international implementation of the state budget. The process follows. District governments are responsible to considerations developed by a sectoral grants. The on-granting mechanism is channelled of planning for the deconcentration fund is carried build an irrigation unit for a total area of 0-1000 ministry. For instance, the technical criterion through the budgetary system, known as on- out at the national level, therefore, it is outside the hectare. Provincial governments are responsible for environment related funding is the budget and on-treasury. authority of the provincial government although for building an irrigation unit for a total area of combination of the length of rivers, the level of the proposals are submitted by the provincial 1000 - 3000 ha, while the Central Government is river pollution, total land area, and population. Expenditure. Local government expenditures can government. responsible to build an irrigation unit for an area either be direct or indirect. Direct expenditure is above 3000 ha. Adjustment fund is also made available for spending on capital goods, goods and a portion At the district level, the national government provincial/district governments to implement of the spending on staff. Indirect expenditure can also finance activities that are tasked to 2.4. Fiscal landscape in NTT specific national policies at the subnational level. is costs incurred that are not influenced by the district governments to implement, known ask The fund consists of: incentive grants (Dana presence or absence of a program or activity. The Tugas Pembantuan (or Assisting Task). Tugas Development activities at the subnational level Insentif Daerah – DID); specific allocations for indirect expenditure is usually disbursed monthly Pembantuan is implemented after line ministries are financed by different financial sources. The teachers, support for school operational, and and includes spending on personnel, grants, and at the national level instruct district governments provincial government manages the largest support to build local infrastructure. DID is social assistance. to implement specific activities at the district level. portion of finance at the subnational level, with the provided for provinces/districts on the basis of the The line ministries then finance the activities. total budget four times larger than the budget of performance in financial management, education, Provincial governments implement national Similar to the deconcentration fund, the proposals a district (Table 5). Around 6% of the provincial economic development and welfare. policies at the local level. The national government are submitted by the district level of government budget is transferred to the district or village finances national priorities at the local level through while the planning and budgeting process of Tugas level. At the district level, around 10-17 percent District and provincial governments are restricted a deconcentration fund. The deconcentration Pembantuan is carried out at the national level. of revenues were earmarked for specific activities in the finances they can raise. Local governments fund is earmarked for specific activities proposed –through conditional grant transfers or DAK. Both cannot receive international grants directly from in the work plan of relevant ministries at the Provincial and district governments submit the national and provincial governments have bilateral or multilateral institutions. Grants should national level. Provincial governments implement proposals for activities financed by Dana specific budget allocated to finance activities at be channelled through the on-granting mechanism deconcentrated activities. The execution of the Dekonsentrasi and Tugas Pembantuan to the the district level. The planning and budgeting (Table 4). The on-granting mechanism is where national government budget for the implementation national government. For instance, based on process of these activities are carried out by the a technical ministry at the national level serves of deconcentrated activities at the local level is Government Regulation 20/2006 the authority national and provincial governments, although the

13 14 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Setting the Context

Table 5 NTT’s Fiscal Landscape in 2012

International and non-government Government revenue Government spending finance2

Deconcentration fund: IDR 696 billion (all earmarkerd for activities in NTT province) Tugas Pembantuan: IDR 784 billion (all National earmarkerd for activities in all districts in NTT) Revenue: Spending: Around IDR 70 billion in 2012 IDR 2.241 trillion IDR 2,164 trillion (No clarity whether the figure is specifically for (Conditional grants were IDR 57 billion or 3%. (IDR 136 million transferred to districts/ the year or the total project budget)

Province The grants are earmarked) villages or 6%) Sumba Timur: IDR 629 billion Sumba Timur: IDR 563 billion Around IDR 15 billion in Sumba Timur and 10 (10% earmarked) Manggarai: IDR 554 billion billion in Manggarai. Zero in Sabu Raijua Manggarai: IDR 543 billion Sabu Raijua: IDR 285 billion (No clarity whether the figure is specifically for (10% earmarked) the year or the total project budget) District Sabu Raijua: IDR 303 billion (17% earmarked)

Source : Authors’ own calculation from budget documents implementation is carried out at the district level, through Deconcentration Activities and Tugas Provincial fiscal landscape-- The Provincial Pembantuan. Government of NTT relies heavily on financial transfers from the national government (Figure 3). District governments can propose activities National transfers, including DAU, DAK, DBH and to be financed by Tugas Pembantuan fund to adjustment fund, finance more than half of the the national government. Unless for national budget (79.5%). Local revenues from taxes and programs, district government can propose fees were much lower (20.5%) than the national activities that are according to the local need. The average in 2012 (46.5%). In 2012, there was a national government will make the final decision sharp increase of income from the adjustment on the proposals and the total amount allocated fund transferred by the national government (or for each district. classified as “Others” in Figure 3). The adjustment fund is a national transfer allocated to assist In NTT, the total budget for Deconcentration all regions to implement national policies and Activities and Tugas Pembantuan in 2012 was priorities. The fund mainly consists of allocation almost 68 per cent of the total provincial spending for school operational grant (BOS) and allowances in the same year (Table 5). The contribution of for teacher. The adjustment fund is specifically non-government finance to development is only earmarked for school operational grant and 3 percent of the total budget in 2012. The data certified teacher allowance. Both are classified presented in the RPJM however do not specify as “direct spending”, the percentage of direct whether the figure was an annual budget or a spending compared to the total budget increased total budget of the entire project duration/period. significantly. Otherwise, the ratio of direct to The contribution of international finance is 1.8- indirect spending only increased slightly between 2.6 per cent. The detailed discussion about the 2008-2012. fiscal situation in the district and provincial levels is provided below.

2 Source: Provincial Medium-Term Development Plan 2013

15 DRAFT 2.2

Provincial fiscal landscape-- The Provincial Government of NTT relies heavily on financial transfers from the national government (Figure 3). National transfers, including DAU, DAK, DBH and adjustment fund, finance more than half of the budget (79.5%). Local revenues from taxes and fees were much lower (20.5%) than the Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia national averageProvincial in 20 Climate12 (46.5 Public%). In Expenditure 2012, there and wasInstitutional a sharp Review, increase East Nusaof income Tenggara from of Indonesia the adjustment fund transferred by the national government (or classified as “Others” in Figure 3). The adjustment fund is a national transfer allocated to assist all regions to implement national policies and priorities. The fund mainly consists of allocation for school operational grant (BOS) and allowances for teacher. The adjustment fund is specifically earmarked for school operational grant and certified teacher allowance. Both are classified as Setting the Context Setting“direct the spending”, Context the percentage of direct spending compared to the total budget increased significantly. Otherwise, the ratio of direct to indirect spending only increased slightly between 2008-2012.

Table 5 NTT’s Fiscal Landscape in 2012 Fiqure 3 NTT’s fiscal capacity Figure 3 NTT’s fiscal capacity International and non-government Government revenue Government spending 2.500 2.500 finance2 2.000 Deconcentration fund: IDR 696 billion (all 2.000 earmarkerd for activities in NTT province) Tugas Pembantuan: IDR 784 billion (all 1.500

National 1.500 earmarkerd for activities in all districts in NTT)

Revenue: Spending: Around IDR 70 billion in 2012 1.000 IDR 2.241 trillion IDR 2,164 trillion (No clarity whether the figure is specifically for 1.000 (Conditional grants were IDR 57 billion or 3%. (IDR 136 million transferred to districts/ the year or the total project budget) Province The grants are earmarked) villages or 6%) IDR Billions 500 IDR Billions 500 Sumba Timur: IDR 629 billion Sumba Timur: IDR 563 billion Around IDR 15 billion in Sumba Timur and 10 (10% earmarked) Manggarai: IDR 554 billion billion in Manggarai. Zero in Sabu Raijua - - Manggarai: IDR 543 billion Sabu Raijua: IDR 285 billion (No clarity whether the figure is specifically for 2008 2009 2010 2011 2012 (10% earmarked) the year or the total project budget) 2008 2009 2010 2011 2012 District Sabu Raijua: IDR 303 billion (17% earmarked) Own revenue Fiscal transfers Others Direct spending Indirect spending

Source: Authors’ own calculationSource: from Authors’ budget documents own calculation from budget documents Source : Authors’ own calculation from budget documents The average proportion of the provincial government spendingThe remaining on personnel 19% betweenand 15% 2010 were and allocated 2012 was for 35 implementation is carried out at the district level, Thepercent, average with theproportion lowest proportion of the of 25provincial per cent in 2012.goods The provincialand building/construction government increased respectively the spending in through Deconcentration Activities and Tugas Provincial fiscal landscape-- The Provincial governmentfor local communities spending inon the personnelform of grant between (belanja hibah2012.) and Associal previously assistance discussed, (bantuan thesosial) spending significantly on Pembantuan. Government of NTT relies heavily on financial 2010from andonly 20125 per wascent 35in 2010percent, to 43 with per thecent lowest in 2012, while personnel,around 8 per grants, cent wasand transfersocial assistancered to the candistrict be or transfers from the national government (Figure 3). proportionvillage level of between25 per cent 2010 in-2012. 2012. The The remaining provincial 19% and 15%classified were allocated as indirect for goods spending, and building/construction while the direct respectively in 2012. As previously discussed, the spending on personnel, grants, and social assistance can be District governments can propose activities National transfers, including DAU, DAK, DBH and government increased the spending for local spending is mainly on capital goods and building/ classified as indirect spending, while the direct spending is mainly on capital goods and building/construction. to be financed by Tugas Pembantuan fund to adjustment fund, finance more than half of the communitiesThe ratio between in the formthe direct of grant and (belanja indirect hibah)spending is ratherconstruction. proportional, The exceptratio between in 2012 duethe todirect the reasonand the national government. Unless for national budget (79.5%). Local revenues from taxes and anddescribed social assistance above (Figure (bantuan 3). Four sosial) main significantly sectors that had theindirect highest spending budget isallocated rather proportional, in 2012 are public except works in programs, district government can propose fees were much lower (20.5%) than the national from(infrastructure), only 5 per centfinancial in 2010 assistance to 43 perfor centcommunity in development2012 due toprogram the reason (known described as ANGGUR above (FigureMERAH), activities that are according to the local need. The average in 2012 (46.5%). In 2012, there was a 2012,health while service around and education 8 per cent (Figure was transferred 4). to 3). Four main sectors that had the highest budget national government will make the final decision sharp increase of income from the adjustment the district or village level between 2010-2012. allocated in 2012 are public works (infrastructure),DRAFT 2.2 on the proposals and the total amount allocated fund transferred by the national government (or for each district. classified as “Others” in Figure 3). The adjustment FigureFigure 4 4 Spending Spending ofof NTTNTT government government offices offices in 2012in 2012 fund is a national transfer allocated to assist 250 In NTT, the total budget for Deconcentration all regions to implement national policies and 200 Activities and Tugas Pembantuan in 2012 was priorities. The fund mainly consists of allocation almost 68 per cent of the total provincial spending for school operational grant (BOS) and allowances 150 of Rupiah in the same year (Table 5). The contribution of for teacher. The adjustment fund is specifically ns 100 non-government finance to development is only earmarked for school operational grant and 50 3 percent of the total budget in 2012. The data certified teacher allowance. Both are classified 25 in Billio presented in the RPJM however do not specify as “direct spending”, the percentage of direct 0 whether the figure was an annual budget or a spending compared to the total budget increased total budget of the entire project duration/period. significantly. Otherwise, the ratio of direct to The contribution of international finance is 1.8- indirect spending only increased slightly between 2.6 per cent. The detailed discussion about the 2008-2012. fiscal situation in the district and provincial levels is provided below.

Source: Authors’ own calculation from budget documents Source: Authors’ own calculation from budget documents Formatted: Space After: 10 pt 2 Source: Provincial Medium-Term Development Plan 2013

The NTT provincial government also receives conditional grants, which are earmarked with specific activities at 15 16the provincial level. The largest conditional grant in NTT is to build infrastructure, which consists of irrigation, water supply, housing, roads and transportation (Figure 5). The proportion of the conditional grant for infrastructure to the total DAK declined from 87 per cent in 2010 to 61 per cent in 2014. The total DAK transfer for environment and forestry was only 1-2 per cent between 2010-2014. The DAK transfer for environment is intended for preventing water and air pollution, while the DAK for forestry is to rehabilitate critical land, protected area, mangrove and forest areas under the control of the provincial government.

Figure 5 Conditional grant transfers to the Provincial Government

90 80 70

Trade 60 Forestry & Environment 50 Agriculture & Fisheries

IDR Billion 40 Facilities Infrastructure 30 Health 20 Education 10 0 2010 2011 2012 2013 2014

Source: Authors’ own calculation from budget documents

26 DRAFT 2.2

Figure 4 Spending of NTT government offices in 2012 250

200 150 of Rupiah

ns 100 50 in Billio 0

Source: Authors’ own calculation from budget documents Formatted: Space After: 10 pt

Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia The NTT provincial government also receives conditional grants, which are earmarked with specific activities at the provincial level. The largest conditional grant in NTT is to build infrastructure, which consists of irrigation, water supply, housing, roads and transportation (Figure 5). The proportion of the conditional grant for infrastructure to the total DAK declined from 87 per cent in 2010 to 61 per cent in 2014. The total DAK transfer for environment and forestry was only 1-2 per cent between 2010-2014. The DAK transferSetting for environmentthe Context is intended for preventing water and air pollution, while the DAK for forestry is to rehabilitate critical land, protected area, mangrove and forest areas under the control of the provincial government.

FigureFigure 5 5Conditional Conditional grant grant transfers transfers to to the the Provincial Provincial Government Government

90 80 70

Trade 60 Forestry & Environment 50 Agriculture & Fisheries

IDR Billion 40 Facilities Infrastructure 30 Health 20 Education 10 0 2010 2011 2012 2013 2014

Source: Authors’ own calculationSource: from Authors’budget documents own calculation from budget documents financial assistance for community development infrastructure to the total DAK declined from 87 program (known as ANGGUR MERAH), health per cent in 2010 to 61 per cent in 2014. The total service and education (Figure 4). DAK transfer for environment and forestry was only 1-2 per cent between 2010-2014. The DAK 26 The NTT provincial government also receives transfer for environment is intended for preventing conditional grants, which are earmarked with water and air pollution, while the DAK for forestry specific activities at the provincial level. The is to rehabilitate critical land, protected area, largest conditional grant in NTT is to build mangrove and forest areas under the control of infrastructure, which consists of irrigation, water the provincial government. supply, housing, roads and transportation (Figure 5). The proportion of the conditional grant for

17 DRAFT 2.2

Figure 4 Spending of NTT government offices in 2012 250

200 150 of Rupiah ns 100 50 in Billio 0

Source: Authors’ own calculation from budget documents Formatted: Space After: 10 pt

Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia The NTT provincial government also receives conditional grants, which are earmarked with specific activities at the provincial level. The largest conditional grant in NTT is to build infrastructure, which consists of irrigation, water supply, housing, roads and transportation (Figure 5). The proportion of the conditional grant for infrastructure to the total DAK declined from 87 per cent in 2010 to 61 per cent in 2014. The total DAK transfer for environment and forestry was only 1-2 per cent between 2010-2014. The DAK transferSetting for environmentthe Context is Setting the Context intended for preventing water and air pollution, while the DAK for forestry is to rehabilitate critical land, protected area, mangrove and forest areas under the control of the provincial government.

FigureFigure 5 5Conditional Conditional grant grant transfers transfers to to the the Provincial Provincial Government Government District fiscal landscape – the dependency of cent in 2012. The exceptionally low proportion in district governments to the national transfer Sabu Raijua is mainly because it is a newly formed 90 (DAU, DBH, DAK and adjustment fund) is district. This low portion of own sourceDRAFT revenues 2.2 much higher than the provincial level (Figure is compensated by the intergovernmental fiscal 80 6). The contribution of the own source revenue transfers of the national government. Most of District fiscal landscape – the dependency of district governments to the national transfer (DAU, DBH, DAK 70 inand Sumba adjustment Timur fund) and isManggarai much higher is thanonly the6-7 provincialper levelthe (Figure national 6). government The contribution transfers of the are own not source being

Trade cent,revenue while in Sumbain Sabu Timur Raijua and wasManggarai 3 per iscent only in6 -7 per cent,earmarked, while in as Sabu the Raijuaunconditional was 3 per transfer cent in makes 2012, 60 Forestry & Environment 2012,increasin increasingg from only from 1 per only cent 1 inper 2010. cent The in proportion2010. of theup theown majority source revenueof the transfer. at the districtThe transfers is generally that 50 Agriculture & Fisheries Thelow withproportion the national of the averageown source of the revenue proportion at the of districts/municipalitiesare earmarked own– conditional source revenue grants to or the DAK total –

IDR Billion revenue is 9.9 per cent in 2012. The exceptionally low proportion in Sabu Raijua is mainly because it is a newly Facilities district is generally low with the national average contributed between 10-17 per cent of the total 40 formed district. This low portion of own source revenues is compensated by the intergovernmental fiscal Infrastructure of the proportion of districts/municipalities own budget. 30 transfers of the national government. Most of the national government transfers are not being earmarked, as source revenue to the total revenue is 9.9 per Health the unconditional transfer makes up the majority of the transfer. The transfers that are earmarked – 20 conditional grants or DAK – contributed between 10-17 per cent of the total budget. Education Figure 6 Fiscal capacity of three SPARC Pilot Distrcts 10 Figure 6 Fiscal capacity of three SPARC Pilot Districts 0 700,00 2010 2011 2012 2013 2014 600,00

500,00 Source: Authors’ own calculationSource: from Authors’budget documents own calculation from budget documents 400,00 financial assistance for community development infrastructure to the total DAK declined from 87 300,00

program (known as ANGGUR MERAH), health per cent in 2010 to 61 per cent in 2014. The total IDR Million service and education (Figure 4). DAK transfer for environment and forestry was 200,00 100,00 only 1-2 per cent between 2010-2014. The DAK 26 The NTT provincial government also receives transfer for environment is intended for preventing - conditional grants, which are earmarked with water and air pollution, while the DAK for forestry 2010 2011 2012 2010 2011 2012 2010 2011 2012 specific activities at the provincial level. The is to rehabilitate critical land, protected area, Kab. Sumba Timur Kab. Manggarai Kab. Sabu Raijua largest conditional grant in NTT is to build mangrove and forest areas under the control of Own revenue Transfer earmarked Transfer not earmarked Others infrastructure, which consists of irrigation, water the provincial government. supply, housing, roads and transportation (Figure Source: Authors’ own calculationSource: from budget Authors’ documents own calculation from budget documents 5). The proportion of the conditional grant for The district government expenditures on personnel was higher than the provincial level, which is more than 50 The district government expenditures on personnel is mainly because of the community development per cent between 2010-2012 (Figure 7). Sabu Raijua has the lowest proportion of the personnel spending mainly wasbecause higher it is than a new the district, provincial where level, many which offices is more have not beenprogram fully staffed. that channels Spending direct for localfinancial communities support infor thanthe form 50 ofper grants cent is between much lower 2010-2012 at the district (Figure level, rangedcommunities’ between 3-11%. livelihoods. At the provincial Such program level, the does higher not 7).portion Sabu of Raijua budget has allocated the lowest for communities proportion of is themainly becauseexist ofat thethe communitydistrict level. development Manggarai hasprogram the lowest that personnelchannels direct spending financial mainly support because for communities’ it is a new livelihoods. portion Such programof grants does for notcommunities exist at the in district 2012. level. The Manggarai has the lowest portion of grants for communities in 2012. The spending on goods and capitals varied district, where many offices have not been fully spending on goods and capitals varied between between 35% to 65% with the highest Sabu Raijua. Similar to the spending pattern in the provincial level, three staffed.main agencies Spending with thefor highestlocal communities spending are publicin the works, health35% toand 65% education. with the highest Sabu Raijua. Similar form of grants is much lower at the district level, to the spending pattern in the provincial level, ranged between 3-11%. At the provincial level, the three main agencies with the highest spending are higher portion of budget allocated for communities public works, health and education.

17 18

27 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Setting the Context

DRAFT 2.2 Figure 7 Proportion of district spending Figure 7 Proportion of district spending 100% 90% 80% 70% DRAFT 2.2 60% 50% Figure 7 Proportion of district spending 40% 100% 30% 90% 20% 80% 10% 70% 0% 60% 2010 2011 2012 2010 2011 2012 2010 2011 2012 50% Kab. Sumba Timur Kab. Manggarai Kab. Sabu Raijua 40% 30% Personnel Grants Capital Goods 20% Source: Authors’ own calculationSource: from Authors’ budget documents own calculation from budget documents 10% At the0% district level, the conditional grant transfer constitutesNational around government 10-17 per spending cent ofat thethe local total level: revenue of the districtAt the district governments2010 level, the in2011 conditional2012. The2012 conditional grant transfer2010 grants 2011are allocated2012 for specific2010 purposes2011 therefore2012 the use of theseconstitutes grants around is specificallyKab. Sumba10-17 Timurearmarked.per cent of The the highest totalKab. propo ManggaraiDeconcentrationrtion of the transfers activities isKab. mostly Sabu are Raijuafor infrastructurefinanced by (i.e. roadsrevenue and of dams) the anddistrict education governments sectors (Figurein 2012. 8). the national government and implemented by Personnel Grants Capital Goods The conditional grants are allocated for specific provincial governments. The deconcentration fund Source:purposes Authors’ therefore own calculationthe useFigure fromof 8these Conditionalbudget grants documents grantis transfersis earmarked to three specificpilot districts to finance deconcentrated specificallySabu earmarked. Raijua The highest proportion Sumba Timur of activities, which Manggarai are the national’s priorities Atthe the transfers district is level, mostly the for conditional infrastructure grant (i.e. transfer roads constitutesimplemented around 10 at- 17the per provincial cent of level.the total The revenue amount of the district governments in 2012. The conditional grants are allocated for specific purposes thereforeTrade the use of and 80dams) and education sectors (Figure 80 8). the deconcentration 120 fund decreased significantly these grants is specifically earmarked. The highest proportion of the transfers is mostly for infrastructure (i.e. 70 roads 70 and dams) and education sectors (Figure 8). in 2013 100 from IDR 650 billion to IDR 335Forestry billion & 60 60 Environment 80 Agriculture & 50 50 Figure 8 Conditional grant transfers to three pilot district Fisheries 40 Figure 8 Conditional 40 grant transfers to 60 three pilot districts Facilities 30 Sabu Raijua 30 Sumba Timur 40 Manggarai IDR Billion Billion IDR

20 Billion IDR 20 IDR Billion IDR Infrastructure 20 Trade 8010 8010 120 - - - Health 70 70 100 Forestry & 2011 2012 2013 Environment 2011 2011 2014 60 2010 2012 2012 2013 2013

60 2014 2014 2010 2010 80 Education Agriculture & 50 50

Fisheries 40 40 60 Facilities Source: 30 Authors’ own calculation from budget 30 documents 40 Formatted: Justified IDR Billion Billion IDR

20 Billion IDR 20 IDR Billion IDR Infrastructure Formatted: Font: 9 pt, Not Bold 20 10 10 National government spending at the local level: - - - Health

2011 2012 2013 2011 2011 2014 2010 2012 2012 2013 2013 2014 2010 2014 Deconcentration2010 activities are financed by the national government and implemented Educationby provincial governments. The deconcentration fund is earmarked specific to finance deconcentrated activities, which are the national’s priorities implemented at the provincial level. The amount of the deconcentration fund decreasedSource: Authors’ significantly own calculation in 2013 from from budget IDR documents 650 billion to IDR 335 billion (Figure 9). This was compensated, Formatted: Justified Source: Authors’ own calculation from budget documents however, with the increase in the direct spending by the provincial government. This is mainly because the Formatted: Font: 9 pt, Not Bold National government spending at the local level:

Deconcentration activities are financed by the national government and implemented by provincial 19 28 governments. The deconcentration fund is earmarked specific to finance deconcentrated activities, which are the national’s priorities implemented at the provincial level. The amount of the deconcentration fund decreased significantly in 2013 from IDR 650 billion to IDR 335 billion (Figure 9). This was compensated, however, with the increase in the direct spending by the provincial government. This is mainly because the

28 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

DRAFT 2.2

Setting the Context national government started transferring the fund allocated for supporting school operations as an adjustment fund in 2013 as discussed previously, which was previously transferred as a deconcentration activity. The DRAFT 2.2 highest proportion of spending financed by the deconcentration fund in NTT was on education and agriculture services (Figure 9). Figure 7 Proportion of district spending Figure 9 Deconcentration funds allocated to NTT Provincial Government 2011-2013 Figure 9 Deconcentration funds allocated to NTT Provincial Government 2011-2013 Figure 7 Proportion of district spending 2011 2012 2013 100% 900 90% 800

80% 700 600 70% DRAFT 2.2 500 60% 400 300 50% 200 Figure 7 Proportion of district spending in Billions of Rupiah 40% 100 100% 0 30% 90% 20% 80% 10% 70% 0% 60% 2010 2011 2012 2010 2011 2012 2010 2011 2012 50% Kab. Sumba Timur Kab. Manggarai Kab. Sabu Raijua 40% Source: Authors’ own calculation from budget documents 30% Personnel Grants Capital Goods Source: Authors’ own calculation from budget documents 20% (Figure 9). This was compensated, however, previously, which was previously transferred as a Source: Authors’ own calculationSource: from Authors’ budget documents own calculation from budget documents The national government also spends its budget at the district level, through Tugas Pembantuan (TP). Similar 10% withto the the deconcentration increase in the activities, direct spendingthe planning by processthe of TPdeconcentration is carried out at activity. the national The highest level, proportionwhile the of At the0% district level, the conditional grant transfer constitutesNational around government 10-17 per spending cent ofat thethe local total level: revenue of the provincialimplementation government. is carried Thisout by is district mainly governments. because The TPspending fund is earmarked financed specific by the to deconcentration finance activities .fund districtAt the district governments2010 level, the in2011 conditional2012. The2012 conditional grant transfer2010 grants 2011are allocated2012 for specific2010 purposes2011 therefore2012 the use of theDistrict national governments government are then started responsible transferring for report the ing on thein NTT implementation was on education of the andassigned agriculture tasks to services the national government. The amount of the TP fund increased from IDR 615 billion in 2011 to IDR 994 billion in 2013 theseconstitutes grants around is specifically 10-17 earmarked.per cent of The the highest total propoDeconcentrationrtion of the transfers activities is mostly are for infrastructurefinanced by (i.e. fund allocated for supporting school operations (Figure 9). Kab. Sumba Timur Kab. Manggarai Kab. Sabu Raijua (Figure 10). The highest proportion of spending financed by the TP fund in NTT was on agriculture and health roadsrevenue and of dams) the anddistrict education governments sectors (Figurein 2012. 8). the national government and implemented by as an adjustment fund in 2013 as discussed Personnel Grants Capital Goods services (Figure 10). DRAFT 2.2 The conditional grants are allocated for specific provincial governments. The deconcentration fund Source:purposes Authors’ therefore own calculationthe useFigure fromof 8these Conditionalbudget grants documents grantis transfersis earmarked to three specificpilot districts to finance deconcentrated Figure 10 Tugas Pembantuan funds allocated to NTT Province in 2011-2013 specificallySabu earmarked. Raijua The highest proportion Sumba Timur of activities, which Manggarai are the national’s priorities Figure 10 Tugas Pembantuan funds allocated to NTT Province in 2011-2013 At the district level, the conditional grant transfer constitutes around 10-17 per cent of the total revenue of the the transfers is mostly for infrastructure (i.e. roads implemented at the provincial level. The amount of 1.000 district governments in 2012. The conditional grants are allocated for specific purposes thereforeTrade the use of and 80dams) and education sectors (Figure 80 8). the deconcentration 120 fund decreased significantly 900 these grants is specifically earmarked. The highest proportion of the transfers is mostly for infrastructure (i.e. 800 70 70 in 2013 from IDR 650 billion to IDR 335 billion roads and dams) and education sectors (Figure 8). 100 Forestry & 700 60 60 Environment 600 80 Agriculture & 500 50 50 Figure 8 Conditional grant transfers to three pilot district 400 60 Fisheries 40 Figure 8 Conditional 40 grant transfers to three pilot districts IDR Billions Facilities 300 30 Sabu Raijua 30 Sumba Timur 40 Manggarai 200

IDR Billion Billion IDR 100 20 Billion IDR 20 IDR Billion IDR Infrastructure 2013 20 Trade 0 10 10 120 80 80 2012 Health 70 - 70 - - 100 Forestry & 2011 2011 2012 2013 Environment 2011 2011 2014 60 2010 2012 2012 2013 2013

60 2014 2014 2010 2010 80 Education Agriculture & 50 50

Fisheries 40 40 60 Facilities Source: 30 Authors’ own calculation from budget 30 documents 40 Formatted: Justified IDR Billion Billion IDR 20 Billion IDR 20 IDR Billion IDR Infrastructure Formatted: Font: 9 pt, Not Bold 29 20 10 10 National government spending at the local level: - - - Health Ministries/Institutions

2011 2012 2013 2011 2011 2014 2010 2012 2012 2013 2013 2014 2014 2010

2010 Deconcentration activities are financed by the national government and implemented Educationby provincial governments. The deconcentration fund is earmarked specific to finance deconcentrated activities, which are Source: Authors’ own calculationSource: from Authors’ budget documentsown calculation from budget documents the national’s priorities implemented at the provincial level. The amount of the deconcentration fund decreasedSource: Authors’ significantly own calculation in 2013 from from budget IDR documents 650 billion to IDR 335 billion (Figure 9). This was compensated, Formatted: Justified Source: Authors’ own calculation from budget documents however, with the increase in the direct spending by the provincial government. This is mainly because the Formatted: Font: 9 pt, Not Bold2.5. Discussion and Summary National government spending at the local level: ✓ Government budget at all levels is developed based on development policies that are detailed in planning 19 28 20 Deconcentration activities are financed by the national government and implemented by provincial documents. The budgeting process – from planning to execution – requires twelve months. There is only a governments. The deconcentration fund is earmarked specific to finance deconcentrated activities, which are little room for adjustment in the middle of the fiscal year, however, such adjustment is also heavily the national’s priorities implemented at the provincial level. The amount of the deconcentration fund regulated, hence, very inflexible. decreased significantly in 2013 from IDR 650 billion to IDR 335 billion (Figure 9). This was compensated, ✓ By design, fiscal decentralization in Indonesia devolves the authority to manage public finance to three however, with the increase in the direct spending by the provincial government. This is mainly because the different levels of government: national, provincial and district level. The provincial and district levels rely mainly on the national government transfers as the main source of their revenues. The transfers range from conditional transfers that are earmarked for specific activities (Dana Alokasi Khusus) and 28 unconditional transfers that are transferred without specific conditions (Dana Alokasi Umum dan Dana Bagi Hasil). The conditional transfers make up less than 20 per cent of the total revenues of district governments. ✓ Although the authority to manage public services is mainly devolved to the district level, national and provincial governments also finance public services at the district level, through Deconcentration and Tugas Pembantuan funds. Hence, the management of public finance, including for climate change, should be mindful about overlapping activities financed by different levels. The decision making process for Deconcentration and Tugas Pembantuan funds relies with the national government, while the authority on the planning and delivery of intergovernmental fiscal transfers is devolved to the local level. Hence, earmarking of climate budget should use the intergovernmental fiscal transfers to finance national priorities at the district level, instead of using the Deconcentration fund and Tugas Pembantuan. This will allow for more coordination and well-targeted actions to the local situation. ✓ Provincial and district governments also provide direct financial support to local communities in the form of grants. The provincial government increased the spending for local communities in the form of grant (belanja hibah) and social assistance (bantuan sosial) significantly from only 5 per cent in 2010 to 43 per cent of the overall spending in 2012. Spending for local communities in the form of grants is much lower at the district level, ranged between 3-11%. ✓ District governments have limited fiscal space to finance public services due to the high proportion of

30 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

The national government also spends its budget change, should be mindful about overlapping at the district level, through Tugas Pembantuan activities financed by different levels. The (TP). Similar to the deconcentration activities, decision making process for Deconcentration the planning process of TP is carried out at the and Tugas Pembantuan funds relies with the national level, while the implementation is carried national government, while the authority on out by district governments. The TP fund is the planning and delivery of intergovernmental earmarked specific to finance activities. District fiscal transfers is devolved to the local level. governments are then responsible for reporting on Hence, earmarking of climate budget should the implementation of the assigned tasks to the use the intergovernmental fiscal transfers to national government. The amount of the TP fund finance national priorities at the district level, increased from IDR 615 billion in 2011 to IDR 994 instead of using the Deconcentration fund and billion in 2013 (Figure 10). The highest proportion Tugas Pembantuan. This will allow for more of spending financed by the TP fund in NTT was coordination and well-targeted actions to the on agriculture and health services (Figure 10). local situation.

2.5. Discussion and Summary l Provincial and district governments also provide direct financial support to local communities in l Government budget at all levels is developed the form of grants. The provincial government based on development policies that are increased the spending for local communities detailed in planning documents. The budgeting in the form of grant (belanja hibah) and social process – from planning to execution – assistance (bantuan sosial) significantly from requires twelve months. There is only a little only 5 per cent in 2010 to 43 per cent of the room for adjustment in the middle of the fiscal overall spending in 2012. Spending for local year, however, such adjustment is also heavily communities in the form of grants is much regulated, hence, very inflexible. lower at the district level, ranged between 3-11%. l By design, fiscal decentralization in Indonesia devolves the authority to manage public l District governments have limited fiscal finance to three different levels of government: space to finance public services due to the national, provincial and district level. The high proportion of spending on personnel. provincial and district levels rely mainly on The average proportion of the provincial the national government transfers as the main government spending on personnel between source of their revenues. The transfers range 2010 and 2012 was 35 percent, with the from conditional transfers that are earmarked lowest proportion of 25 per cent in 2012. The for specific activities (Dana Alokasi Khusus) district government expenditures on personnel and unconditional transfers that are transferred was higher than the provincial level, which is without specific conditions (Dana Alokasi more than 50 per cent between 2010-2012. Umum dan Dana Bagi Hasil). The conditional transfers make up less than 20 per cent of the l Local governments cannot receive international total revenues of district governments. grants directly from bilateral or multilateral l Although the authority to manage public institutions. Grants should be channelled services is mainly devolved to the district through the on-granting mechanism. The level, national and provincial governments on-granting mechanism is where a technical also finance public services at the district ministry at the national level serves as the host level, through Deconcentration and Tugas of a project funded by international grants. Pembantuan funds. Hence, the management of public finance, including for climate

21 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

21 22 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis

3. Climate change policy targets in the emission reduction will be nested to the national level at the moment. This section focuses on climate policies – both adaptation and mitigation – at the provincial level In NTT, the development of the provincial action with the reference to the national policies. The plan completed in 2012, and further legalized by action plan both in mitigation and adaptation are the Governor Regulation 40/2012. Based on the discussed, prior to discussing how the medium- provincial action plan to reduce emissions, NTT term planning document include mitigation and Province will reduce a total of 9.7 million tCO2e adaptation actions. which translates to approximately 1.27% of the national reduction target. The total greenhouse 3.1. Climate change mitigation gas emissions in the period of 2011-2020 in NTT would be 13.3 million tCO2e. Land-based The Government of Indonesia has committed sectors including agriculture, livestock and to reduce greenhouse gas emissions by 26 per forestry, contributed to most of the emissions. cent by 2020. With international support, it is The energy sector is the second largest emitter in expected that this figure would rise to as much NTT. The emissions from the land based sectors as 41 percent. Presidential Regulation 61/2011 for the period of 2011-2020 were predicted at on National Action Plan to reduce GHG emissions 8.35 million tCO2e. The emissions from waste in (RAN-GRK) underlies this commitment. The 2011-2012 was 2.04 million tCO2e or about 25% regulation details actions that need to be taken to of the total emissions of NTT Province, while the implement the commitment. Five broad sectors energy sector would generate as much as 2.9 are identified in the regulation where reductions million tCO2e in the same period. The expected will be achieved (Table 4): forestry and land use; emissions from waste up until 2020 will be 2.04 energy and transport; agriculture; industry; and million tCO2e. The provincial government aims waste management . The land-based sectors, to mitigate GHG as much as 9.7 million tCO2e including forestry, peatland and agriculture in 2020. The contribution of each sector to such contribute 680 m tCO2e, or 88.6% of the total emission reduction target is listed in Table 6. The reductions. The regulation uses the estimates contribution of NTT Province to reducing emission of business as usual (BAU) emissions trajectory could be considered low. However, considering contained in the Second National Communication the existing vulnerabilities in the province, the (SNC) as the 2020 baseline against which the focus should not be on reducing emissions. NTT reduction will be made. The 26% reduction target should rather focus on reducing the vulnerabilities in the regulation therefore would translate to the to the impact of climate change. emissions of 767m tCO2e in 2020. The mitigation actions to achieve the emission Following the development of the national targets reduction target are detailed in the Provincial in 2011, all provinces in Indonesia were required Action Plan to reduce GHG emissions, known as to develop a provincial action plan to detail climate the Rencana Aksi Daerah Penurunan Emisi Gas mitigate actions at the subnational level, making Rumah Kaca (RAD-GRK). These actions are listed a reference to the national level overall target. in Table 7. The RAD-GRK mentions that these There is no specific quota of emission reduction mitigation actions should be implemented by the target assigned to provincial governments as they government and financed by the provincial budget could develop the plan based on the local specific and the national government budget as well as the situation. There is no clarity how the subnational international finance.

23 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis Policy Analysis

Policy Analysis Table 6 National and NTT Emission Reduction Targets

National emission reduction target using NTT’s emission reduction target targets in the emission reduction will be nested to Sector using domestic resources 3. Climate change policy domestic resources (mtCO2e) (mtCO2e) the national level at the moment. This section focuses on climate policies – both Forestry & Peatland 672 adaptation and mitigation – at the provincial level In NTT, the development of the provincial action 5.33 Agriculture & Livestock 8 with the reference to the national policies. The plan completed in 2012, and further legalized by Industry & Commercial 10 action plan both in mitigation and adaptation are the Governor Regulation 40/2012. Based on the 2.6 discussed, prior to discussing how the medium- provincial action plan to reduce emissions, NTT Energy and transport 38 term planning document include mitigation and Province will reduce a total of 9.7 million tCO2e Waste management 48 1.178 adaptation actions. which translates to approximately 1.27% of the Total 767 9.708 national reduction target. The total greenhouse 3.1. Climate change mitigation gas emissions in the period of 2011-2020 in Source: Presidential Decree 61/2011 and NTT Local Action Plan (RAD) to Reduce GHG Emissions NTT would be 13.3 million tCO2e. Land-based The Government of Indonesia has committed sectors including agriculture, livestock and to reduce greenhouse gas emissions by 26 per forestry, contributed to most of the emissions. The existing government planning and budget already been implemented before the RAD-GRK cent by 2020. With international support, it is The energy sector is the second largest emitter in documents at the provincial level include references with co-benefits of emission reduction. On the other expected that this figure would rise to as much NTT. The emissions from the land based sectors to some mitigation activities. Mitigation activities that hand, some new RAD-GRK activities, particularly in as 41 percent. Presidential Regulation 61/2011 for the period of 2011-2020 were predicted at have been included in the government planning the waste, transport and energy sectors, have not on National Action Plan to reduce GHG emissions 8.35 million tCO2e. The emissions from waste in and budget documents are the ongoing or existing been included in the documents. Consequently, the (RAN-GRK) underlies this commitment. The 2011-2012 was 2.04 million tCO2e or about 25% activities which would most likely have been on them proposed activities cannot by law be implemented regulation details actions that need to be taken to of the total emissions of NTT Province, while the irrespective of the government’s recent commitment despite they are mentioned in the RAD-GRK. The implement the commitment. Five broad sectors energy sector would generate as much as 2.9 of greenhouse gas emission reduction. For instance trend of government expenditures on climate are identified in the regulation where reductions million tCO2e in the same period. The expected many mitigation activities proposed in the RAD-GRK mitigation actions is discussed in Section 5 of this will be achieved (Table 4): forestry and land use; emissions from waste up until 2020 will be 2.04 in the agriculture, forestry and livestock sector have report. energy and transport; agriculture; industry; and million tCO2e. The provincial government aims waste management . The land-based sectors, to mitigate GHG as much as 9.7 million tCO2e Table 7 Proposed mitigation actions based on NTT RAD-GRK including forestry, peatland and agriculture in 2020. The contribution of each sector to such Government revenue Proposed Mitigation Actions contribute 680 m tCO2e, or 88.6% of the total emission reduction target is listed in Table 6. The reductions. The regulation uses the estimates contribution of NTT Province to reducing emission • Evaluation of agricultural policy of business as usual (BAU) emissions trajectory could be considered low. However, considering • Development and rehabilitation of livestock grazing areas contained in the Second National Communication the existing vulnerabilities in the province, the Agriculture • Control of the use of chemical fertilizers • Exploiting the use of organic fertilizer and biomass (SNC) as the 2020 baseline against which the focus should not be on reducing emissions. NTT • The development of low-emission rice varieties reduction will be made. The 26% reduction target should rather focus on reducing the vulnerabilities • Evaluation of the livestock sector policy in the regulation therefore would translate to the to the impact of climate change. Livestock • Utilization of manure to biogas emissions of 767m tCO2e in 2020. • Utilization of biogas waste to compost The mitigation actions to achieve the emission • Evaluation of forestry policy • Rehabilitation of degraded lands, forests and watersheds Forestry Following the development of the national targets reduction target are detailed in the Provincial • Forest City Development in 2011, all provinces in Indonesia were required Action Plan to reduce GHG emissions, known as • Development of forest resource management with the community to develop a provincial action plan to detail climate the Rencana Aksi Daerah Penurunan Emisi Gas • Evaluation of transport sector policies mitigate actions at the subnational level, making Rumah Kaca (RAD-GRK). These actions are listed • Integrated transport planning • Rejuvenation of transport infrastructure a reference to the national level overall target. in Table 7. The RAD-GRK mentions that these • Fuel Subsidy public transport There is no specific quota of emission reduction mitigation actions should be implemented by the Transport • Increased emissions tax based on age • Traffic management, parking target assigned to provincial governments as they government and financed by the provincial budget • Development pedestrian and bike paths could develop the plan based on the local specific and the national government budget as well as the • Replacement of fuel by alternative fuels situation. There is no clarity how the subnational international finance. • Rehabilitation / routine road maintenance

23 24 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis

Government revenue Proposed Mitigation Actions

• Evaluation of the energy sector policy • The provision, management and improvement of renewable energy Energy • Use of Energy Saving Lamps (LED) • Biogas energy from garbage and livestock • Industrial sector policy evaluation Industry • The development of low-carbon technologies • The use of technology in reducing the ratio of carbonate • Evaluation of the waste sector policy Water • The preparation of the master plan for sewerage systems • Development of local water infrastructure and communal sewage system

Source: Rencana Aksi Daerah Penurunan Emisi Gas Rumah Kaca (RAD-GRK)

The forestry sector is the major contributor of 2. Efforts to reduce the impacts caused by climate the GHG emissions in Indonesia, mainly from change. deforestation and forest fire. However, the The climate change adaptation will be achieved contribution of deforestation in NTT to the total by improving the sustainability of the economy rate of deforestation at the national level is meager. and ecosystems. The Strategic Objectives of Depending on the methodologies, the annual RAN-API are to: deforestation in 2001-2011 ranged between 2,539 1. Build economic resilience ha/year, while the national deforestation rate of the 2. Support livelihoods that are resilient to same year was 896,181 ha/year. Despite the low climate change total annual deforestation, the total emissions from 3. Maintaining the sustainability of ecosystem the conversion of primary forest to secondary forest services or secondary forest to non-forest can reach up to 4. Strengthening resilience in urban areas, 1 million tCO2e per year if we convert the annual coastal areas and small islands deforestation area to GHG emissions. However, in NTT, there is no specific activity that are planned The specific objectives, strategies and cluster to avoid deforestation, as most of the activities are action plans according to different sectors are focused on forest rehabilitation. listed below in Table 8. Achieving these also requires cooperation across different sectors. 3.2. Climate change adaptation The RAN-API differs from the RAN-GRK in In 2014, the Government of Indonesia launched terms of the legal basis and specific target/ the National Adaptation Action Plan (Rencana measurement. The RAN-API does not have a Aksi Adaptasi Perubahan Iklim or RAN-API). legal basis as no specific regulation was issued to The purpose of the RAN-API is to provide implement it . Moreover, unlike the RAN-GRK, the guidance to provide direction for mainstreaming RAN-API does not have specific targets in climate climate change adaptation issues in the national adaptation. Referring to RAN-API, climate change development planning process. The RAN-API adaptation is directed to minimize the adverse states that adaptation to climate change involves: impacts of climate change that may inhibit the achievement of development programs. This close 1. Adjustment efforts in the form of strategies, link of climate change adaptation and government policies, management, technology and development plan causes a difficulty to determine attitudes so that the negative effects of climate the target of climate change adaptation with a change can be reduced to a minimum, and if single indicator. possible to utilize and maximize the positive effects

25 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis Policy Analysis

Government revenue Proposed Mitigation Actions Table 8 Strategies and actions for achieving economic resilience

• Evaluation of the energy sector policy • The provision, management and improvement of renewable energy Objectives Strategy Cluster Action Plan Energy • Use of Energy Saving Lamps (LED) • Biogas energy from garbage and livestock 1.1. Food Security Sub-Sector • Industrial sector policy evaluation Decreasing food production loss due to extreme weather Adjustment and development of farming systems Food Production Systems Adjustment Industry • The development of low-carbon technologies events and climate to climate change • The use of technology in reducing the ratio of carbonate Development of new growth areas of food production in areas with a low climate risk and minimum Development and application of change Agriculture and Aquaculture Area Expansion • Evaluation of the waste sector policy environmental impact (low emission) Water • The preparation of the master plan for sewerage systems Development of food security of farmers and Restoration and Development of Climate Proof Agricultural • Development of local water infrastructure and communal sewage system communities (micro) with a pattern of healthy and Infrastructure nutritious and balanced food, as well as the realization Source: Rencana Aksi Daerah Penurunan Emisi Gas Rumah Kaca (RAD-GRK) of food diversification to an optimum level Food Diversifications Acceleration

Innovative and Adaptive Technologies Development The forestry sector is the major contributor of 2. Efforts to reduce the impacts caused by climate Development of Information and Communication Systems the GHG emissions in Indonesia, mainly from change. (Climate and Technology) deforestation and forest fire. However, the The climate change adaptation will be achieved Support Program contribution of deforestation in NTT to the total by improving the sustainability of the economy 1.2. Energy Independence Sub-Sector rate of deforestation at the national level is meager. and ecosystems. The Strategic Objectives of The development of hydropower and geothermal energy in Restoration and conservation of catchment Restoration and Conservation of Catchment Area Depending on the methodologies, the annual RAN-API are to: areas with a low climate risk and supporting ecosystem area in the watershed as an energy source of deforestation in 2001-2011 ranged between 2,539 1. Build economic resilience conditions hydroelectric and geothermal power plants Renewable Energy Usage Expansion ha/year, while the national deforestation rate of the 2. Support livelihoods that are resilient to The development of bio-energy crops (biomass and Optimizing the utilization of organic waste and Development of Innovative and Adaptive Technology for biofuels) with high productivity and resilience to climatic biomass energy sources and the development of Biofuel Plant cultivation and Energy Plantation same year was 896,181 ha/year. Despite the low climate change stress biofuels (BBN) total annual deforestation, the total emissions from 3. Maintaining the sustainability of ecosystem Support Program Optimizing the utilization of organic waste for energy the conversion of primary forest to secondary forest services production and gas or secondary forest to non-forest can reach up to 4. Strengthening resilience in urban areas, Increased utilization of renewable energy sources in 1 million tCO2e per year if we convert the annual coastal areas and small islands remote villages deforestation area to GHG emissions. However, in 2.1. Public Health Sub-Sector NTT, there is no specific activity that are planned The specific objectives, strategies and cluster Identification and control of factors of vulnerability and Strengthening and updating of information and Identification and Control of Vulnerability and Risk Factors to avoid deforestation, as most of the activities are action plans according to different sectors are risk to public health health risk vulnerability to climate change Public health caused by Climate Change focused on forest rehabilitation. listed below in Table 8. Achieving these also Strengthening the awareness and utilization of early Development policy, of planning, networking, and Awareness System Enhancement and Early Warning warning system against outbreaks of infectious diseases cooperation among government agencies at the System Utilization against Infectious Diseases and Non- requires cooperation across different sectors. and non-communicable diseases caused by climate local, local and national levels regarding health Communicable diseases caused by Climate Change 3.2. Climate change adaptation change risks related to climate change Improvement of Regulation, Legislation, and Institutional The RAN-API differs from the RAN-GRK in Strengthening regulation legislation, and institutional Strengthening the capacity and early awareness Capacity in Central and Local Level against the Risks to In 2014, the Government of Indonesia launched terms of the legal basis and specific target/ capacity at central and local levels of climate change-related threats to health in the Public Health Brought by Climate Change community and government levels. the National Adaptation Action Plan (Rencana measurement. The RAN-API does not have a Improvement of science, technology innovation, and Science Advancement, Technology Innovation, and Public Aksi Adaptasi Perubahan Iklim or RAN-API). legal basis as no specific regulation was issued to community participation Participation Related to Health Adaptation to Climate Change The purpose of the RAN-API is to provide implement it . Moreover, unlike the RAN-GRK, the 2.2. Housing Sub-Sector Implementation of study and research on improving the Provision of supporting facilities for study and Studies and Research on Improving the Adaptive Housing guidance to provide direction for mainstreaming RAN-API does not have specific targets in climate housing security that is adaptive to climate change research activities concerning housing resilience Security climate change adaptation issues in the national adaptation. Referring to RAN-API, climate change to climate change Development and implementation of housing Housing Development and Management development planning process. The RAN-API adaptation is directed to minimize the adverse management integrated with the mitigation of climate Developing an affordable housing structure states that adaptation to climate change involves: impacts of climate change that may inhibit the change impact and sustainable development resilient to climate change impacts Community Empowerment Efforts

achievement of development programs. This close Improving understanding of stakeholders and the public Dissemination of information about housing Access to Decent and Affordable Housing 1. Adjustment efforts in the form of strategies, link of climate change adaptation and government regarding housing that is resilient to climate change resilient to the impacts of climate change to the government at various levels policies, management, technology and development plan causes a difficulty to determine Increased access to decent and affordable housing attitudes so that the negative effects of climate the target of climate change adaptation with a Preparation of climate change adaptation programs for housing sub-sector, referring to change can be reduced to a minimum, and if single indicator. the housing needs in the face of climate change possible to utilize and maximize the positive impacts effects Source: RAN-API

25 26 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis

Given the inherent difficulty in measuring progress Although there are no requirements for the in resilience building, the Ministry of Environment development of the RAD-API, in some provinces, has developed a tool to measure climate local governments have begun the process of vulnerability through an online data system discussing and planning for the development of called the Vulnerability Index Data Inventory local climate change adaptation plan. System (SIDIK). SIDIK can be used by provincial governments as inputs in the preparation of the Although the provincial government of NTT has provincial plan and for monitoring action plans. not developed RAD-API, but it has begun planning Currently, the vulnerability assessment within the for adaptation to climate change. In conjunction SIDIK system is measured based on the biophysics with the project “Strategic Planning and Action to and the socio-economic information of a province/ strengthen climate resilience Rural Communities district. The vulnerability assessment can identify in East Nusa Tenggara (SPARC)”, financed by the most critical factors of local vulnerability for the Special Climate Change Fund, dialogues which adaptation options can be devised. about climate adaptation have been initiated at the local level. SPARC activities, implemented in Despite the issuance of the RAN-API, it is still three pilot districts of East Sumba, Sabu Raijua unclear whether local governments should and Manggarai, focuses on strengthening and develop their own climate change adaptation developing climate-resilient institutions and plans (Rencana Aksi Daerah Adaptasi Perubahan rural communities and improving adaptation in Iklim – RAD-API). As there is no law or regulation three sectors: agriculture, water resources and stipulating the development of climate change livelihoods. The project has developed a list of adaptation plans, local governments are not adaptation strategies based on the results of the required to develop local adaptation plans. survey and analyses for each pilot district (Table 9).

Table 9 SPARC adaptation strategies

Selected SPARC adaptation strategies

• The use of high yielding varieties • Increased utilization of climate information and the use of pesticides • Socialization of the planting calendar • Development of agroforestry systems and garden plants • Development of coastal communities and institutions such as seaweed cultivation and businesses • Conservation of upland areas through measures such as agroforestry • Increased harvest index • Greening the coastal regions • Development of savannah areas • Development of an inventory system of local rice and pulse seeds (seed center) • Water saving and harvesting technologies • Reforestation for water conservation / expansion of rainwater • Improved transportation facilities to support agriculture • Efforts for adding value to agricultural products and household industries • Early warning systems and climate stations • Developing institutions for farmers such as information and finance • Improved drainage and irrigation • Development of a network or installation of climate stations • Conservation of water catchment areas

27 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis Policy Analysis

Given the inherent difficulty in measuring progress Although there are no requirements for the To ensure the provincial government is involved have been addressed (Table 10). Despite this in resilience building, the Ministry of Environment development of the RAD-API, in some provinces, in the implementation of the above activities, it inclusion, there is a lack of coherence between has developed a tool to measure climate local governments have begun the process of is imperative to ensure that these activities are policies, priorities and target indicators. This lack vulnerability through an online data system discussing and planning for the development of included in the planning document. Only after of coherence may reflect the quality of budgeting called the Vulnerability Index Data Inventory local climate change adaptation plan. they are being included in the planning document, and planning processes of the provincial System (SIDIK). SIDIK can be used by provincial it is possible for the government to finance government . For instance, Mission 5.13 aims to governments as inputs in the preparation of the Although the provincial government of NTT has such activities using the government budget. To develop climate change mitigation and adaptation provincial plan and for monitoring action plans. not developed RAD-API, but it has begun planning understand how climate adaptation is included systems, with a specific program of establishing Currently, the vulnerability assessment within the for adaptation to climate change. In conjunction in the planning document, the assessment of an information and communication system to SIDIK system is measured based on the biophysics with the project “Strategic Planning and Action to the medium-term development plan that gives improve the resilience of communities to climate and the socio-economic information of a province/ strengthen climate resilience Rural Communities directions to the annual work plan of the provincial change. However, the indicators and targets were district. The vulnerability assessment can identify in East Nusa Tenggara (SPARC)”, financed by government is carried out in the next sub-section. not specifically consistent with the previously the most critical factors of local vulnerability for the Special Climate Change Fund, dialogues mentioned program. Rather, the RPJM mentioned which adaptation options can be devised. about climate adaptation have been initiated at 3.3. Provincial Medium-term Development Plan that the indicators will be the total forest that are the local level. SPARC activities, implemented in managed by communities and plans to response Despite the issuance of the RAN-API, it is still three pilot districts of East Sumba, Sabu Raijua Support from the SPARC project resulted in to disasters and climate change at the village unclear whether local governments should and Manggarai, focuses on strengthening and explicit references to climate change adaptation level. This indicates that support to increase the develop their own climate change adaptation developing climate-resilient institutions and in the 2013-2018 Medium Term Plan (RPJMP) capacity of local government in the planning and plans (Rencana Aksi Daerah Adaptasi Perubahan rural communities and improving adaptation in for the NTT province. In three of eight missions budgeting process is crucial. Iklim – RAD-API). As there is no law or regulation three sectors: agriculture, water resources and of the RPJMP, climate change related issues stipulating the development of climate change livelihoods. The project has developed a list of adaptation plans, local governments are not adaptation strategies based on the results of the Table 10 Climate related actions included in the Provincial Medium Term Development Plan required to develop local adaptation plans. survey and analyses for each pilot district (Table 9). Direction/ Strategy General Policy Priority Indicator/ target Responsible Agencies

Mission 3: Community-based economic empowerment and development based on local comparative advantage. Table 9 SPARC adaptation strategies 3.1. Increase farmers’ Increase areas for food crops Increase of areas and Program to increase the Total rice production income and horticulture that are community welfare through production and productivity Total machines used in Selected SPARC adaptation strategies resilient to climate change job creation and increased of food crops and horticulture crop production and post Responsible agency: through the increased use productivity Seedling program harvesting Agriculture and Plantation of the climate information • The use of high yielding varieties system • Increased utilization of climate information and the use of pesticides • Socialization of the planting calendar 3.3. Increase food security Increase food stocks in Increase food stock, Increase food security, Food stock (ton) • Development of agroforestry systems and garden plants through ensuring sufficient 22 districts considering information about food agriculture and plantations % food vulnerability • Development of coastal communities and institutions such as seaweed cultivation and businesses food stock, addressing climate change and river and stock, and price, as well incidence managed • Conservation of upland areas through measures such as agroforestry food insecurity, providing ecosystems as monitoring of climate % monitoring and • Increased harvest index information about food adaptation and increase development • Greening the coastal regions stocks, price, and access, productivity of river % food insecurity incidence • Development of savannah areas as well as food security ecosystems managed at river ecosystem • Development of an inventory system of local rice and pulse seeds (seed center) monitoring and control • Water saving and harvesting technologies • Reforestation for water conservation / expansion of rainwater Responsible agency: BKP2, • Improved transportation facilities to support agriculture Forestry, Public Work, BLDH, • Efforts for adding value to agricultural products and household industries Agriculture, Livestock • Early warning systems and climate stations Mission 5: Accelerate the development of infrastructure based on spatial allocation and environmental considerations • Developing institutions for farmers such as information and finance 5.13. Climate mitigation and Develop climate change Increase the capacity and Program to establish Total forest that can be • Improved drainage and irrigation adaptation mitigation and adaptation involvement of multi- an information and managed by communities • Development of a network or installation of climate stations systems stakeholders in mitigation communication system to as part of climate mitigation • Conservation of water catchment areas Responsible agency: Public and adaptation improve the resilience of and adaptation Work, Fisheries, Agriculture, Build capacity and develop communities to climate Plantation, Livestock, Mining a system to reduce the change Plan for responses to and Energy, Environment, vulnerability to disasters and disasters and climate Forestry climate change change starting at the village level

27 28 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis

Direction/ Strategy General Policy Priority Indicator/ target Responsible Agencies 5.14. Improve data, Develop a control system Increase the understanding Program to establish Understanding that climate information and information to make use of renewable of vulnerability and an information and change that leads to positive systems for the environment energy involvement of the communication system to impacts in society and the availability of community in developing improve the resilience of environmentally sound adaptation plans in rural communities to climate products, methodologies and and urban areas change technologies

Responsible Agency: Public work, fisheries, marine, agriculture, plantation, livestock mining energy and environment Mission 8: Accelerate poverty reduction disaster management in bordering regions 8.3. Increase resilience to Increase mitigation and Increase mitigation and Program to develop disaster Total villages that are disasters adaptation to disasters adaptation to disasters prevention and relief resilient to disasters activities Total facilities that are Responsible agency: Local resilient to disasters disaster management agency

3.4. Action Plans on Climate Change vs. Development implementation will however be sector-specific Plans and usually no coordination between sectors.

Climate change action plan, such as RAN-GRK Local governments can issue climate action plan for climate mitigation, is issued with the main documents only when the national government intention of setting the targets that will be achieved issues a specific decree, for instance in the nationally and how the country is going to achieve case of the RAN-GRK. The document can detail the targets. The action plan document should also about the responsible institution, the monitoring detail the responsible institution, the monitoring and reporting mechanism and also the source and reporting mechanism and also the source of of financial resources to implement the actions. financial resources to implement the actions. To This will give the provincial government the basis implement the Action Plan, a regulation or decree to include the climate mitigation actions into the is usually issued accompanied the document. planning documents such as RPJM. Although without climate action plan documents, local The regulation will provide power to the citizens to governments can include climate actions directly hold the government accountable for implementing into the development planning documents such the plan. The regulation will also provide a direction as RPJM. for local governments to implement the policies at the provincial and district levels. Without being The inclusion of these activities in planning formalized by a regulation, the local government documents, in theory, means that the government cannot develop any target and coordination can allocate part of its budget to implement those mechanism or develop an institution dealing with activities. Legally, if activities are not included climate change issue. in the planning documents, local governments cannot implement or allocate part of the budget Although local governments can develop can for the activities. Any budget allocated or spent on plan and implement climate actions if they are any activity that is not included in the planning being included in the planning documents. The document will be considered as fraud. Local

29 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis Policy Analysis

Direction/ Strategy General Policy Priority Indicator/ target governments are regularly audited and any commitment from the local government and also Responsible Agencies unplanned spending puts the government at risk the capacity to develop adaptation activities . 5.14. Improve data, Develop a control system Increase the understanding Program to establish Understanding that climate information and information to make use of renewable of vulnerability and an information and change that leads to positive for being investigated for corruption. systems for the environment energy involvement of the communication system to impacts in society The benefit of the climate action plan document, and the availability of community in developing improve the resilience of With the absence of the regulation related to RAN- such as RAD-GRK, is mainly the support provided environmentally sound adaptation plans in rural communities to climate products, methodologies and and urban areas change API, local governments do not attempt to develop by the national government to initiate the process technologies RAD-API. This is mainly because the fear of in all provinces in the country. The process of making any mistake that could be later classified developing the action plan usually includes Responsible Agency: Public work, fisheries, marine, as fraud. Without the development of RAD-API, capacity building and knowledge sharing. This agriculture, plantation, local governments can include climate adaptation can later allow the local government to include livestock mining energy and actions in the planning document, such as RPJM, activities as climate actions in the planning environment since the national planning document (RPJMN document. The action plan also details the roles Mission 8: Accelerate poverty reduction disaster management in bordering regions 2015-2019) has already included climate and responsibilities of other stakeholders in 8.3. Increase resilience to Increase mitigation and Increase mitigation and Program to develop disaster Total villages that are disasters adaptation to disasters adaptation to disasters prevention and relief resilient to disasters adaptation actions. The adaptation actions and achieving the targets and implementing climate activities Total facilities that are targets in RPJMN 2015-2019 mainly refer to the actions. It also assigns specific mandates for Responsible agency: Local resilient to disasters disaster management RAN-API document . establishing a coordination mechanism as well agency as the monitoring and evaluation in achieving the In the case of NTT, the province included adaptation targets. actions in the provincial RPJM, even without the development of RAD-API. The allocation of budget 3.5. Discussion and Summary 3.4. Action Plans on Climate Change vs. Development implementation will however be sector-specific for the adaptation activities included in the RPJM Plans and usually no coordination between sectors. is therefore possible. The case of NTT is however - National policies shape and direct the exceptional, mainly due to the support provided development of subnational policies. In the Climate change action plan, such as RAN-GRK Local governments can issue climate action plan by the SPARC project. The national government case of mitigation, the national government for climate mitigation, is issued with the main documents only when the national government cannot expect the same progress can happen has provided a clear direction on the targets intention of setting the targets that will be achieved issues a specific decree, for instance in the in other provinces without support and direction and action plans to reduce GHG emissions nationally and how the country is going to achieve case of the RAN-GRK. The document can detail from the national government. This is mainly through the issuance of Presidential the targets. The action plan document should also about the responsible institution, the monitoring because climate adaptation actions should be Regulation 61/2011 on RAN-GRK. In the case detail the responsible institution, the monitoring and reporting mechanism and also the source implemented by many sectors that are classified of climate adaptation, no specific regulation and reporting mechanism and also the source of of financial resources to implement the actions. as optional affairs for local governments, such as is issued to provide a direction for local financial resources to implement the actions. To This will give the provincial government the basis agriculture, energy, marine and fisheries, despite governments. Without a clear direction for implement the Action Plan, a regulation or decree to include the climate mitigation actions into the environment management is currently classified local governments, they have difficulties in is usually issued accompanied the document. planning documents such as RPJM. Although as a compulsory affair (See Table 1). This means developing detailed action plans or targets to without climate action plan documents, local climate activities currently implemented under the adapt to climate change. The regulation will provide power to the citizens to governments can include climate actions directly Local Environmental Agency (Badan Lingkungan - The Provincial Government of NTT has hold the government accountable for implementing into the development planning documents such Hidup Daerah or BLHD) can be classified as developed provincial action plans to reduce the plan. The regulation will also provide a direction as RPJM. compulsory affairs – where priority can be GHG emissions. NTT is currently receiving for local governments to implement the policies at given. However, climate actions that should be benefits from the SPARC project that provide the provincial and district levels. Without being The inclusion of these activities in planning implemented by agriculture, energy and marine/ support for the provincial government to formalized by a regulation, the local government documents, in theory, means that the government fisheries sectors are classified as optional. While for develop climate adaptation actions. cannot develop any target and coordination can allocate part of its budget to implement those compulsory affairs, the Ministry of Home Affair will - The Provincial Government has already mechanism or develop an institution dealing with activities. Legally, if activities are not included measure the performance based on the Minimum included some of adaptation and mitigation climate change issue. in the planning documents, local governments Service Standard (Standar Pelayanan Minimum), measures into the planning documents. The cannot implement or allocate part of the budget there will be no standard of performance for the inclusion of these activities in the documents Although local governments can develop can for the activities. Any budget allocated or spent on optional affairs. Therefore, the development of means that the government will allocate its plan and implement climate actions if they are any activity that is not included in the planning adaptation actions in those sectors (i.e. agriculture, budget to implement those activities. Legally, being included in the planning documents. The document will be considered as fraud. Local energy, marine and fisheries) will depend on the if activities are not included in the planning

29 30 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis

documents, local governments cannot implement or allocate part of the budget for the activities. Any budget allocated or spent on any activity that is not included in the planning document will be considered as fraud. - The activities that have been included in the government planning and budget documents are however the ongoing or existing activities. It is important to also initiate new activities or make adjustment to the existing or ongoing activities. However, there is lack of capacity in developing planning and budgeting for climate actions implemented by the government.

31 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Policy Analysis

31 32 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

DRAFT 2.2

Institutional Analysis

INSTITUTIONAL ANALYSIS

3.4.Institutional Climate change institution Analysiss

3.1.4.1. National climate change institutions 4. Climate change institutions Council members include 17 cabinet ministers The Indonesian government has dispersed authority for climatand thee change Head ofmitigation Meteorology, and Climatologyadaptation andacross a range4.1. of institutions.National climate These change include institutions existing ministries andGeophysics. government The bodies, DNPI ashas well an Executiveas establishing Chair, new bodies that address issues related to climate change. SomeOperating of the new Secretariat institutions and that 7 Working have been Groups establ onished includeThe the Indonesian National Councilgovernment on Climate has Changedispersed (Dewan NasionalMitigation, Perubahan Adaptation, Iklim orFinancial DNPI) andMechanism, the Reducing Emissionsauthority from for Deforestation climate change and Forest mitigation Degradation and (REDD+)Technology Agency. Transfer, The functions LULUCF of(for DNPI forestry and & REDD+ land- are to coordinateadaptation among across existing a range ministries of institutions. and government These departmentsbased emissions), on issues International related to climate Negotiations, change. include existing ministries and government Climate Science and GHG Inventory. The Nationalbodies, as Council well as on establishing Climate Change new bodies was one that of the first institutions established at the national level to addressaddress climate issues change. related The to Nat climateional change.Council onSome Climate Change(The DNPIDNPI Working) was established Groups have by members Presidential drawn Decree of the new institutions that have been established from related sectoral agencies, civil society No. 48/2008. It is the primary body for policy coordination on climate change. The DNPI is chaired by the include the National Council on Climate Change organizations, academics and the private sector. President with the Coordinating Minister for Economic Affairs and Minister for People’s Welfare serving as vice- (Dewan Nasional Perubahan Iklim or DNPI) The Working Groups are think-tanks who prepare chairs.and Council the Reducing members Emissions include from 17 Deforestationcabinet ministers andpolicy the inputs, Head supportof Meteorology, program planning, Climatology hold and Geophysics.and Forest The DegradationDNPI has an (REDD+) Executive Agency. Chair, TheOperating discussionsSecretariat withand international7 Working Groupspartners onand Mitigation, draft Adaptation,functions Financial of DNPI andMechanism, REDD+ are Technology to coordinate Transfer, regulationsLULUCF to(for be adoptedforestry by& the land DNPI.-based The budgetemissions), Internationalamong existingNegotiations, ministries Climate and Science government and GHG Inventory.for DNPI The is financed DNPI Working by the budgetGroups of thehave Ministrymembers drawndepartments from related on issues sectoral related agencies, to climate civil change. society organizations,of Environment. academics and the private sector. The Working Groups are think-tanks who prepare policy inputs, support program planning, hold discussions with internationalThe National partners Council and on draft Climate regulations Change wasto be one adopted byEstablished the DNPI. byThe Presidentialbudget for DNPIDecree is financed 62/2013, by the budgetof theof thefirst Ministry institutions of Environment. established at the national the REDD+ agency is tasked with developing a level to address climate change. The National national strategy for reducing greenhouse gas EstabCouncillished byon PresidentialClimate Change(DNPI) Decree 62/2013, was established the REDD+ agencyemissions is tasked from with deforestation developing aand national degradation strategy for reducingby Presidential greenhouse Decree gas emissions No. 48/2008. from deforestation It is the and(Table degradation 11). The (Table Decree 11 ).states The Decree that the states Head that of the Headprimary of REDD+ body agency for policy has thecoordination mandate toon maclimatenage finance,REDD+ administration agency hasand otherthe mandate facilities toequal manage to that of a minister.change. According The DNPI to is chairedthe regulation, by the President the REDD+ with agency finance,can also developadministration financing and instrumentsother facilities for equal REDD+. The regulation,the Coordinating however, Minister does for notEconomic stipulate Affairs the and source of tothe that budget of a minister. for the agenAccordingcy, although to the regulation, there is some mentionMinister of national for People’s (APBN) Welfare and serving local (APBD) as vice-chairs. revenue that canthe beREDD+ used toagency finance can its also activities develop. financing

TableTables 11 11Reducing Reducing Emissions Emissions from from Deforestation Deforestation and and Forest Forest Degradation Degradation (REDD+) Agency RolesRoles REDD+ Agency Roles - Develop a REDD+ strategy - Social environmental and financial safeguards - Coordinate the development of REDD+ policies and their implementation - Prepare and coordinate the REDD+ financial mechanism as well as manage REDD+ funds - Develop standards and methodologies for emission measurement from project and program activities to consolidate and report as part of GHG emissions - Increase the capacity of ministries and agencies - Provide recommendations at the international level - Coordinate law enforcement for REDD+ - Facilitate conflict resolution - Monitoring and evaluation of REDD+

These climate change bodies, however, only have coordinating functions. They do not have the authority 33 to implement actions, and must work through the relevant line ministries. This compromises their roles and responsibilities as they are not able to be the implementing agency. They also do not have specific budget allocated for them.

43 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

DRAFT 2.2

Institutional Analysis Institutional Analysis

INSTITUTIONAL ANALYSIS instruments for REDD+. The regulation, however, Nationally, RAN-API is under the coordination 3.4.Institutional Climate change institution Analysiss does not stipulate the source of the budget for of the Adaptation Working Group, currently the agency, although there is some mention of within BAPPENAS (Table 12). The Group was 3.1.4.1. National climate change institutions national (APBN) and local (APBD) revenue that established by Decree of the Minister of Planning/ 4. Climate change institutions Council members include 17 cabinet ministers can be used to finance its activities. Head of the Planning Agency No. 38/M.PPN/ The Indonesian government has dispersed authority for climatand thee change Head ofmitigation Meteorology, and Climatologyadaptation andacross a HK/03/2012 regarding the establishment of the range4.1. of institutions.National climate These change include institutions existing ministries andGeophysics. government The bodies, DNPI ashas well an Executiveas establishing Chair, new These climate change bodies, however, only Coordination Team for Handling Climate Change. bodies that address issues related to climate change. SomeOperating of the new Secretariat institutions and that 7 Working have been Groups establ onished have coordinating functions. They do not have The Working Group is responsible for planning and includeThe the Indonesian National Councilgovernment on Climate has Changedispersed (Dewan NasionalMitigation, Perubahan Adaptation, Iklim orFinancial DNPI) andMechanism, the Reducing the authority to implement actions, and must implementing programs and activities on climate Emissionsauthority from for Deforestation climate change and Forest mitigation Degradation and (REDD+)Technology Agency. Transfer, The functions LULUCF of(for DNPI forestry and & REDD+ land- are work through the relevant line ministries. This adaptation. For the implementation of climate to coordinateadaptation among across existing a range ministries of institutions. and government These departmentsbased emissions), on issues International related to climate Negotiations, change. compromises their roles and responsibilities as they adaptation at the subnational level, adaptation include existing ministries and government Climate Science and GHG Inventory. are not able to be the implementing agency. They strategies need to be formulated at the provincial The Nationalbodies, as Council well as on establishing Climate Change new bodies was one that of the first institutions established at the national level to also do not have specific budget allocated for them. level. However, without a clear direction from the addressaddress climate issues change. related The to Nat climateional change.Council onSome Climate Change(The DNPIDNPI Working) was established Groups have by members Presidential drawn Decree national government, particularly the Ministry of of the new institutions that have been established from related sectoral agencies, civil society At the national level, several ministries and Home Affairs, local governments cannot develop No. 48/2008. It is the primary body for policy coordination on climate change. The DNPI is chaired by the include the National Council on Climate Change organizations, academics and the private sector. government bodies have mandates related to RAD-API. The RAN-API mentions that the President with the Coordinating Minister for Economic Affairs and Minister for People’s Welfare serving as vice- (Dewan Nasional Perubahan Iklim or DNPI) The Working Groups are think-tanks who prepare climate change that include the Planning Agency, development of adaptation strategies is mandated chairs.and Council the Reducing members Emissions include from 17 Deforestationcabinet ministers andpolicy the inputs, Head supportof Meteorology, program planning, Climatology hold and the Ministry of Finance and the Ministry of by the Law no. 32 of 2004 and Law no. 38 of Geophysics.and Forest The DegradationDNPI has an (REDD+) Executive Agency. Chair, TheOperating discussionsSecretariat withand international7 Working Groupspartners onand Mitigation, draft Environment. The Planning Agency (Bappenas) 2007 on Environmental Management, a technical Adaptation,functions Financial of DNPI andMechanism, REDD+ are Technology to coordinate Transfer, regulationsLULUCF to(for be adoptedforestry by& the land DNPI.-based The budgetemissions), has the mandate to monitor and evaluate the regulation is required to ensure that provincial Internationalamong existingNegotiations, ministries Climate and Science government and GHG Inventory.for DNPI The is financed DNPI Working by the budgetGroups of thehave Ministrymembers achievement of the RAN-GRK and the Secretariat governments develop a written adaptation strategy. drawndepartments from related on issues sectoral related agencies, to climate civil change. society organizations,of Environment. academics and the private sector. The of RAN-GRK is hosted by the Planning Agency. However, without a regulation of the Ministry of Working Groups are think-tanks who prepare policy inputs, support program planning, hold discussions with The Planning Agency also has the role as the Home Affair, it is practically impossible to develop internationalThe National partners Council and on draft Climate regulations Change wasto be one adopted byEstablished the DNPI. byThe Presidentialbudget for DNPIDecree is financed 62/2013, by the secretariat for the implementation of RAN-API. RAD-API. budgetof theof thefirst Ministry institutions of Environment. established at the national the REDD+ agency is tasked with developing a In addition to these functions, the Planning level to address climate change. The National national strategy for reducing greenhouse gas Agency hosts the Indonesia Climate Change Trust The new government merged both the Ministry EstabCouncillished byon PresidentialClimate Change(DNPI) Decree 62/2013, was established the REDD+ agencyemissions is tasked from with deforestation developing aand national degradation strategy for Fund (ICCTF), which is a financial instrument of Environment and the Ministry of Forestry into reducingby Presidential greenhouse Decree gas emissions No. 48/2008. from deforestation It is the and(Table degradation 11). The (Table Decree 11 ).states The Decree that the states Head that of the that is government led, but does not feature in one ministry – known as Ministry of Environment Headprimary of REDD+ body agency for policy has thecoordination mandate toon maclimatenage finance,REDD+ administration agency hasand otherthe mandate facilities toequal manage to that of the government budget. In 2011, the Ministry and Forestry . In January 2015, the structure a minister.change. According The DNPI to is chairedthe regulation, by the President the REDD+ with agency finance,can also developadministration financing and instrumentsother facilities for equal REDD+. of Finance established the Centre for Climate of the new Ministry was announced where both The regulation,the Coordinating however, Minister does for notEconomic stipulate Affairs the and source of tothe that budget of a minister. for the agenAccordingcy, although to the regulation, there is some Change Financing and Multilateral Policy at the DNPI and the REDD+ Agency have now merged mentionMinister of national for People’s (APBN) Welfare and serving local (APBD) as vice-chairs. revenue that canthe beREDD+ used toagency finance can its also activities develop. financing Fiscal Policy Agency. into the Ministry of Environment and Forestry under the Directorate General of Climate Change. TableTables 11 11Reducing Reducing Emissions Emissions from from Deforestation Deforestation and and Forest Forest Degradation Degradation (REDD+) Agency RolesRoles The centre performs such functions as formulating However, it is still unclear on the directorates that REDD+ Agency Roles policy recommendations and monitoring climate are currently put under the DG Climate Change - Develop a REDD+ strategy change financing related issues. This centre also until the writing of this report. - Social environmental and financial safeguards deals with economic and financial co-operation - Coordinate the development of REDD+ policies and their implementation within the G20 and other multilateral forums. 4.2. Local institutions - Prepare and coordinate the REDD+ financial mechanism as well as manage REDD+ funds Within the Ministry of Environment, the Deputy - Develop standards and methodologies for emission measurement from project and program for the Control of Environmental Damage and Addressing climate change at the subnational activities to consolidate and report as part of GHG emissions Climate Change is responsible for both mitigation level is contingent on national level policies. Local - Increase the capacity of ministries and agencies and adaptation to climate change. Other line governments cannot establish a local institution - Provide recommendations at the international level ministries such as forestry, agriculture and mining without a corresponding law at the national level. - Coordinate law enforcement for REDD+ have roles managing finances for climate change. For instance, the Law on Disaster Management - Facilitate conflict resolution These ministries usually have a working group that provides a legal basis for the establishment of a - Monitoring and evaluation of REDD+ specifically deals with issues related to climate national body and local body to deal with disaster change. risk management. This is different, however, to

These climate change bodies, however, only have coordinating functions. They do not have the authority 33 to 34 implement actions, and must work through the relevant line ministries. This compromises their roles and responsibilities as they are not able to be the implementing agency. They also do not have specific budget allocated for them.

43 DRAFT 2.2

At the national level, several ministries and government bodies have mandates related to climate change that include the Planning Agency, the Ministry of Finance and the Ministry of Environment. The Planning Agency (Bappenas) has the mandate to monitor and evaluate the achievement of the RAN-GRK and the Secretariat of RAN-GRK is hosted by the Planning Agency. The Planning Agency also has the role as the secretariat for the implementation of RAN-API. In addition to these functions, the Planning Agency hosts the Indonesia Climate Change Trust Fund (ICCTF), which is a financial instrument that is government led, but does not feature in the Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia government budget. In 2011, the Ministry of Finance established the Centre for Climate Change Financing and Multilateral Policy at the Fiscal Policy Agency. The centre performs such functions as formulating policy recommendations and monitoring climate change financing related issues. This centre also deals with economic and financial co-operation within the G20 and other multilateral forums. Within the Ministry of Environment, the Deputy for the Control of Environmental Damage and Climate Change is responsible for both Institutional Analysis mitigation and adaptation to climate change.3 Other line ministries such as forestry, agriculture and mining have roles managing finances for climate change. These ministries usually have a working group that specifically deals with issues related to climate change.

TablesTable 12 12 Institutional Institutional setting forfor RANRAN-GRK-GRK and and RAN RAN-API-API

Climate Mitigation (RAN-GRK) Legal basis Presidential Regulation 61/2011 Target 767 m tCO2e Coordinating institution Coordinating Ministry of Economic Affairs Monitoring and Reporting Ministry of Planning (Bappenas) Implementation Ministry of Public Works, Agriculture, Forestry, Energy and Mineral, Transport, Industry Financing Domestic and international finance

Climate Adaptation (RAN-API)

Legal basis Not available Target Not available Coordinating institution Adaptation Working Group established by Decree of the Minister of Planning No. Monitoring and Reporting 38/M.PPN/HK/03/2012 on the establishment of the Coordination Team for Handling Climate Change. At the subnational level, the Ministry of Home Affairs is the coordinator. Implementation All relevant ministries Financing Domestic and international finance

governmentNationally, RANpolicies-API isand under institutions the coordination on climate of the Adaptationother afterWorking the Groupdocument, currently is completed within BAP unlessPENAS a change(Table 12)issues.. The GroupIn the wasabsence established of a national by Decree law of the Ministerformal of mechanism Planning/Head is ofspecifically the Planning established. Agency No. As 38/M.PPN/HK/03/2012 regarding the establishment of the Coordination Team for Handling Climate Change. The regulatingWorking Groupclimate is responsiblechange, localfor planning governments and implementing government programs officialsand activities frequently on climate rotate adaptation. from one cannotFor the establish implementation a specific of climate institution adaptation dealing at the subnationalunit to another, level, adaptation other officials strategies in the need institution to be withformulated climate atchange the provincial at the level.local However,level. For without aoften clear have direction no knowledge from the aboutnational the government,process after instance,particularly DNPI the andMinistry the ofREDD+ Home agencyAffairs, localhave governmentsno those cannot who develop participated RAD-API in .the The process RAN-API are mentions rotated. departmentsthat the development at the local of adapta level.Withouttion strategies specific is mandated In by provincethe Law no. of 32NTT, of 2004 the and Governor Law no. 38Regulation of 2007 on Environmental Management, a technical regulation is required to ensure that provincial governments localdevelop institutions a written for adaptation addressing strategy. climate However, change, without clearlya regulation assigns of the the responsibility Ministry of Homeof each Affair, institution it is localpractically governments impossible must to develop work RADthrough-API. existing for reducing emissions. Governor Regulation government departments and other bodies. For 40/2012 (Table 13) details the responsibility of The new government merged both the Ministry of Environment and the Ministry of Forestry into one ministry – instance, the Planning Agency at the local level each institution in regards to climate change known as Ministry of Environment and Forestry. In January 2015, the structure of the new Ministry was Comment [RP28]: footnote not needed. isannounced responsible where for boththe implementation DNPI and the REDD+ of action Agency have mitigation.now merged The into Planning the Ministry Agency of Environment is responsible and plan to reduce GHG emissions at the provincial for monitoring and evaluation, while the Provincial level. This is because there is a similar setting at Secretary is responsible to mainstream climate 3 During the writing of this report, the Ministry of Environment has now been merged with the Ministry of Forestry. The structure of the thenew national Ministry has level, not been where announced the Ministry to the public. of Planning change into government policies. is responsible for the implementation of the Presidential Decree 61/2011 on National Action Government agencies responsible for Plans to reduce GHG emissions. Provinces with implementing actions for climate change44 special autonomy status, however, are able to mitigation are: Agriculture, Marine and Fisheries, establish their own local institutions. Livestock, Forestry, Environment, Public Works, Transportation, Mining and Industry. Specific tasks Climate change is currently being addressed assigned to them are listed in Table 14. Finances in each government office without a formal for the activities come from the deconcentration coordination mechanism. Coordination usually fund, provincial budget and international finance, only occurs during the development of a although the national government still has not document, for example, the development of the allocated specific funds for climate change RAN-GRK. Institutions rarely coordinate with each mitigation.

35 DRAFT 2.2

Forestry under the Directorate General of Climate Change. However, it is still unclear on the directorates that are currently put under the DG Climate Change until the writing of this report.

3.2.4.2. Local institutions Addressing climate change at the subnational level is contingent on national level policies. Local governments cannot establish a local institution without a corresponding law at the national level. For instance, the Law on Disaster Management provides a legal basis for the establishment of a national body and local body to deal with disaster risk management. This is different, however, to government policies and institutions on climate change issues. In the absence of a national law regulating climate change, local governments cannot establish a specific institution dealing with climate change at the local level. For instance, DNPI and the REDD+ agency have no departments at the local level.Without specific local institutions for addressing climate change, local governments must work through existing government departments and other bodies. For instance, the Planning Agency at the local level is responsible for the implementation of action plan to reduce GHG emissions at the provincial level. This is because there is a similar setting at the national level, where the Ministry of Planning is responsible for the implementation of the Presidential Decree 61/2011 on National Action Plans to reduce GHG emissions. Provinces with special autonomy status, however, are able to establish their own local institutions.

Climate change is currently being addressed in each government office without a formal coordination DRAFT 2.2 mechanism. Coordination usually only occurs during the development of a document, for example, the development of the RAN-GRK. Institutions rarely coordinate with each other after the document is completed At the national level, several ministries and government bodies have mandates related to climate change that unless a formal mechanism is specifically established. As government officials frequently rotate from one unit include the Planning Agency, the Ministry of Finance and the Ministry of Environment. The Planning Agency to another, other officials in the institution often have no knowledge about the process after those who (Bappenas) has the mandate to monitor and evaluate the achievement of the RAN-GRK and the Secretariat of participated in the process are rotated. RAN-GRK is hosted by the Planning Agency. The Planning Agency also has the role as the secretariat for the implementation of RAN-API. In addition to these functions, the Planning Agency hosts the Indonesia Climate In province of NTT, the Governor Regulation clearly assigns the responsibility of each institution for reducing Change Trust Fund (ICCTF), which is a financial instrument that is government led, but does not feature in the Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia emissions. GoveProvincialrnor Regulation Climate Public 40/2012 Expenditure (Table and 13) Institutional details the Review, responsibility East Nusa of Tenggara each institution of Indonesia in regards to government budget. In 2011, the Ministry of Finance established the Centre for Climate Change Financing and climate change mitigation. The Planning Agency is responsible for monitoring and evaluation, while the Multilateral Policy at the Fiscal Policy Agency. The centre performs such functions as formulating policy Provincial Secretary is responsible to mainstream climate change into government policies. Government recommendations and monitoring climate change financing related issues. This centre also deals with agencies responsible for implementing actions for climate change mitigation are: Agriculture, Marine and economic and financial co-operation within the G20 and other multilateral forums. Within the Ministry of Environment, the Deputy for the Control of Environmental Damage and Climate Change is responsible for both Fisheries, Livestock, Forestry, Environment, Public Works, Transportation, Mining and Industry. Specific tasks Institutional Analysis Institutional Analysis mitigation and adaptation to climate change.3 Other line ministries such as forestry, agriculture and mining assigned to them are listed in Table 14. Finances for the activities come from the deconcentration fund, have roles managing finances for climate change. These ministries usually have a working group that provincial budget and international finance, although the national government still has not allocated specific specifically deals with issues related to climate change. funds for climate change mitigation. Tables 12 Institutional setting for RAN-GRK and RAN-API Table 13 Institutional Setting for RAD-GRK Table 12 Institutional setting for RAN-GRK and RAN-API Table 13 Institutional Setting for RAD-GRK Provincial Climate Mitigation (RAN-GRK) Legal basis Governor Regulation 40/2012 Legal basis Presidential Regulation 61/2011 Target 9.7 million tCO2e Target 767 m tCO2e Coordinating institution Coordinating Ministry of Economic Affairs Coordinating institution Not specifically mentioned Monitoring and Reporting Ministry of Planning (Bappenas) Monitoring Bappeda Implementation Ministry of Public Works, Agriculture, Forestry, Energy and Mineral, Transport, Industry Financing Domestic and international finance Implementation Agriculture, Marine and Fisheries, Livestock, Forestry, Environment, Public Works, Transportation, Mining, Industry, Climate Adaptation (RAN-API) Financing Deconcentration, APBD and international Legal basis Not available District/Municipality Target Not available Not Available Coordinating institution Adaptation Working Group established by Decree of the Minister of Planning No. Monitoring and Reporting 38/M.PPN/HK/03/2012 on the establishment of the Coordination Team for Handling Climate Change. For climate change adaptation, there is an ad-hoc team dealing with adaptation action under the SPARC At the subnational level, the Ministry of Home Affairs is the coordinator. For climate change adaptation, there is an ad-hoc Timur and Sabu Raijua. The team meets regularly, project, which includes representatives from three districts namely Manggarai, Sumba Timur and Sabu Raijua. Implementation All relevant ministries team dealing with adaptation action under the which enables coordination and information Financing Domestic and international finance The team meets regularly, which enables coordination and information sharing. As the SPARC project is still SPARCongoing, project, the team which is currently includes active. representatives sharing. As the SPARC project is still ongoing, the from three districts namely Manggarai, Sumba team is currently active. governmentNationally, RANpolicies-API isand under institutions the coordination on climate of the Adaptationother afterWorking the Groupdocument, currently is completed within BAP unlessPENAS a change(Table 12)issues.. The GroupIn the wasabsence established of a national by Decree law of the Ministerformal of mechanism Planning/Head is ofspecifically the Planning established. Agency No. As Table 14 Roles of each government unit in climate mitigation and adaptation 38/M.PPN/HK/03/2012 regarding the establishment of the Coordination Team for Handling Climate Change. The regulating climate change, local governments government officials frequently rotate from one 45 Working Group is responsible for planning and implementing programs and activities on climate adaptation. Office/Agency Mitigation Adaptation cannotFor the establish implementation a specific of climate institution adaptation dealing at the subnationalunit to another, level, adaptation other officials strategies in the need institution to be withformulated climate atchange the provincial at the level.local However,level. For without aoften clear have direction no knowledge from the aboutnational the government,process after Governor/Regent/Mayor - Propose and discuss the budget to the Parliament particularly the Ministry of Home Affairs, local governments cannot develop RAD-API. The RAN-API mentions instance, DNPI and the REDD+ agency have no those who participated in the process are rotated. Note: provide overall direction and leadership particularly in new/emerging issues such as climate change departmentsthat the development at the local of adapta level.Withouttion strategies specific is mandated In by provincethe Law no. of 32NTT, of 2004 the and Governor Law no. 38Regulation of 2007 on Environmental Management, a technical regulation is required to ensure that provincial governments Provincial/District - Approve the budget. localdevelop institutions a written for adaptation addressing strategy. climate However, change, without clearlya regulation assigns of the the responsibility Ministry of Homeof each Affair, institution it is local governments must work through existing for reducing emissions. Governor Regulation Parliaments Note: local parliaments often have no sufficient knowledge and information regarding climate change, hence it is difficult to practically impossible to develop RAD-API. justify the increase of budget for climate change government departments and other bodies. For 40/2012 (Table 13) details the responsibility of The new government merged both the Ministry of Environment and the Ministry of Forestry into one ministry – Local Development Planning Leading the planning and budgeting process at the provincial/district/municipality level. instance, the Planning Agency at the local level each institution in regards to climate change Board Note: hold the important role in coordination of the planning and budgeting process –the most crucial process to ensure that known as Ministry of Environment and Forestry. In January 2015, the structure of the new Ministry was Comment [RP28]: footnote not needed. climate actions will be implemented and financed by government budget. isannounced responsible where for boththe implementation DNPI and the REDD+ of action Agency have mitigation.now merged The into Planning the Ministry Agency of Environment is responsible and plan to reduce GHG emissions at the provincial for monitoring and evaluation, while the Provincial Monitor and evaluate the implementation of RAD-GRK In NTT province, the Planning Agency is the leading agency for ANGGUR MERAH – a community empowerment program level. This is because there is a similar setting at Secretary is responsible to mainstream climate 3 During the writing of this report, the Ministry of Environment has now been merged with the Ministry of Forestry. The structure of the to support people livelihoods thenew national Ministry has level, not been where announced the Ministry to the public. of Planning change into government policies. Food Security and Extension Change the mode of agriculture i.e. fertilizer use Ensure the availability of food crops, carry out periodic is responsible for the implementation of the Service Agency monitoring and analysis of food security Presidential Decree 61/2011 on National Action Government agencies responsible for Local Environmental - Environmental quality control including pollution control Plans to reduce GHG emissions. Provinces with implementing actions for climate change44 Agency - Conduct environmental impact assessment special autonomy status, however, are able to mitigation are: Agriculture, Marine and Fisheries, Local Disaster Management Developing local plan for disaster management – Note: The Agency main focus has been on responding to disasters instead of establish their own local institutions. Livestock, Forestry, Environment, Public Works, increasing resilient to shocks due to disasters Transportation, Mining and Industry. Specific tasks Forest Service Agency - Finalizing forest boundaries - Creating options for local livelihoods living inside or Climate change is currently being addressed assigned to them are listed in Table 14. Finances - Forest rehabilitation and conservation, surrounding forests in each government office without a formal for the activities come from the deconcentration - Reforestation of areas belong to local communities - Protecting forests that are important for environmental services i.e. water supply for food production coordination mechanism. Coordination usually fund, provincial budget and international finance, only occurs during the development of a although the national government still has not Marine and Fisheries Note: although listed in RAD-GRK, the role of the agency - Food production document, for example, the development of the allocated specific funds for climate change Agency is not clear - Livelihoods for local communities RAN-GRK. Institutions rarely coordinate with each mitigation. Health Agency - Provision of health service - Nutrition intervention

35 36 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Institutional Analysis

Office/Agency Mitigation Adaptation

Public Works Agency Infrastructure – road, bridges, irrigation, water access Education , Youth and Education , Youth and Sports Agency Education , Youth and Education as one of the indicators to estimate the adaptive Sports Agency Sports Agency Education , Youth and Sports Agency capacity index Transportation Agency Reducing emissions from transport – promoting environmentally friendly transportation system and technologies Mining and Energy Agency Moving towards energy alternatives for electricity and Access to energy as one of the indicators to estimate the industry as well as households. adaptive capacity index Agriculture and Plantation Change the mode of production – opening of lands - Increase the production of food crops and other cash Agency crops - Monitor the production of food crops and other crops

Livestock Agency - Promoting biogas and bio-compos - Ensure low emission forage production

Source: Mitigation actions are based on NTT RAD-GRK, while the adaptation actions are based on authors’ own analysis

The private sector and civil society need to be A focus group discussion (FGD) was carried involved in climate change mitigation as stated out in NTT to collect information related to the in RAD-GRK (Table 15). Although government existing institutional setting dealing with climate has a central role in climate change mitigation, change and how it can be improved. Twelve other actors should be involved too. Each of these provincial institutions were involved in the FGD, actors has their own resources that can be used to including from the departments of Planning, support climate change mitigation and adaptation. Forestry, Food Security and Extension Service, The Government can ensure that other sources of People Welfare Bureau, Disaster Management, financing, not just government revenue, are used Women and Children Empowerment, Meteorology to implement climate change actions. In NTT, the Bureau, Agriculture and Plantations, Community government has already been supported by non- Development and Food Crop Research Agencies . government organizations in addressing climate The results of the discussion can be summarized change. So far, the role of non-government into three major themes as follows: institutions, often assisted by international finance, has been: 1. Main constraints related to the provincial - Inventing models to work with local institution dealing with climate change issues; communities - Leadership from local governments is crucial - Advocating that the government provide more to ensure local government commitment attention to specific issues in addressing climate issues. Currently, - Monitoring and oversight climate change has not yet become a major Engagement with local communities. issue for district governments. As described in the previous section, communities participate in the planning and - The link between government budget budgeting process through Musrembangdes and climate activities should be properly – a consultation process at the village level to included in the planning documents. develop the village development plan.

37 DRAFT 2.2

by non-government organizations in addressing climate change. So far, the role of non-government Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia institutions, oftenProvincial assisted Climate by internationalPublic Expenditure finance, and Institutionalhas been: Review, East Nusa Tenggara of Indonesia

- Inventing models to work with local communities - Advocating that the government provide more attention to specific issues - Monitoring and oversight Institutional Analysis InstitutionalEngagement Analysis with local communities. As described in the previous section, communities participate in the planning and budgeting process through Musrembangdes – a consultation process at the village level to develop the village development plan.

Office/Agency Mitigation Adaptation TablesTable 15 15 Actors Actors in CivilCivil society society and and the the Private Private Sector Sector Civil society groups: Public Works Agency Infrastructure – road, bridges, irrigation, water access Education , Youth and Education , Youth and Sports Agency Education , Youth and Education as one of the indicators to estimate the adaptive - Pikul Foundation, a local NGO in Kupang. - YayasanPeduliSabuKab. SabuRaijua Sports Agency Sports Agency Education , Youth and Sports Agency capacity index - Action Contre La Faim (ACF Indonesia) - Yayasan Tunas Jaya Kab. Manggarai Transportation Agency Reducing emissions from transport – promoting - Care International Indonesia - VECO Indonesia environmentally friendly transportation system and - Yayasan Alfa Omega - Wetlands International technologies - CIS Timor - Karitas - PLAN Indonesia - BinaSwadaya Mining and Energy Agency Moving towards energy alternatives for electricity and Access to energy as one of the indicators to estimate the - The Nature Conservancy (TNC) - OISCA industry as well as households. adaptive capacity index - YayasanTananuaKab. Sumba Timur - WWF Indonesia Agriculture and Plantation Change the mode of production – opening of lands - Increase the production of food crops and other cash - Linking and Learning on Disaster Risk Reduction Agency crops Note: These NGOs are involved in assisting the government in (LnL DIPECHO) - Monitor the production of food crops and other crops the implementation of development program in NTT - Partnership for Resilience (PfR)

Livestock Agency - Promoting biogas and bio-compos - Ensure low emission forage production Universities:

- Universitas Kristen Artha Wacana - Pusat Studi Transportasi danLingkunganUniversitas - Universitas Muhammadiyah Kupang Nusa Cendana. Source: Mitigation actions are based on NTT RAD-GRK, while the adaptation actions are based on authors’ own analysis - Pusat Studi Lingkungan Hidup Universitas Nusa Cendana. - Pusat Studi Energi Universitas Nusa Cendana.

Note: these institutions companies are listed in the RAD-GRK of NTT The private sector and civil society need to be A focus group discussion (FGD) was carried involved in climate change mitigation as stated out in NTT to collect information related to the Private sector: in RAD-GRK (Table 15). Although government existing institutional setting dealing with climate has a central role in climate change mitigation, change and how it can be improved. Twelve - Pertamina (State Fuel Company) - PDAM (State Water Company) - Perusahaan Listrik Negara (State Electricity Company) other actors should be involved too. Each of these provincial institutions were involved in the FGD, actors has their own resources that can be used to including from the departments of Planning, support climate change mitigation and adaptation. Forestry, Food Security and Extension Service, Note: these three companies are listed in the RAD-GRK of NTT

The Government can ensure that other sources of People Welfare Bureau, Disaster Management, International Donors: financing, not just government revenue, are used Women and Children Empowerment, Meteorology to implement climate change actions. In NTT, the Bureau, Agriculture and Plantations, Community - United Nations Development Program (UNDP) - International Tropical Timber Organization (ITTO) - United Nations World Food Programme (WFP) - Government of Belgium government has already been supported by non- Development and Food Crop Research Agencies . - Government of Netherland, Ministry of Foreign Affairs government organizations in addressing climate The results of the discussion can be summarized change. So far, the role of non-government into three major themes as follows: institutions, often assisted by international finance, Source: NTT RAD-GRK has been: 1. Main constraints related to the provincial A -focus There group is no discussion specific climate(FGD) waschange carried agency/ out in NTT to- collectSocialization information is needed. related Socialisationto the existing and - Inventing models to work with local institution dealing with climate change issues; institutionalunit thatsetting allows dealing for withformal climate coordination change and how it can beadvocacy improved. on Twelve related provincial climate institutions action is communities - Leadership from local governments is crucial between institutions. No specific regulation necessary particularly at the district and - Advocating that the government provide more to ensure local government commitment that allows local government to establish a village level where real actions should take attention to specific issues in addressing climate issues. Currently, local institution. Consequently, a budget place. All actors involved in the planning47 - Monitoring and oversight climate change has not yet become a major cannot be specifically allocated to run a and budgeting process should be made Engagement with local communities. issue for district governments. formal institution. aware about climate issues – including the As described in the previous section, government personnel, local communities communities participate in the planning and - The link between government budget - Coordination between sectors and levels and district parliaments or village councils. budgeting process through Musrembangdes and climate activities should be properly of government (national, provincial – a consultation process at the village level to included in the planning documents. and district levels) is important to avoid 2. The effectiveness of current regulations related to develop the village development plan. fragmented climate policies. Due to weak climate change coordination, there are no integrated policy programs as a basis for climate Government regulations on climate change, change activities. including the Provincial Decree on Reducing GHG

37 38 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Institutional Analysis

emissions, should be followed up with a Technical are the Local Secretary, Planning Agency and Guidance Document (Juklak) on climate change Environment Agency. The Local Secretary has for each of the government offices. This will the role of administrating and operating public enable local government units to understand administration functions of all local agencies. how to implement the regulations. Some national The Planning Agency coordinates planning regulations also cannot be implemented at the and budgeting, as well as sectors, programs local level due to some constraining factors and between local and central governments. such as culture, economy and politics. Each Establishing a Climate Change Council at the local government also has specific situation and District level is also important which should be challenges. Hence, some adjustments to national formalized through a Governor or District Decree. regulations are required to suit local situations. With the new DG Climate Change under the For instance, NTT urgently needs to have wider Ministry of Environment and Forestry, subnational and better dams, however, building dams with level can also refer to the structure at the national coverage of 3000 ha or above is not under the level. However, there is no clarification on the new authority of the provincial or district government. structure. The national government is also reluctant to build such dams since they have to deal with land 4.3. Discussion and Summary claims of local communities. Hence, they prefer to build roads than building irrigation. Climate actions involve a great numbers of government institutions from many different Many activities should be carried out at the district sectors. This poses a real challenge in terms level and eventually the village level, however of coordination since government budget and there has been limited dialogues or engagement activities are classified into sectors. Water with those levels. There should be a discussion scarcity is one issue that requires a cross-sectoral for solving the issues through a working group approach. For instance, the agricultural sector, at the provincial and district level. There should which is under the responsibility of the Ministry be a regulation on climate change that can detail of Agriculture, requires water for crop production. activities at the village level and ensuring that the Water supply and irrigation is managed by the local action plan is implemented. Communities Ministry of Public Works. Aside from seasonal and should be consulted about policies related to climatic factors, water scarcity often occurs due climate change. to forest clearance in upstream areas, which is under the authority of the Ministry of Environment 3. The coordination mechanism and Forestry. Besides across sectors, coordination should also be carried out between the national, Coordination across sectors is still not effective provincial and district governments within in addressing climate change. As described specific sectors. For example, the authority to above, the existing coordination mechanism develop infrastructure is also devolved to different for climate adaptation mainly exists because of government levels – national, provincial and the SPARC project, while for climate mitigation district levels - depending on the scale of dams the coordination mechanism is no longer active or roads to be built. Although the planning and after the completion of the RAD-GRK document. budgeting are carried out at different levels, the From the past experience, coordination only activities are being implemented within a specific occurs at the level of meetings and FGDs at the geographical location. provincial level. A routine coordination meeting that incorporates emerging issues should be held - Coordination for climate related actions can every three months. The three possible institutions be carried out within a specific government that can coordinate climate change activities administration unit. Since most of the authority

39 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Institutional Analysis Institutional Analysis

emissions, should be followed up with a Technical are the Local Secretary, Planning Agency and to provide public services has be devolved must be shared with the local parliament for Guidance Document (Juklak) on climate change Environment Agency. The Local Secretary has to the district level, district governments approval. As local members often are unaware for each of the government offices. This will the role of administrating and operating public should therefore be the coordinating unit for of the local effects of climate change, and enable local government units to understand administration functions of all local agencies. the implementation of climate actions. The the need for adaptation, a convincing case how to implement the regulations. Some national The Planning Agency coordinates planning provincial government is only responsible for needs to be made to them to approve actions regulations also cannot be implemented at the and budgeting, as well as sectors, programs activities that occur across districts. for climate change adaptation. Raising the local level due to some constraining factors and between local and central governments. awareness of local government officials and such as culture, economy and politics. Each Establishing a Climate Change Council at the - Many government activities that are related elected representatives about the importance local government also has specific situation and District level is also important which should be to addressing climate change are currently of climate change adaptation should be an challenges. Hence, some adjustments to national formalized through a Governor or District Decree. planned and financed by higher levels of ongoing process. regulations are required to suit local situations. With the new DG Climate Change under the government. There is no specific budget For instance, NTT urgently needs to have wider Ministry of Environment and Forestry, subnational allocated to support the implementation of - The private sector should support climate and better dams, however, building dams with level can also refer to the structure at the national RAN-GRK or RAN-API at the local level. change related actions by shifting towards coverage of 3000 ha or above is not under the level. However, there is no clarification on the new Providing an earmarked budget is important sustainable modes of production that reduce authority of the provincial or district government. structure. to pursue national priorities at the local level. GHG emissions and adapt to climate risks. The The national government is also reluctant to build Providing a budget alone, however, is not government should support the participation such dams since they have to deal with land 4.3. Discussion and Summary sufficient to ensure that local governments of the private sector and civil society by: claims of local communities. Hence, they prefer to implement national priorities, as many local i) creating the enabling environment for build roads than building irrigation. Climate actions involve a great numbers of governments have low capacity in delivering private actors to move towards mitigating and government institutions from many different public services. After assessing their budget adapting to climate change; ii) coordinating Many activities should be carried out at the district sectors. This poses a real challenge in terms documents, the study found that capacity for actions implemented by different institutions; level and eventually the village level, however of coordination since government budget and delivering public services at the district level iii) accelerate/escalate activities that are there has been limited dialogues or engagement activities are classified into sectors. Water is lower than the provincial level. proven to be beneficial after being tested with those levels. There should be a discussion scarcity is one issue that requires a cross-sectoral by civil society or the private sector; and iv) for solving the issues through a working group approach. For instance, the agricultural sector, - Increasing the capacity of local government providing infrastructure, facilities, and others. at the provincial and district level. There should which is under the responsibility of the Ministry to develop and implement climate actions be a regulation on climate change that can detail of Agriculture, requires water for crop production. should focus on their capacity: 1) to translate activities at the village level and ensuring that the Water supply and irrigation is managed by the scientific information about climate change local action plan is implemented. Communities Ministry of Public Works. Aside from seasonal and into government policies; 2) to ensure should be consulted about policies related to climatic factors, water scarcity often occurs due coherence among priorities, policies, targets climate change. to forest clearance in upstream areas, which is and activities proposed to address climate under the authority of the Ministry of Environment change issues; 3) to deliver or implement 3. The coordination mechanism and Forestry. Besides across sectors, coordination climate actions. should also be carried out between the national, Coordination across sectors is still not effective provincial and district governments within - Strong local government leadership is crucial in addressing climate change. As described specific sectors. For example, the authority to to address issues related to climate change. above, the existing coordination mechanism develop infrastructure is also devolved to different Direction should come from elected officials for climate adaptation mainly exists because of government levels – national, provincial and while technical agencies then detail the the SPARC project, while for climate mitigation district levels - depending on the scale of dams required activities. The role of Planning Agency the coordination mechanism is no longer active or roads to be built. Although the planning and and Provincial/District/Municipality Secretary after the completion of the RAD-GRK document. budgeting are carried out at different levels, the is crucial for coordination, particularly during From the past experience, coordination only activities are being implemented within a specific the planning and budgeting process. Including occurs at the level of meetings and FGDs at the geographical location. actions for climate change adaptation in the provincial level. A routine coordination meeting planning documents will mean that local that incorporates emerging issues should be held - Coordination for climate related actions can governments have performance indicators every three months. The three possible institutions be carried out within a specific government that can be monitored and budgets will be that can coordinate climate change activities administration unit. Since most of the authority assigned. After budgets are finalized, they

39 40 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis

5. Subnational Expenditure Review SPARC and the relevant subnational government partners based on the national documents In order to estimate the total climate expenditure, including RAN-GRK and RAN-API. More examples provincial and district government expenditures of the budget codes classified as climate change were assessed based on the agreed definition related expenditures are listed in Annex 4 . and criteria. The definition and criteria used in the classification of the expenditures are included in Table 16. The definition of climate change expenditures was developed with experts from

Table 16 the definition and criteria used to classify climate expenditures

Score Definition

High Programs/activities that have: relevance - Direct impacts on GHG emission reductions, carbon stock stabilization/conservation and increase the capacity to absorb GHG emissions. The outcome of this activity can be converted to tCO2. Weighting Example: Reforestation and vegetation enrichment at the Grand Forest Park or Tahura more than (budget code: 02. .2.02.01.16.01) 70 - Direct impacts to decrease the climatic risks or vulnerabilities through increasing adaptive capacity (increase resiliency) or decreasing exposure/sensitivity of a system. The impacts can be measured by the contribution of program/activities to the indicators used to estimate the adaptive capacity index or exposure/sensitivity index. Example: Management of Famine Prone Regions (budget code: 21.1.21.01.16.01) Medium Programs/activities that have: relevance - indirect impacts on GHG emission reductions, carbon stock stabilization/conservation and increase the capacity to absorb GHG emissions. The outcome of this activity usually cannot be converted to tCO2. Weighting Example: Forest vegetation seeds/seedlings development between (budget code: 02.2.02.01.16.02) 30% to 70% - indirect impacts to decrease the climatic risks or vulnerabilities through indirectly increasing the adaptive capacity (increase resiliency) or decrease exposure/sensitivity of a system. The impacts can be measured by the contribution of program/activities that support the achievement of the indicators used to calculate the adaptive capacity index or exposure/sensitivity index. Example: Improvement of epidemiology surveillance and disease control (budget code: 02. . 1.02.01.20.14) Low Program/activities that are related to sustainable development (food security, livelihoods, and water/irrigation relevance access), environmental management and conservation Example: Waste management and monitoring Weighting (budget code: 08. 1.08.01.15.12) less than Development programs or activities that may still affect or are designed to support the implementation of climate 30% change adaptation actions. Example: Construction of School Building (budget code: 1.01.1.01.01.01.16.01) Unrelated Programs/activities that have no climate change activities at the field or policy level (the programs do not have any consideration on the climate stimuli). Activities are not related specifically on environmental management, conservation and sustainable development.

41 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis Expenditure Analysis

While the guidance provided by the RAN-GRK is adaptive capacity (increase resilience) or the DRAFT 2.2 Expenditure Analysis clearer to define climate mitigation expenditures, decreasing exposure/sensitivity of a system. The it is challenging to develop the climate adaptation impacts of climate adaptation expenditures can expenditures. The CPEIR assessment originally be measured by the contribution of program/ SPARC project to develop a definition of climate adaptation expenditures. However, as the project focuses 5. Subnational Expenditure Review SPARC and the relevant subnational government relied on the SPARC project to develop a definition activities to indicators used to estimate the mainly on community-level actions, the criteria developed by the project cannot be applied to the government partners based on the national documents of climate adaptation expenditures. However, as adaptive capacity index and exposure/sensitivity In order to estimate the total climate expenditure, including RAN-GRK and RAN-API. More examples expendituresthe . projectThe definition focuses mainly was thereforeon community-level developed byindex. experts In the involved case of NTT in theand theSPARC SPARC and project, CPEIR projects, provincial and district government expenditures of the budget codes classified as climate change and was furtheractions, consulted the criteria in developedfocused groupby the discussions project carriedthe indicators out in Kupang, used to NTTcalculate. the adaptive Comment [RP33]: re CC expenditure classification, this section doesn't seem to have were assessed based on the agreed definition related expenditures are listed in Annex 4 . cannot be applied to the government expenditures. capacity and exposure/sensitivity index are listed drawn on “Climate Public Expenditure and and criteria. The definition and criteria used in Climate adaptationThe definition expenditure was therefore isdeveloped government by experts expenditure in Table that 17. isConsidering allocated the to list decrease below, almost climatic all risks or vulnerabilities through increasing the adaptive capacity (increase resilience) or the decreasing Institutional Review (CPEIR)” methodology the classification of the expenditures are included involved in the SPARC and CPEIR projects, government activities that have output/outcome mentioned in the TORs or any of the country in Table 16. The definition of climate change exposure/sensitivityand was further of a system.consulted Thein focusedimpacts group of climate related adaptation to the indicatorsexpenditures below, canhence, be canmeasured be by the CPEIRs. expenditures was developed with experts from contributiondiscussions of program/activities carried out in Kupang, to NTT indicators . usedclassified to estimate as climate the expenditures. adaptive capacity index and I can't find anywhere where the weighting system exposure/sensitivity index. In the case of NTT and the SPARC project, the indicators used to calculate the is explained. adaptive capacity and exposure/sensitivity index are listed in Table 17. Considering the list below, almost all Table 16 the definition and criteria used to classify climate expenditures Climate adaptation expenditure is government Response: the weight assigned in listed in Table 16. governmentexpenditure activities that that is allocated have output/outcome to decrease climatic related to the indicators below, hence, can be classified as I think it is clear in every CPEIR that the assigned Score Definition climate expenditures.risks or vulnerabilities through increasing the weight is based on consensus so we cant really force countries to follow certain weightage except High Programs/activities that have: Table 17 Indicators used to estimate the adaptive capacity and exposure/sensitivity when the is an agreed weighting system globally. relevance - Direct impacts on GHG emission reductions, carbon stock stabilization/conservation and increase the capacity Table 17 Indicators used to estimate the adaptive capacity and exposure/sensitivity to absorb GHG emissions. The outcome of this activity can be converted to tCO2. Weighting Example: Reforestation and vegetation enrichment at the Grand Forest Park or Tahura Adaptive Capacity Exposure/Sensitivity more than (budget code: 02. .2.02.01.16.01) 1. Education facilities 1. Households living in riverbanks 70 - Direct impacts to decrease the climatic risks or vulnerabilities through increasing adaptive capacity (increase 2. Health facilities 2. Population density resiliency) or decreasing exposure/sensitivity of a system. The impacts can be measured by the contribution of 3. Access to energy and electricity 3. Location of villages – slope, coastal area program/activities to the indicators used to estimate the adaptive capacity index or exposure/sensitivity index. 4. Own revenue of district/provincial 4. Poor population Example: Management of Famine Prone Regions (budget code: 21.1.21.01.16.01) government 5. Agriculture lands Medium Programs/activities that have: 5. Farmer groups 6. Waste disposal facilities relevance - indirect impacts on GHG emission reductions, carbon stock stabilization/conservation and increase the capacity 6. Roads 7. Household income to absorb GHG emissions. The outcome of this activity usually cannot be converted to tCO2. 7. Access to sanitation 8. Housing types Weighting Example: Forest vegetation seeds/seedlings development between (budget code: 02.2.02.01.16.02) 30% to 70% - indirect impacts to decrease the climatic risks or vulnerabilities through indirectly increasing the adaptive The formulaThe used formula to calculate used to calculateclimate changeclimate changeexpenditure Theis detailed Public Works in Annex Agency 2. has the highest amount capacity (increase resiliency) or decrease exposure/sensitivity of a system. The impacts can be measured by the expenditure is detailed in Annex 2. of climate change expenditures (CCE) at the contribution of program/activities that support the achievement of the indicators used to calculate the adaptive The assessmentThe assessment of the provincial of the provincial government government expenditures provincial shows levelthat compared the total to climate other sectors change (Figure expenditure in capacity index or exposure/sensitivity index. 2013 was IDRexpenditures 400 billion, shows an that increase the total fromclimate IDR change 345 billion12). in 2011 The (Figureclimate expenditures 11). However, within the the the Public proportion of Comment [RP34]: are the figures planned Example: Improvement of epidemiology surveillance and disease control climate change expenditure to the total budget has declined from 13.16 per cent in 2011 to 6.95 per cent in (budget) or actual expenditure? (budget code: 02. . 1.02.01.20.14) expenditure in 2013 was IDR 400 billion, an Work Agency increased between 2010 and 2013, 2013. Three institutions with the highest spending on climate change are Public Works, Planning Agency, and What proportion of the total spending of the three Low Program/activities that are related to sustainable development (food security, livelihoods, and water/irrigation increase from IDR 345 billion in 2011 (Figure 11). where most of the budget items can be classified institutions is classified as climate related? relevance access), environmental management and conservation AgricultureHowever, and Plantation the the proportion Office atof climatethe provincial change level.as While the medium the Publicrelevance Works category. Office The Provincial mainly spends on Example: Waste management and monitoring infrastructure,expenditure the Planning to the total Agen budgetcy has provides declined supportfrom to Planninga program Agency for (Bappeda) the integrated also spent village a fairly development Response: this is historical trend – as all public Weighting (budget code: 08. 1.08.01.15.12) program for13.16 local per communities, cent in 2011 to known 6.95 per as cent Anggur in 2013. Merah . high portion of climate expenditures in 2011 expenditure analysis should focus on. less than Development programs or activities that may still affect or are designed to support the implementation of climate Three institutions with the highest spending as compared to the total climate expenditure of 30% change adaptation actions. The proportion of the spending is provided in on climate change are Public Works, Planning NTT’s provincial government. The significant Example: Construction of School Building Figure 11 and Figure 12 (budget code: 1.01.1.01.01.01.16.01) Agency, and Agriculture and Plantation Office at amount of expenditures in 2011 was mainly to the provincial level. While the Public Works Office finance a poverty reduction strategy program, Unrelated Programs/activities that have no climate change activities at the field or policy level (the programs do not have any consideration on the climate stimuli). Activities are not related specifically on environmental management, mainly spends on infrastructure, the Planning known as Anggur Merah. Around a quarter conservation and sustainable development. Agency provides support to a program for the billion of rupiah was allocated for each village. In integrated village development program for local 2011, the actual spending on Anggur Merah was communities, known as Anggur Merah. much lower than budget allocation, the budget

41 42

51 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis

DRAFT 2.2

Figure 11 Climate expenditures financed by differenv levels of government in NTT Figure 11 Climate expenditures financed by different levels of government in NTT N a Climate Expenditures - Climate Expenditure - t Deconcentration Budget Tugas Pembantuan Budget i o 800 1.200 n 700 1.000 a 600 800 l 500 Unrelated Unrelated 400 600 Low Low 300 400 IDR Billions IDR 200 Moderate Billions IDR Moderate 100 200 0 High - High 2011 2012 2013 2011 2012 2013 Year Year

P r Province o v 2500 i 2000

n c 1500 i a 1000

l Billions IDR 500

0 2010 2011 2012 2013

High Moderate Low Unrelated

D i s Formatted: Font: 10 pt, Not Bold t Sumba Timur Manggarai Sabu Raijua r i 700 600 350 c 600 500 300 t 500 250 400 400 200 300 300 150 200 200 100 100 100 50 - - 0 2010 2011 2012 2010 2011 2012 2010 2011 2012

High Moderate High Moderate High Moderate Low Unrelated Low Unrelated Low Unrelated

allocated for 2012 and 2013 was decreased. The total climate change expenditure funded by Consequently, the actual spending in 2012 and the deconcentration fund and Tugas Pembatuan 2013 was not far from the budget allocated for the is IDR 249 billion and IDR 731 billion in 2013 period. The performance of local governments in respectively. There was a decrease from 2011,52 the disbursement also influences the allocation where the total climate expenditure was IDR of future budget for specific activities . Hence, 586 billion and IDR 436 billion funded by effective management of climate finance requires deconcentration fund and Tugas Pembatuan strong capacity in service delivery, as this will allow respectively (Figure 11). Considering the for budget allocation to finance climate actions. weight assigned for each climate expenditure

43 DRAFT 2.2

The Public Works Agency has the highest amount of climate change expenditures (CCE) at the provincial level compared to other sectors (Figure 12). The climate expenditures within the Public Work Agency increased between 2010 and 2013, where most of the budget items can be classified as the medium relevance category. Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia The Provincial ProvincialPlanning ClimateAgency Public (Bappeda) Expenditure also and spent Institutional a fairly Review,high portion East Nusa of Tenggaraclimate ofexpenditures Indonesia in 2011 as compared to the total climate expenditure of NTT’s provincial government. The significant amount of expenditures in 2011 was mainly to finance a poverty reduction strategy program, known as Anggur Merah. Around a quarter billion of rupiah was allocated for each village. In 2011, the actual spending on Anggur Merah was much lower than budget allocation, the budget allocated for 2012 and 2013 was decreased. Consequently, Expenditure Analysis Expenditurethe actual spending Analysis in 2012 and 2013 was not far from the budget allocated for the period. The performance of local governments in the disbursement also influences the allocation of future budget for specific activities. Comment [RP35]: Does this mean that PBB is DRAFT 2.2 Hence, effective management of climate finance requires strong capacity in service delivery, as this will allow operating? for budget allocation to finance climate actions. Response: currently there is no mechanism to track Figure 11 Climate expenditures financed by differenv levels of government in NTT Figure 12 Climate change expenditures per sector the performance of government in deliver public Figure 11 Climate expenditures financed by different levels of government in NTT Figure 12 Climate change expenditures per sector N services against budget. What happened here is a Climate Expenditures - Climate Expenditure - 250 only tracking the disbursement of budget (or t Deconcentration Budget Tugas Pembantuan Budget actual spending against budget allocation)– no i 200 assessment on the performance of the service 800 1.200 o delivery itself n 700 1.000 a 600 150 Formatted: Font: 10 pt, Not Bold 800 l 500 Unrelated Unrelated 400 600 Billions Low Low 100 300 400 IDR Billions IDR 200 Moderate Billions IDR Moderate 100 200 50 0 High - High 2011 2012 2013 2011 2012 2013 - Year Year

P r Province o v 2500 i 2000 n c 1500 i a 1000

l Billions IDR 500 2010 2011 2012 2013

0 2010 2011 2012 2013 classificationThe total climate (Table change 15), expenditurethe proportion funded of climate by the deconcentrationdecreasing ftrendund and in climateTugas Pembatuan change expenditure is IDR 249 High Moderate Low Unrelated expendituresbillion and IDR to 731the billiontotal budget in 2013 financed respectively. by the There wasbetween a decrease 2010 from and 2011, 2012. where In theManggarai, total climate the expenditure was IDR 586 billion and IDR 436 billion funded by deconcentration fund and Tugas Pembatuan deconcentration fund was 21.4 per cent in 2011 portion of climate change expenditure to the total D respectively (Figure 11). Considering the weight assigned for each climate expenditure classification (Table 15), i andthe proportionincreased in of 2013 climate at 31.82expenditures per cent. to A the reverse total budget budgetfinanced was by the12.19 deconcentration per cent in fund2010 was and 21.4 went per s Formatted: Font: 10 pt, Not Bold t Sumba Timur Manggarai Sabu Raijua trendcent incan 2011 be and observed increased with in 20Tugas13 at 31.82Pembantuan, per cent. A reversedown trend to can10.61 be observedper cent inwith 2012. Tugas A Pembantuansimilar trend, r where the portion of climate expenditure declined from 27.37 per cent in 2011 to 25.71 in 2013. The higher i 700 600 350 where the portion of climate expenditure declined can also be observed in Sumba Timur, where the c portion of the climate expenditure in Tugas Pembantuan budget is mainly because the allocation for 600 500 300 from 27.37 per cent in 2011 to 25.71 in 2013. proportion decreased from 10.39 in 2010 to only t administration matters are not significant, therefore, more spending is allocated for financing public services. 500 250 The higher portion of the climate expenditure in 7.83 per cent in 2012. 400 The ministries with climate expenditures at the provincial level in NTT include: Ministries for Home Affairs, 400 200 300 Tugas Pembantuan budget is mainly because 300 150 Forestry, Marine and Coastal, Public Works, Agriculture and Social Services 200 200 100 the allocation for administration matters are not There is a declining trend in the proportion of The total climate expenditure in 2012 of three selected districts ranged between IDR 102 billion (Sabu Raijua) to 100 100 50 significant, therefore, more spending is allocated climate expenditure to the total budget at the IDR 168 billion (Manggarai). The proportion of the climate expenditures to the overall budget also varied. In - - 0 for financing public services. The ministries with provincial and district levels, although there was 2010 2011 2012 2010 2011 2012 2010 2011 2012 Sabu Raijua, the trend of the proportion of climate expenditures to the total budget was increasing from 7.29 climateper cent expendituresin 2010 to 11. 11at per the cent provincial in 2012. Inlevel both in Manggarai no and significant Sumba Timur change, there in the is a actualdecreasing volume trend of thein High Moderate High Moderate High Moderate NTTclimate include: change Ministries expenditure for Home between Affairs, 2010 Forestry, and 2012. In Manggarai,total climate the portion expenditure. of climate At thechange provincial expenditure level, Low Unrelated Low Unrelated Low Unrelated Marine and Coastal, Public Works, Agriculture and there was an increase from IDR 312 billion in Social Services. 2010 to IDR 400 billion in 2013. In Manggarai,

the total climate expenditure was increasing53 The total climate expenditure in 2012 of three from IDR 134 billion in 2010 to IDR 168 billion allocated for 2012 and 2013 was decreased. The total climate change expenditure funded by selected districts ranged between IDR 102 billion in 2012. There was a slight decrease in the total Consequently, the actual spending in 2012 and the deconcentration fund and Tugas Pembatuan (Sabu Raijua) to IDR 168 billion (Manggarai). climate expenditure in Sumba Timur from IDR 2013 was not far from the budget allocated for the is IDR 249 billion and IDR 731 billion in 2013 134 billion in 2010 to IDR 130 billion in 2012. period. The performance of local governments in respectively. There was a decrease from 2011,52 The proportion of the climate expenditures to the The expenditure analysis shows that many of the the disbursement also influences the allocation where the total climate expenditure was IDR overall budget also varied. In Sabu Raijua, the government activities classified as climate actions of future budget for specific activities . Hence, 586 billion and IDR 436 billion funded by trend of the proportion of climate expenditures are currently business as usual or existing/ongoing effective management of climate finance requires deconcentration fund and Tugas Pembatuan to the total budget was increasing from 7.29 activities from the previous years. The government strong capacity in service delivery, as this will allow respectively (Figure 11). Considering the per cent in 2010 to 11.11 per cent in 2012. In may not have the capacity to create well-targeted for budget allocation to finance climate actions. weight assigned for each climate expenditure both Manggarai and Sumba Timur, there is a climate actions, hence, there is an urgent need to

43 44 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia DRAFT 2.2 to the total budget was 12.19 per cent in 2010 and went down to 10.61 per cent in 2012. A similar trend can also be observed in Sumba Timur, where the proportion decreased from 10.39 in 2010 to only 7.83Expenditure per cent in Analysis 2012. There is a declining trend in the proportion of climate expenditure to the total budget at the provincial and district levels, although there was no significant change in the actual volume of the total climate expenditure. At the provincial level, there was an increase from IDR 312 billion in 2010 to IDR 400 billion in 2013. In increase the capacity of the district government to is spent on mitigation and mitigation/adaptation Manggarai, the total climate expenditure was increasing from IDR 134 billion in 2010 to IDR 168 billion in 2012. Theredevelop was plans a slight and decrease assign budgetin the total for climateaddressing expenditure activities in Sumba (Figure Timur from13). ThisIDR 134 shows billion that in many2010 to of IDR the 130climate billion actions. in 2012. The expenditure analysis shows that manymitigation of the government activities, particularlyactivities classified at the asprovincial climate actions are currently business as usual or existing/ongoing activitieslevel are from financed the previous by the years national. The government government mayThe notbiggest have tportionhe capacity of toclimate create wellexpenditures,-targeted climate actions,budget. hence,A similar there trend is an also urgent can need be observed to increase in the capacity of the district government to develop plans and assign budget for addressing climate actions. Comment [RP36]: This is mentioned under the financed by the provincial/district budgets and also Sabu Raijua district due to one activity that can Institutional Section but is not explained in detail. Theby the biggest national portion government, of climate is allocated expenditures, to climate financed bybe the classified provincial as/district both budgetadaptations and and also mitigationby the nationalchange adaptation.government In, is2012, allocated over 90to percentclimate ofchange adaptation.actions – theIn development2012, over 90 and percent finalization of climate of the Added already expendituresclimate expenditures for adaptation for adaptation were were financed financed by the provincial,spatial plan. district and national budgets. For the deconcentration fund, almost 10 per cent is spent on mitigation and mitigation/adaptation activities (Figure 13). by the provincial, district and national budgets. This shows that many of the mitigation activities, particularly at the provincial level are financed by the national governmentFor the deconcentration budget. A similar fund, trend almost also 10 can per be cent observed in Sabu Raijua district due to one activity that can be classified as both adaptation and mitigation actions – the development and finalization of the spatial plan. Figure 13 Proportion of climate expenditure allocated for adaptation and mitigation actions Figure 13 Proportion of climate expenditure allocated for adaptation and mitigation actions 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Deconcentration Tugas NTT Sumba Timur Manggarai Sabu Raijua Pembantuan

Adaptation Mitigation Adaptation & Mitigation

Comment [RP37]: This is a fundamental weakness which goes back to the lack of a The high portion of the climate adaptation Poverty and gender aspects -- Further analysis The high portion of the climate adaptation expenditures is mainly because almost all government activities can classification and weighting methodology. expenditures is mainly because almost all considering poverty and gender in the climate be classified as having a direct or indirect impact to increase adaptive capacity and/or decrease Response: No, I disagree. This is not due to the exposure/sensitivitygovernment activities. The indicatorscan be usedclassified to estimate as the vulnerabilityexpenditures index was are carried listed in out.Table The16. It analysismay be weighting methodology – rather this is because necessaryhaving a thereforedirect or toindirect develop impact a more to refinedincrease definition involved on what screeningconstitute allclimate budget adaptation items classifiedas every there is no consensus regarding what constitute development activity can be classified as climate adaptation. In this context, climate change adaptation is seen climate adaptation actions. There is no specific adaptive capacity and/or decrease exposure/ as climate expenditures that have gender and agreed indicator that can be used to measure as an adjustment that should be made considering the potential impacts of climate change that may inhibit the sensitivity. The indicators used to estimate the poverty components. The screening process adaptation actions. As explained, every activity targets of development programs. The close link of climate change adaptation and development program also that aims to achieve the objectives related to presentsvulnerability an indexopportunity are listed – since in Table mainstreaming 16. It may climate investigatedadaptation considerationthe targets andinto theoutputs development that are indicators in Table 17 is considered climate activitiesbe necessary is wide therefore open. to develop a more refined included in the budget document as shown in adaptation actions. This is unfortunately the existing agreement on the definition of climate definition on what constitute climate adaptation Table 18. For the gender component, we looked adaptation in Indonesia – or even in the rest of the Poverty and gender aspects -- Further analysis considering poverty and gender in the climate expenditures was as every development activity can be classified for activities with specific targets on women world. So, this is the definition problem and not the carried out on climate expenditures. The analysis involved screening all budget items classified as climate problem with the weighting system – which expenditureas climate sadaptation that have gender. In this and context, poverty climate components . The(Table screening 18), whileprocess activities investigate thatd thehave targets impacts and unfortunately cannot be addressed in the report. change adaptation is seen as an adjustment on livelihoods and poverty reduction, including that should be made considering the potential community empowerment, are classified as impacts of climate change that may inhibit the climate expenditure with poverty component. 54 targets of development programs. The close link of climate change adaptation and development The result shows that only 0.71 per cent of the program also presents an opportunity – since total climate relevant expenditure were gender mainstreaming climate adaptation consideration sensitive in 2010. This figure decreased further into the development activities is wide open. in 2014, with only 0.54 per cent. Although

45 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia DRAFT 2.2 DRAFT 2.2 to the total budget was 12.19 per cent in 2010 and went down to 10.61 per cent in 2012. A similar trend can also outputs that are included in the budget document as shown in Table 18. For the gender component, we looked be observed in Sumba Timur, where the proportion decreased from 10.39 in 2010 to only 7.83Expenditure per cent in Analysis 2012. Expenditurefor activities Analysiswith specific targets on women (Table 18), while activities that have impacts on livelihoods and poverty reduction, including community empowerment, are classified as climate expenditure with poverty There is a declining trend in the proportion of climate expenditure to the total budget at the provincial and component. district levels, although there was no significant change in the actual volume of the total climate expenditure. At the provincial level, there was an increase from IDR 312 billion in 2010 to IDR 400 billion in 2013. In increase the capacity of the district government to is spent on mitigation and mitigation/adaptation the proportion was declining, the total budget increment of the budget. The example of activities Manggarai, the total climate expenditure was increasing from IDR 134 billion in 2010 to IDR 168 billion in 2012. The result shows that only 0.71 per cent of the total climate relevant expenditure were gender sensitive in Comment [RP38]: of what - all expenditure or climate relevant expenditure? Theredevelop was plans a slight and decrease assign budgetin the total for climateaddressing expenditure activities in Sumba (Figure Timur from13). ThisIDR 134 shows billion that in many2010 to of IDR the allocated2010. This increased figure decreased from IDR further 3.5 billion in 2014, in 2010with only to 0.54 perthat cent. have Although gender the components proportion inwas NTT declining, is listed the in climate actions. mitigation activities, particularly at the provincial IDRtotal 4.8 budget billion allocated in 2014. increased The establishment from IDR 3.5 of billion the in 2010Table to IDR 18. 4.8 billionThe Health in 2014. Agency The establishment in 2014 had of thethe 130 billion in 2012. The expenditure analysis shows that many of the government activities classified as climate Response: addressed. actions are currently business as usual or existing/ongoing activitieslevel are from financed the previous by the years national. The government government AgencyAgency forfor WomenWomen andand ChildrenChildren Empowerment atat the provincialhighest level proportion that is resp of spendingonsible for in womengender affairssensitive in mayThe notbiggest have tportionhe capacity of toclimate create wellexpenditures,-targeted climate actions,budget. hence,A similar there trend is an also urgent can need be observed to increase in theNTT provincial may be one level of thatthe isfactors responsible to the incrementfor women of the budgetactions,. The mainly example for maternity of activities care. that have gender the capacity of the district government to develop plans and assign budget for addressing climate actions. Comment [RP36]: This is mentioned under the financed by the provincial/district budgets and also Sabu Raijua district due to one activity that can affairscomponents in NTT in mayNTT isbe listed one inof Table the factors18. The toHealth the Agency in 2014 had the highest proportion of spending in Institutional Section but is not explainedgender in detail.sensitive actions, mainly for maternity care. Theby the biggest national portion government, of climate is allocated expenditures, to climate financed bybe the classified provincial as/district both budgetadaptations and and also mitigationby the Added already nationalchange adaptation.government In, is2012, allocated over 90to percentclimate ofchange adaptation.actions – theIn development2012, over 90 and percent finalization of climate of the Table 18 Example of Gender Sensitive Activities Table 18 Example of Gender Sensitive Activities expendituresclimate expenditures for adaptation for adaptation were were financed financed by the provincial,spatial plan. district and national budgets. For the deconcentration fund, almost 10 per cent is spent on mitigation and mitigation/adaptation activities (Figure 13). Code Institution Activity Target Output by the provincial, district and national budgets. This shows that many of the mitigation activities, particularly at the provincial level are financed by the national 1.08.01.16.13 Environment The 1. Ten groups of PKK Providing education on the governmentFor the deconcentration budget. A similar fund, trend almost also 10 can per be cent observed in Sabu Raijua district due to one activity that can be Agency improvement women at the sub- environmental sector through the Green classified as both adaptation and mitigation actions – the development and finalization of the spatial plan. of education, district level; 2. Students Car; An expo on environment in Jakarta; Figure 13 Proportion of climate expenditure allocated for adaptation and mitigation actions communication of 5 district level Information dissemination on AMDAL, Figure 13 Proportion of climate expenditure allocated for adaptation and mitigation actions and schools; 3. District's UKL-UPL for the initiators, District 100% information on participation at the environment managing officials, and 90% environment Indonesia Environmental Affected community members by 80% Week Expo; 4. Initiators, developing website, and database on 70% District environment AMDAL, UKL-UPL and SPPL through: 1. 60% managing officials, Updating the database of the districts' 50% Affected community information system of AMDAL, UKL-UPL 40% members of 22 districts; and SPPL; 2. Updating the website on 30% Identifying Kampung AMDAL information; Suggestion on the 20% Iklim in accordance with location that is in line with the criteria of 10% the PROIKLIM the Kampung Iklim program 0% 1.19.03.22.05 Disaster Technical Timor area local Socialization and simulation of gender Deconcentration Tugas NTT Sumba Timur Manggarai Sabu Raijua management guidance on government (Kupang based disaster management for women Pembantuan Agency gender based districts, TTS, TTU, Belu), and the disabled disaster NGO and related Adaptation Mitigation Adaptation & Mitigation management institutions

1.22.01.15.02 Community Training on Improvement of Training of 35 members of the volunteers Comment [RP37]: This is a fundamental empowerment SiAga knowledge, attitude and and the management of the SiAga village weakness which goes back to the lack of a The high portion of the climate adaptation Poverty and gender aspects -- Further analysis agency (preparedness skills of the The high portion of the climate adaptation expenditures is mainly because almost all government activities can classification and weighting methodology. for expectant management of the beexpenditures classified asis havingmainly a becausedirect or almostindirect allimpact toconsidering increase povertyadaptive andcapacity gender and/or in the decrease climate Response: No, I disagree. This is not due to the mothers) for SiAga village and exposure/sensitivitygovernment activities. The indicatorscan be usedclassified to estimate as the vulnerabilityexpenditures index was are carried listed in out.Table The16. It analysismay be weighting methodology – rather this is because Management Posyandu necessaryhaving a thereforedirect or toindirect develop impact a more to refinedincrease definition involved on what screeningconstitute allclimate budget adaptation items classifiedas every there is no consensus regarding what constitute and development activity can be classified as climate adaptation. In this context, climate change adaptation is seen climate adaptation actions. There is no specific adaptive capacity and/or decrease exposure/ as climate expenditures that have gender and agreed indicator that can be used to measure Networking as an adjustment that should be made considering the potential impacts of climate change that may inhibit the sensitivity. The indicators used to estimate the poverty components. The screening process adaptation actions. As explained, every1.02.01.1 activity6.06 Health Agency Revitalisation 1. 1000 of SiAga village The implementation of capacity building targets of development programs. The close link of climate change adaptation and development program also that aims to achieve the objectives related to of Posyandu heads; 2. 1000 of of the SiAga village heads, SiAga presentsvulnerability an indexopportunity are listed – since in Table mainstreaming 16. It may climate investigatedadaptation considerationthe targets andinto theoutputs development that are indicators in Table 17 is considered climate (maternity Posyandu volunteers networking management and Posyandu activitiesbe necessary is wide therefore open. to develop a more refined included in the budget document as shown in adaptation actions. This is unfortunately the existing agreement on the definition of climate clinics) and volunteers definition on what constitute climate adaptation Table 18. For the gender component, we looked adaptation in Indonesia – or even in the rest of the Poverty and gender aspects -- Further analysis considering poverty and gender in the climate expenditures was development of as every development activity can be classified for activities with specific targets on women world. So, this is the definition problem and not the carried out on climate expenditures. The analysis involved screening all budget items classified as climate problem with the weighting system – which SiAga village expenditureas climate sadaptation that have gender. In this and context, poverty climate components . The(Table screening 18), whileprocess activities investigate thatd thehave targets impacts and unfortunately cannot be addressed1.02.01.15.24 in the report. Health Agency The Hospital and puskesmas 1. Procurement of 13 units of ambulance change adaptation is seen as an adjustment on livelihoods and poverty reduction, including improvement (health clinics) at the 22 for Puskesmas and hospital; 2. The that should be made considering the potential community empowerment, are classified as of health districts implementation of assessment of mother services and baby friendly hospital (maternity impacts of climate change that may inhibit the climate expenditure with poverty component. 54 hospital) and clean hospital in NTT targets of development programs. The close link province of climate change adaptation and development The result shows that only 0.71 per cent of the program also presents an opportunity – since total climate relevant expenditure were gender mainstreaming climate adaptation consideration sensitive in 2010. This figure decreased further into the development activities is wide open. in 2014, with only 0.54 per cent. Although 55

45 46 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis

Climate expenditures that benefited poverty improving nutrition for expectant mothers and reduction increased from 13.37 per cent in 2010 increasing vocational skills for poor women. to 19.52 per cent in 2014. Three government agencies that make up around 90 per cent Besides public finance, NTT also receives support of the poverty sensitive climate expenditures from development partners including international were Public Works, Local Planning Agency and local NGOs as well as international donor (BAPPEDA) and the Marine and Fisheries. The agencies. As previously discussed in Section 2, Public Work Agency in 2014 financed several local governments cannot receive international development activities that are closely related grant directly. In 2014, only few on-going projects to poverty reduction including building irrigation related to climate change in NTT (Table 19). These system, drinking water distribution system, and projects are implemented outside the government rural infrastructure development. The spending budget system , where a project management of BAPPEDA that is closely related to poverty unit is responsible for the implementation of the reduction is the community development projects. Since the proportion of non-government program, known as ANGGUR MERAH, while the expenditures on climate change is meager as Marine and Fisheries procured fishing boats for compared to the government climate expenditures, fishermen in 2014. Few activities implemented by it is important to ensure the added value of the Provincial Government has both elements of activities financed by development partners. poverty reduction and gender sensitive including:

Table 19 Examples of Climate Change and Disaster Risk Management Related Projects in NTT Donor / No Project Location Time Goals/Activities Partners

1 Bina Swadaya Disaster Risk 4 villages 17 February 2012 Cordaid/Bina • Implement risk reduction assessments and planning Reduction (Noebesa, - 30 June 2014 Swadaya • Capacity building for NGOs on disaster risk reduction Nakfunu, Nunleu • Community members reached with DRR/CCA/EMR and Oinlasi, activities located in Southeast Timor) 2 Strategic Planning and Action to 3 pilot districts End of 2012 - end GEF-SCCF/ • Provincial platform for multi-stakeholder dialogue, strengthen climate resilience of (East Sumba, of 2016 UNDP/KLH and coordination and awareness raising established, Rural Communities (SPARC) Manggarai and Bappeda with links to community, local, national and regional Sabu Raijua) networks for dissemination of knowledge and best practice. • A training program on climate change adaptation developed and institutionalized in the province and 300 persons from government agencies, universities and CSOs trained. • Provincial and district systems in place for the analysis and monitoring of climate change risks, vulnerabilities and impacts. 3 Strengthening Coastal Resilience 30 villages in 5 January 2011 - Wetlands • Capacity building/ training for Communities in Nusa Tenggara districts of Ende, December 2015 International • Bio-rights and empowering communities Timur, Indonesia Sikka, Kupang, • Advocacy/awareness raising Lembata and • Conservation and restoration specific wetlands Timor Tengah Selatan 4 Planning for Food Security in Nusa NTT No detail USAID/IRI- Strategies development for using climate information to Tenggara Timur information Columbia and enable earlier action to help prevent food-security crises. CARE Indonesia 5 Community Development Program North Central 1 January 2011 AUSAID/YMTM Poverty reduction of rural communities by increasing Through Agro-Silvo-Pastoral in Timor District, - 31 December incomes and improving food security in marginal areas Timor Tengah Utara and Nagekeo Timor Island 2013 through sustainable agro-silvo-pastoral systems and Districts of Nusa Tenggara Timur equitable development in Timor and Flores Islands in Nusa Tenggara Timur Province – Indonesia

47 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis Expenditure Analysis

Climate expenditures that benefited poverty improving nutrition for expectant mothers and 5.1. Discussion and Summary increase the government capacity in planning reduction increased from 13.37 per cent in 2010 increasing vocational skills for poor women. and budgeting for climate actions. to 19.52 per cent in 2014. Three government - All three levels of government (national, agencies that make up around 90 per cent Besides public finance, NTT also receives support provincial and district levels) finance activities - More than 90 per cent of climate expenditure of the poverty sensitive climate expenditures from development partners including international related to climate actions in NTT. The national was spent on adaptation actions. This is mainly were Public Works, Local Planning Agency and local NGOs as well as international donor government has the highest portion of climate because the indicators used to estimate the (BAPPEDA) and the Marine and Fisheries. The agencies. As previously discussed in Section 2, expenditure from the total expenditure in the adaptive capacity and the exposure/sensitivity Public Work Agency in 2014 financed several local governments cannot receive international same year as compared to the provincial are somewhat general. The climate adaptation development activities that are closely related grant directly. In 2014, only few on-going projects and district budget. The portion of climate expenditure can be considered as a proxy of to poverty reduction including building irrigation related to climate change in NTT (Table 19). These expenditure to the total budget of Dana development programs. Methodologically, it is system, drinking water distribution system, and projects are implemented outside the government Dekonsentrasi dan Tugas Pembantuan is important to develop a specific measurement rural infrastructure development. The spending budget system , where a project management more than 20 per cent, while the portion of that can capture the marginal benefit of of BAPPEDA that is closely related to poverty unit is responsible for the implementation of the climate expenditure to the total provincial adaptation activities to increasing resilience. reduction is the community development projects. Since the proportion of non-government and district budget respectively is only Without such measurement, the classification program, known as ANGGUR MERAH, while the expenditures on climate change is meager as around 10 per cent. This difference is mainly of climate adaptation actions can only be Marine and Fisheries procured fishing boats for compared to the government climate expenditures, because most the national budget spent based on qualitative assessment, which fishermen in 2014. Few activities implemented by it is important to ensure the added value of at the provincial and district levels (Dana tends to overestimate the real value of climate the Provincial Government has both elements of activities financed by development partners. Dekonsentrasi dan Tugas Pembantuan) is expenditure. poverty reduction and gender sensitive including: allocated specifically for direct spending on goods and capital. In contrast, the provincial - The expenditure analysis of CPEIR can provide Table 19 Examples of Climate Change and Disaster Risk Management Related Projects in NTT and district governments allocate 35-50 per an overall picture about how much budget Donor / cent of its total budget for personnel. is allocated to address the issues of climate No Project Location Time Goals/Activities Partners change. In other sectors, such as education, - With the high proportion of the national the government of Indonesia is committed to 1 Bina Swadaya Disaster Risk 4 villages 17 February 2012 Cordaid/Bina • Implement risk reduction assessments and planning Reduction (Noebesa, - 30 June 2014 Swadaya • Capacity building for NGOs on disaster risk reduction spending at the provincial and district levels, allocate 20 per cent of its total expenditure Nakfunu, Nunleu • Community members reached with DRR/CCA/EMR it is important to ensure the activities financed on education. In climate mitigation, however, and Oinlasi, activities located in by the national government are well-targeted the government only sets targets of emissions Southeast Timor) and according to the local needs. Some of reduction and not the budget to be allocated. 2 Strategic Planning and Action to 3 pilot districts End of 2012 - end GEF-SCCF/ • Provincial platform for multi-stakeholder dialogue, those activities are national programs to be Therefore, cost efficiency is important and the strengthen climate resilience of (East Sumba, of 2016 UNDP/KLH and coordination and awareness raising established, Rural Communities (SPARC) Manggarai and Bappeda with links to community, local, national and regional implemented at the subnational level, and assessment on the effectiveness of spending Sabu Raijua) networks for dissemination of knowledge and best practice. often they are not necessarily suitable for the is provided in the next section. • A training program on climate change adaptation local communities. This situation therefore developed and institutionalized in the province and 300 persons from government agencies, universities requires a stronger capacity of the subnational and CSOs trained. government, particularly at the district level, • Provincial and district systems in place for the analysis and monitoring of climate change risks, in planning and budgeting to ensure that the vulnerabilities and impacts. activities implemented within their jurisdiction 3 Strengthening Coastal Resilience 30 villages in 5 January 2011 - Wetlands • Capacity building/ training are beneficial for their constituents. for Communities in Nusa Tenggara districts of Ende, December 2015 International • Bio-rights and empowering communities Timur, Indonesia Sikka, Kupang, • Advocacy/awareness raising Lembata and • Conservation and restoration specific wetlands - There was a slight increase of the total climate Timor Tengah Selatan expenditure in NTT Province, Manggarai and 4 Planning for Food Security in Nusa NTT No detail USAID/IRI- Strategies development for using climate information to Sabu Raijua Districts, although the proportion Tenggara Timur information Columbia and enable earlier action to help prevent food-security crises. CARE Indonesia of climate expenditure to the total expenditure 5 Community Development Program North Central 1 January 2011 AUSAID/YMTM Poverty reduction of rural communities by increasing was declining between 2010 and 2013. The Through Agro-Silvo-Pastoral in Timor District, - 31 December incomes and improving food security in marginal areas expenditure analysis also shows that many of Timor Tengah Utara and Nagekeo Timor Island 2013 through sustainable agro-silvo-pastoral systems and Districts of Nusa Tenggara Timur equitable development in Timor and Flores Islands in the government activities classified as climate Nusa Tenggara Timur Province – Indonesia actions are currently business as usual or existing/ongoing activities. A program to

47 48 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis

Assessing the effectivess of climate expenditures

6. Assessing the effectivess of climate expenditures activity, the cost of reducing a unit carbon ($/ tCO2) can be then estimated by dividing the total The analysis on the effectiveness of climate expenditures allocated for climate mitigation in a expenditure in this report focuses only on a particular year with the total output or performance subset of activities – reforestation related to in terms of emission reduction. The analysis of climate mitigation and food production in relation cost effectiveness can help identify actions with to climate adaptation. Ideally, the analysis the lowest possible cost to achieve the targets set should focus on several activities to estimate the for climate mitigation and adaptation. cost effectiveness of mitigation and adaptation In NTT, the target of emissions reduction from the options. The cost effectiveness can then provide forestry sector is 2.137 million tCO2e or around recommendation on which activities that can 54.41 per cent of the total BAU in 2020 from the be prioritized. However, due to the limitation of forestry sector. Based on the action plan to reduce available data, this study focuses on providing emissions at the provincial level (RAD-GRK), climate in-depth analysis on a specific output related to mitigation activities include: the establishment adaptation measures where a bundle of activities of forest boundaries, forest rehabilitation and should be implemented to achieve it. The figures conservation in areas classified as production presented in this section should be treated with forests, and the establishment of community forests caution since the data used for such analysis on currently areas without forest cover. There is no were only a three-years period, hence, the results specific attempt to reduce deforestation. may change as a longer time series data were used. Despite the issues in accuracy on the This analysis therefore focuses on the effectiveness findings, the main intention of this section is to of climate mitigation expenditures, particularly forest present the possible methodology to estimate rehabilitation since this is the only focus of climate the effectiveness. As the longer time series data mitigation from the forestry sector in NTT. Forest become available, the figures presented in this rehabilitation activities are mostly implemented section should be revisited. by the provincial government. The estimation of emission reduction in the forestry sector should 6.1. Climate mitigation expenditure consider a wide range of factors including: timber species (for forest plantation), the change of land The effectiveness of climate expenditures was use (land cover of an area where forest plantations assessed based on the output that the expenditures are developed) and locations (which have can generate. The performance achieved on implication on topography, soil and others). The emission reduction of per unit government emission reduction is obtained by multiplying the spending was used to assess the impacts of performance of each activity in terms of hectares climate expenditures. Each government spending and the emission factor related to each activity, in has a specified output within a given year. For tC/ha. This assessment assumes the lowest rate climate mitigation, the contribution of the outputs of emission factor from the rehabilitation activity, to the reduction or absorption of emissions can which is 13.25 tC per hectare and with the survival be measured by multiplying the outputs of climate rate of 40% (Ekawati et al., 2012). mitigation activities with emission factors. After assessing the impact of a climate mitigation

49 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis Expenditure Analysis

The average of cost of reducing per ton CO2e 24 billion. With the average spending of IDR 5.17 Assessing the effectivess of emissions from forest rehabilitation is IDR 11,588. billion between 2010 and 2013 (Figure 14), the This figure is the average of costs of reducing total budget spent in rehabilitation by 2020 would climate expenditures emissions from forest rehabilitation between be IDR 31.05 billion, assuming that the trend of 2011 and 2013 (Figure 15). With the total target spending is stable. In reality, the survival rate may of emission reduction from the forestry sector as be lower, which will therefore increase the cost for 6. Assessing the effectivess of climate expenditures activity, the cost of reducing a unit carbon ($/ much as 2.14 million tCO2e, assuming that the per ton carbon emission reduction. tCO2) can be then estimated by dividing the total current average cost remains, the total cumulative The analysis on the effectiveness of climate expenditures allocated for climate mitigation in a budget that should be allocated by 2020 is IDR expenditure in this report focuses only on a particular year with the total output or performance DRAFTDRAFT 2.2 2.2 subset of activities – reforestation related to in terms of emission reduction. The analysis of Figure 14 Budget allocated for forest Figure 15 The effectiveness of forest climate mitigation and food production in relation cost effectiveness can help identify actions with Figure 14Figure Budgetrehabilitation 14 Budgetallocated allocated for in forest NTT for rehabilitationforest rehabilitation Figure Figure 15 The 15 effectiveness The effectivenessrehabilitation of forest of forest rehabilitation rehabilitation to climate adaptation. Ideally, the analysis the lowest possible cost to achieve the targets set in NTT in NTT should focus on several activities to estimate the for climate mitigation and adaptation. 8 8 1,4 1,4 2000020000 Formatted:Formatted: Font: Font: 10 pt,10 Notpt, NotBold Bold cost effectiveness of mitigation and adaptation In NTT, the target of emissions reduction from the 7 7 1,2 1,2 Formatted:Formatted: Font: Font: 10 pt,10 Notpt, NotBold Bold options. The cost effectiveness can then provide forestry sector is 2.137 million tCO2e or around 6 6 1,0 1,0 1500015000 recommendation on which activities that can 54.41 per cent of the total BAU in 2020 from the

5 5 0,8 0,8 be prioritized. However, due to the limitation of forestry sector. Based on the action plan to reduce 1000010000 4 4 0,6 0,6 Millions available data, this study focuses on providing emissions at the provincial level (RAD-GRK), climate Millions 3 3 0,4 0,4 in-depth analysis on a specific output related to mitigation activities include: the establishment 50005000 IDR Billion IDR Billion 2 2 0,2 adaptation measures where a bundle of activities of forest boundaries, forest rehabilitation and 0,2 1 - 0 should be implemented to achieve it. The figures conservation in areas classified as production 1 - 0 0 2011 2011 2012 2012 2013 2013 presented in this section should be treated with forests, and the establishment of community forests 0 2011 2011 2012 2012 2013 2013 caution since the data used for such analysis on currently areas without forest cover. There is no EmissionEmission Reduction Reduction (tCO2e) (tCO2e) were only a three-years period, hence, the results specific attempt to reduce deforestation. DeconcentrationDeconcentrationProvincialProvincial Budget Budget Cost (IDR/tCO2e)Cost (IDR/tCO2e) may change as a longer time series data were used. Despite the issues in accuracy on the This analysis therefore focuses on the effectiveness findings, the main intention of this section is to of climate mitigation expenditures, particularly forest 6.1. Climate6.1. Climate adaptation adaptation expenditure expenditure present the possible methodology to estimate rehabilitation since this is the only focus of climate 6.2. Climate adaptation expenditure disasters. However, the increasing trend of maize Adaptive capacity is the ability of communities to cope with climate impacts. Due to data limitation, the the effectiveness. As the longer time series data mitigation from the forestry sector in NTT. Forest Adaptive capacity is the ability of communities to cope withand climate rice production impacts. Duecan tobe dataobserved limitation in 2012, the and effectivenesseffectiveness analysis analysis focuses focuses only one only main one target main targetsector sector of climate of climate adaptation: adaptation: food foodsecurity security. The. analysisThe analysis CommentComment [SP42]: [SP42]: I am I notam nota CC a expertCC expert but but am am become available, the figures presented in this rehabilitation activities are mostly implemented Adaptivewas capacity carried isout the on ability the fluctuation of communities of rice production to in2013 response despite to thethe event number of climatic of disaster disturbances occurrence (e.g. surprisedsurprised that thatthe overallthe overall target target of adaptation of adaptation is so is so was carried out on the fluctuation of rice production in response to the event of climatic disturbances (e.g. limited to two. Probably it is relevant to the specific section should be revisited. by the provincial government. The estimation of floodingcope withflooding and climate droughts) and impacts. droughts) that affected Due that to affected thedata production limitation, the production of rice of in riceanda province in atotal province overagricultural time.over time.In the In landscase the caseof NTT,impacted. of NTT, the data the Thisdata limited to two. Probably it is relevant to the specific districtdistrict and itand is worthit is worth writing writing this thisnot notto confuse to confuse show that farmland areas were not compromised by disasters (Figure 15). Rice production has remained stable, others when other district CPEIRs are replicated. emission reduction in the forestry sector should showthe effectivenessthat farmland areasanalysis were notfocuses compromised only one by disasters increasing(Figure 15). productionRice production may has happen remained because stable, the others when other district CPEIRs are replicated. except in the period of 2009 and 2011 during and after the strong ENSO in 2009-2010. The production of rice except in the period of 2009 and 2011 during and after the strong ENSO in 2009-2010. The production of rice 6.1. Climate mitigation expenditure consider a wide range of factors including: timber main target sector of climate adaptation: food increasing of the total harvested area or productivity In any case, if these are the only two targets, then and maize dropped in 2011, which was consistent with the high number of disaster occurrence in NTT despite In any case, if these are the only two targets, then and maize dropped in 2011, which was consistent with the high number of disaster occurrence in NTT despite it is not difficult to transform those into “effects” species (for forest plantation), the change of land securityt he. Theinsignificant analysis number was carriedof land damagedout on theby the disasters.as depicted However, in the Figure increasing 16. Ricetrend productivityof maize and andrice it is not difficult to transform those into “effects” the insignificant number of land damaged by the disasters. However, the increasing trend of maize and rice and measure them, so a comparative Cost and measure them, so a comparative Cost The effectiveness of climate expenditures was use (land cover of an area where forest plantations fluctuationproduction of rice can production be observed in inresponse 2012 and to2013 the despite theits number harvested of disaster area showoccurrence increasing and total trend agricultural in the Effectiveness of various actions can then be production can be observed in 2012 and 2013 despite the number of disaster occurrence and total agricultural Effectiveness of various actions can then be lands impacted. This increasing production may happen because the increasing of the total harvested area or produced assessed based on the output that the expenditures are developed) and locations (which have landsevent impacted.of climatic This disturbances increasing productio (e.g. floodingn may happen and becauselast thefive increasing years, which of the contribute total harvested to increased area or rice produced

productivity as depicted in Figure 16. Rice productivity and its harvested area show increasing trend in the last can generate. The performance achieved on implication on topography, soil and others). The produdroughts)ctivity that as depictedaffected in the Figure production 16. Rice productivityof rice in and itsproduction. harvested area This show discussion increasing was trend proposed in the last as an Response: I have revised the sentences to clarify five years, which contribute to increased rice production. This discussion was proposed as an approximation to Response: I have revised the sentences to clarify five years, which contribute to increased rice production. This discussion was proposed as an approximation to that this is not the only target of climate emission reduction of per unit government emission reduction is obtained by multiplying the a provincemeasure over thetime. adaptive In the capacitycase of ofNTT, the theprovince data to cope approximationwith such climatic to events, measure considering the adaptive several capacityactivities that this is not the only target of climate measure the adaptive capacity of the province to cope with such climatic events, considering several activities adaptation, rather it is the sector that we focus on. have been made by the province to increase rice productivity and will be discussed below. adaptation, rather it is the sector that we focus on. spending was used to assess the impacts of performance of each activity in terms of hectares haveshow been that madefarmland by the areas province were to not increase compromised rice productivity andof the will province be discussed to cope below. with such climatic events, climate expenditures. Each government spending and the emission factor related to each activity, in by disasters (Figure 15). Rice production has considering several activities have been made by has a specified output within a given year. For tC/ha. This assessment assumes the lowest rate remained stable, except in the period of 2009 and the province to increase rice productivity and will climate mitigation, the contribution of the outputs of emission factor from the rehabilitation activity, 2011 during and after the strong ENSO in 2009- be discussed below. to the reduction or absorption of emissions can which is 13.25 tC per hectare and with the survival 2010. The production of rice and maize dropped be measured by multiplying the outputs of climate rate of 40% (Ekawati et al., 2012). in 2011, which was consistent with the high mitigation activities with emission factors. After number of disaster occurrence in NTT despite assessing the impact of a climate mitigation the insignificant number of land damaged by the

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60 60 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis

DRAFTDRAFT 2.2 2 .2

Figure 16 Fluctuation of rice and maize production in NTT Figure 16Figure Fluctuation 16 Fluctuation of rice ofand rice maize and maizeproduction production in NTT in NTT Formatted:Formatted: Font: Font: 10 10 pt, pt, Not Not Bold Bold 800 800 50 50 800 800 12 12 45 700 700 45 700 700 DRAFT 2.2 Formatted:Formatted: Font: Font: 10 10 pt, pt, Not Not Bold Bold 10 10

600 600

600 35 600 35 8 8 500 500 30 500 500 Figure 16 Fluctuation of rice30 and maize production in NTT 400 400 25 25 400 400 DRAFT6 6 2.2 Formatted: Font: 10 pt, Not Bold 800 5020 20 800300 300 12 300 300 4 4 700 4515 15 700200 Formatted: Font: 10 pt, Not Bold 200 TonsThousands 200 Thousands TonsThousands Thousands tons Thousands 200 10 Thousands tons Thousands Figure 16 Fluctuation of rice and maize production in NTT 4010 2 10 2 Thousands hectares Thousands

600 600100 100 hectares Thousands 100 800 100 355 505 8 Formatted: Font: 10 pt, Not Bold 5000 800 0 12 5000 300 0 0 700 0 450 700 Formatted: Font: 10 pt, Not Bold 400 25 400 6 10

2011 2012 2013 600 600 2010 2007 2003 2005 2011 2004 2009 2006 2008 2012 2013 2010 20 2007 2003 2005

2004 35 300 2009 300 2006 2008 8 500 500 4 15 30 200 200 TonsThousands Thousands tons Thousands 400 10 25 400 Rice ProductionRice Production 2 6 100 Rice Production hectares Thousands 100 300 Rice Production 5 20 300 Maize Production Maize Production 0 Maize Production 0 4 0 Maize Production 0 15 200 200 TonsThousands Number of Disaster Occurrence Thousands tons Thousands Impact on agricultural land 10 Number of Disaster Occurrence 2

Impact on agricultural land hectares Thousands 100 2011 2012 100 2013 2010 2007 2003 2005 2004 2009 2006 2008 5 0 0 0 0 Source:Source: National National StatisticStatistic Bureau Bureau & National& National Board Board for Disaster forRice Disater Production Management Management 2011 2012 2013 2010 2007 2003 2005 2004 2009 Rice Production2006 Source:2008 National Statistic Bureau & National Board for Disaster Management Maize Production Maize Production Several activities were implemented in 2012 in the province to increase theNumber productivityRice of Disaster Production of Occurrence rice. These activities Several activitiesImpactRice on were agricultural Production implemented land in 2012 in the province to increase the productivity of rice. These activities were financed by the deconcentration fund and also provincial APBD. District Maizeexpenditure Production was not included. were financed byMaize the Production deconcentration fund and also provincial APBD. District expenditure was not included. ThoseSeveral activities activities were were classified implemented into the following in 2012 major activities:and irrigation,village empowerment), agricultureNumber of inputs, Disaster extension landOccurrence expansion, workers Those activities Impactwere classifiedon agricultural into land the following major activities: irrigation, agriculture inputs, land expansion, foodin the security province program toSource: (inclincrease. National research the Statistic and productivity village Bureau empowerment), & National Boardand pest forextension Disaster control. Managementworkers There wasand pestan increase control. ofThere APBD food security program (incl. research and village empowerment), extension workers and pest control. There was an increase of APBD spending in rice production from IDR 13 billion in 2012 to IDR 52 billion in 2013. of rice. Thesewas an activitiesincrease of were APBD financedspending in byrice the production spending from IDR in13 ricebillion production in 2012 to fromIDR 52 IDR billion 13 inbillion 2013. SeveralSpending activities from the were deconcentration implementedSource: National fund,in 2012 Statistichowever, in the Bureau province decreased & National to increase from Board IDR the for21 4 productivityDisaster billion in Management 2011 of to rice. IDR These 140.7 activit billionies in deconcentrationSpending fund from andthe deconcentration also provincial fund, APBD. however, decreasedin 2012 from to IDR IDR 52214 billion inin 2011 2013. to IDR Spending 140.7 billion from in were2013 (Figure financed 17). by the deconcentration fund and also provincial APBD. District expenditure was not included. ThoseDistrictSeveral activities expenditure2013 activities (Figure were classified17). werewas implementednot into included. the following in 2012Those inmajor the activities:provincethe toirrigation,deconcentration increase agriculture the productivity fund, inputs, however, of land rice. expansion, Thesedecreased activit ies food weresecurity financed program by (inclthe deconcentration. research and village fund empowerment),and also provincial extension APBD. Districtworkers expenditure and pest control. was not There included. activitiesThose were activities classified were classified into the intofollowing the following major major fromactivities: IDR irrigation,214 billion agriculture in 2011 to inputs, IDR 140.7land expansion, billion was an increase of APBD spending in rice production from IDR 13 billion in 2012 to IDR 52 billion in 2013. activities:food securityirrigation, program agriculture (incl. research inputs, and landvillage empowerment),in 2013 (Figure extension 17). workers and pest control. There Spending Figurefrom the 17 deconcentrationRice Production infund, NTT however, decreasedFigure from 18 IDR Budget 214 billionallocated in 2011 for tosupporting IDR 140.7 ricebillion in was an increaseFigure of 17APBD Rice spendingProduction in in rice NTT production fromFigure IDR 18 13 Budget billion allocatedin 2012 tofor IDRsupporting 52 billion rice in 2013. 2013 expansion, (FigureSpending 17).food from security the deconcentration program (incl. fund, research however, decreased fromproduction IDR 214 billion in NTT in 2011 to IDR 140.7 billion in production in NTT 2013 (Figure 17). Formatted: Font: 10 pt, Not Bold 800 250 250 Formatted: Font: 10 pt, Not Bold 250 Formatted: Font: 10 pt, Not Bold 800 250 Formatted: Font: 10 pt, Not Bold FigureFigure 17 17 Rice ProductionProduction in in NTT NTT 200 Figure 200Figure 18 Budget 18 Budget allocated allocated for supporting for supporting rice rice 600 Figure 17 Rice Production in NTT 200 Figure 200 18production Budget allocated in NTT for supporting rice 600 production in NTT

150 production in NTT Formatted: Font: 10 pt, Not Bold 150 Billions 150 150 250 Billions Formatted: Font: 10 pt, Not Bold 800400 250 Formatted: Font: 10 pt, Not Bold 250 800 400 100 250 100 Formatted: Font: 10 pt, Not Bold

Thousands 200 100 200 100 600200 200 Thousands 200 50 600 200 50 150 150 50 Billions 50 150 150 Billions 400 - 0 400 0 100 100 - 2009 0 2010 2011 2012 2013 1000 100 2011 2012 2013 Thousands

Thousands 2011 2012 2013 200 2009 2010 2011 2012 2013 Land extension Total200 harvest (ha) 50 50 50 50Food securityLand extension ProductivityTotal (100kg/ha) harvest (ha) - ExtensiveFood service security & institutional setting 0Production0 (ton)Productivity (100kg/ha) 0 0 - Pest controlExtensive & intensification service & institutional setting Budget2009 from2009Production the2010 provincial2010 (ton)2011 budget20112012 (IDR 2012billion)2013 2013 2011 2011 2012 2012 2013 2013 AgriculturePest controlinputs & intensification Budget fromBudget the deconcentration from the provincial fund budget (IDR billion)(IDR billion) Land extensionLand extension Total harvestTotal harvest (ha) (ha) IrigationAgriculture inputs Budget from the deconcentration fund (IDR billion) Food securityFood security ProductivityProductivity (100kg/ha) (100kg/ha) Irigation ExtensiveExtensive service service& institutional & institutional setting setting ProductionProduction (ton) (ton) Pest controlPest control& intensification & intensification BudgetBudget from the from provincial the provincial budget budget (IDR billion) (IDR billion) AgricultureAgriculture inputs inputs BudgetBudget from the from deconcentration the deconcentration fund (IDR fund billion) (IDR billion) IrigationIrigation

61 61

61 61 51 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Expenditure Analysis Expenditure Analysis

DRAFTDRAFT 2.2 2 .2

Figure 16 Fluctuation of rice and maize production in NTT The effectiveness of climate adaptation actions Another example of intervention that we can Figure 16Figure Fluctuation 16 Fluctuation of rice ofand rice maize and maizeproduction production in NTT in NTT or interventions that are directed to improve rice evaluate is the construction of water ponds Formatted:Formatted: Font: Font: 10 10 pt, pt, Not Not Bold Bold 800 800 50 50 800 800 12 12 45 production can be measured by estimating the called ‘embung’. The government pays much 700 700 45 700 700 DRAFT 2.2 Formatted:Formatted: Font: Font: 10 10 pt, pt, Not Not Bold Bold DRAFT 2.2 10 10

40 40 contribution of each intervention to improve crop attention to this intervention as an approach to

600 600 600 600 35 35 8 8 productivity. The interventions implemented by the store rainwater and to supply water during the dry 500 500 30 500 500 Figure 16 Fluctuation of rice30 and maize production in NTT 400 400 25 25 400 400 DRAFT6 6 2.2 GovernmentThe effectiveness in NTT of include: climate irrigation,adaptation agriculture actions or interventionsseason. that However, are directed it is toquite improve difficult rice productionto measure Formatted: Font: 10 pt, Not Bold 800 5020 20 800300 300 12 can be measured by estimating the contribution of each intervention to improve crop productivity. The 300 300 4 4 inputs, land expansion, extension workers, and the effectiveness of the embung as there is no 700 4515 15 700200 Formatted: Font: 10 pt, Not Bold interventions implemented by the Government in NTT include: irrigation, agriculture inputs, land expansion, 200 TonsThousands 200 Thousands TonsThousands Thousands tons Thousands 200 10 Thousands tons Thousands Figure 16 Fluctuation of rice and maize production in NTT pest control. Ideally, the assessment on the information on the improvement of water supply 4010 2 10 2 Thousands hectares Thousands 600 600100 extension workers, and pest control. Ideally, the assessment on the effectiveness should be based on the 100 hectares Thousands 100 800 100 355 505 8 Formatted: Font: 10 pt, Not Bold 5000 800 0 12 effectiveness should be based on the effects of and access for domestic use and irrigation. 5000 300 0 0 effects of each additional spending of each intervention on crop production. Unfortunately, the expenditure 700 0 450 700 Formatted: Font: 10 pt, Not Bold 400 25 400 6 10 eachdata additionalavailable arespending limited, of consequently, each intervention analysis on to measureAlthough, the contribution the realization of each is frequently intervention higher to cropthan

2011 2012 2013 600 600 2010 2007 2003 2005 2011 2004 2009 2006 2008 2012 2013 2010 20 2007 2003 2005

2004 35 300 2009 300 2006 2008 8 cropproduction, production. such Unfortunately,as a multiple regression, the expenditure cannot be completed.the target Annex (Table 6 provides21), there an exampleis no guarantee of how thethe 500 500 4 15 30 200 200 TonsThousands effectiveness analysis can be carried out. Due to the limitation of the data, the result presented in Annex 6 Thousands tons Thousands 400 10 25 400 Rice ProductionRice Production 2 6 data available are limited, consequently, analysis embung development is a proper adaptation, 100 Rice Production hectares Thousands 100 should be treated as an illustration only. 300 Rice Production 5 20 300 Maize Production to measure the contribution of each intervention considering the erratic rainfall fluctuation in Maize Production 0 Maize Production 0 4 0 Maize Production 0 15 200 200 TonsThousands Number of Disaster Occurrence Thousands tons Thousands Impact on agricultural land 10 Number of Disaster Occurrence 2 toAnother crop production, example of such intervention as a multiple that we regression, can evaluat e is theNTT. construction Future ofclimate water pondscenarioss called ‘embung’.should alsoThe

Impact on agricultural land hectares Thousands 100 2011 2012 100 2013 2010 2007 2003 2005 2004 2009 2006 2008 5 0 0 cannotgovernment be completed. pays much attentionAnnex 6to providesthis intervention an as anbe approach considered to store to properlyrainwater locateand to thesupply embung water 0 0 during the dry season. However, it is quite difficult to measure the effectiveness of the embung as there is no Source:Source: National National StatisticStatistic Bureau Bureau & National& National Board Board for Disaster forRice Disater Production Management Management example of how the effectiveness analysis can be development, as building embung in projected 2011 2012 2013 2010 2007 2003 2005 2004 2009 Rice Production2006 Source:2008 National Statistic Bureau & National Board for Disaster Management Maize Production information on the improvement of water supply and access for domestic use and irrigation. Although, the Maize Production carried out. Due to the limitation of the data, the drier areas in the future can be seen as a mal- Several activities were implemented in 2012 in the province to increase theNumber productivityRice of Disaster Production of Occurrence rice. These activities realization is frequently higher than the target (Table 21), there is no guarantee the embung development is a Several activitiesImpactRice on were agricultural Production implemented land in 2012 in the province to increase the productivity of rice. These activities result presented in Annex 6 should be treated as adaptation activity. were financed by the deconcentration fund and also provincial APBD. District Maizeexpenditure Production was not included. proper adaptation, considering the erratic rainfall fluctuation in NTT. Future climate scenarios should also be were financed byMaize the Production deconcentration fund and also provincial APBD. District expenditure was not included. ThoseSeveral activities activities were were classified implemented into the following in 2012 major activities:and irrigation,village empowerment), agricultureNumber of inputs, Disaster extension landOccurrence expansion, workers anconsidered illustration to only. properly locate the embung development, as building embung in projected drier areas in the Those activities Impactwere classifiedon agricultural into land the following major activities: irrigation, agriculture inputs, land expansion, foodin the security province program toSource: (inclincrease. National research the Statistic and productivity village Bureau empowerment), & National Boardand pest forextension Disaster control. Managementworkers There wasand pestan increase control. ofThere APBD future can be seen as a mal-adaptation activity. food security program (incl. research and village empowerment), extension workers and pest control. There was an increase of APBD spending in rice production from IDR 13 billion in 2012 to IDR 52 billion in 2013. of rice. Thesewas an activitiesincrease of were APBD financedspending in byrice the production spending from IDR in13 ricebillion production in 2012 to fromIDR 52 IDR billion 13 inbillion 2013. Table 20 Development and rehabilitation of water storage called embung in NTT SeveralSpending activities from the were deconcentration implementedSource: National fund,in 2012 Statistichowever, in the Bureau province decreased & National to increase from Board IDR the for21 4 productivityDisaster billion in Management 2011 of to rice. IDR These 140.7 activit billionies in Table 20 Development and rehabilitation of water storage called embung in NTT deconcentrationSpending fund from andthe deconcentration also provincial fund, APBD. however, decreasedin 2012 from to IDR IDR 52214 billion inin 2011 2013. to IDR Spending 140.7 billion from in were2013 (Figure financed 17). by the deconcentration fund and also provincial APBD. District expenditure was not included. Items 2009 2010 2011 2012 ThoseDistrictSeveral activities expenditure2013 activities (Figure were classified17). werewas implementednot into included. the following in 2012Those inmajor the activities:provincethe toirrigation,deconcentration increase agriculture the productivity fund, inputs, however, of land rice. expansion, Thesedecreased activit ies were financed by the deconcentration fund and also provincial APBD. District expenditure was not included. food security program (incl. research and village empowerment), extension workers and pest control. There Target Realization Target Realization Target Realization Target Realization activitiesThose were activities classified were classified into the intofollowing the following major major fromactivities: IDR irrigation,214 billion agriculture in 2011 to inputs, IDR 140.7land expansion, billion was an increase of APBD spending in rice production from IDR 13 billion in 2012 to IDR 52 billion in 2013. activities:food securityirrigation, program agriculture (incl. research inputs, and landvillage empowerment),in 2013 (Figure extension 17). workers and pest control. There Spending Figurefrom the 17 deconcentrationRice Production infund, NTT however, decreasedFigure from 18 IDR Budget 214 billionallocated in 2011 for tosupporting IDR 140.7 ricebillion in was an increaseFigure of 17APBD Rice spendingProduction in in rice NTT production fromFigure IDR 18 13 Budget billion allocatedin 2012 tofor IDRsupporting 52 billion rice in 2013. Development of 1 5 1 2 1 1 1 2 2013 expansion, (FigureSpending 17).food from security the deconcentration program (incl. fund, research however, decreased fromproduction IDR 214 billion in NTT in 2011 to IDR 140.7 billion in production in NTT Embung (unit) 2013 (Figure 17). Formatted: Font: 10 pt, Not Bold 800 250 250 Formatted: Font: 10 pt, Not Bold 250 Formatted: Font: 10 pt, Not Bold Rehabilitation 30 40 30 35 30 45 30 50 800 250 Formatted: Font: 10 pt, Not Bold

Waduk, Embung FigureFigure 17 17 Rice ProductionProduction in in NTT NTT 200 Figure 200Figure 18 Budget 18 Budget allocated allocated for supporting for supporting rice rice 600 Figure 17 Rice Production in NTT 200 Figure 200 18production Budget allocated in NTT for supporting rice Irigasi, Embung 600 production in NTT Kecil (unit) 150 production in NTT Formatted: Font: 10 pt, Not Bold 150 Billions 150 150 250 Billions Formatted: Font: 10 pt, Not Bold 800400 250 Formatted: Font: 10 pt, Not Bold 250 800 400 100 250 100 Formatted: Font: 10 pt, Not Bold

Thousands 200 100 200 100 600200 200 Thousands 200 50 6.2. Discussion and Summary 600 200 50 150 150 50 Billions 50 6.3. Discussion and Summary - It is however not possible to predict whether 150 150 Billions 400 - 0 400 0 the budget allocated for climate adaptation, 100 100 - 2009 0 2010 2011 2012 2013 1000 100 2011 2012 2013 ✓ The analysis on the effectiveness of climate expenditure can provide information about whether the Thousands - The analysis on the effectiveness of climate or even specifically on food production, is

Thousands 2011 2012 2013 200 2009 2010 2011 2012 2013 Land extension budget allocated is sufficient to achieve specific climate target. The analysis requires available data Total200 harvest (ha) 50 50 50 50Food securityLand extension expenditureregarding thecan performance provide information in delivering about output over time.sufficient On climate or not.mitigation, There is we a bundlecan observe of activities that ProductivityTotal (100kg/ha) harvest (ha) - ExtensiveFood service security & institutional setting whether the budget allocated is sufficient that should be implemented to sustain the 0Production0 (ton)Productivity (100kg/ha) 0 0 - with the trend of the total spending between 2010 and 2013, the total budget allocated to achieve the Pest controlExtensive & intensification service & institutional setting Budget2009 from2009Production the2010 provincial2010 (ton)2011 budget20112012 (IDR 2012billion)2013 2013 2011 2011 2012 2012 2013 2013 to emissionachieve reductionspecific target climate should target. be sufficient, The assumingstable that thereproduction is the oftrend food of crop. spending At least and fourthe AgriculturePest controlinputs & intensification Budget fromBudget the deconcentration from the provincial fund budget (IDR billion)(IDR billion) Land extensionLand extension performance remains stable. Total harvestTotal harvest (ha) (ha) IrigationAgriculture inputs analysis requires available data regarding the government agencies are involved at the Budget from the deconcentration fund (IDR billion) Food securityFood security ✓ It is however not possible to predict whether the budget allocated for climate adaptation, or even ProductivityProductivity (100kg/ha) (100kg/ha) Irigation ExtensiveExtensive service service& institutional & institutional setting setting performance in delivering output over time. On national, provincial and district level to deliver ProductionProduction (ton) (ton) specifically on food production, is sufficient or not. There is a bundle of activities that should be Pest controlPest control& intensification & intensification Budget from the provincial budget (IDR billion) climate mitigation, we can observe that with the the activities including Public Works Agency, Budget from the provincial budget (IDR billion) Agriculture inputs implemented to sustain the stable production of food crop. At least four government agencies are Budget from the deconcentration fund (IDR billion) Agriculture inputs Budget from the deconcentration fund (IDR billion) Irigation trendinvolved of the at total the spending national, between provincial 2010 and anddistrict level toAgriculture deliver the and activities Plantation including Agency, Public Planning Works Irigation 2013,Agency, the totalAgriculture budget andallocated Plantation to achieve Agency, the Planning AgencyAgency and andFood Food Security Security and Exte andnsion Extension Service emissionAgency. reduction Some early target signals should suggest be sufficient, that, in the case of NTT,Service the increase Agency. of Somebudget early allocated signals for twosuggest out of many activities may have positive impact in maintaining and increasing food productivity. They are 61 assuming that there is the trend of spending that, in the case of NTT, the increase of 61 irrigation as well as pest control and intensification. With the limited data available, the increase of budget andallocated the performance for other activitiesremains stable.do not seem to yield positivebudget results allocated including for extension two out ofservice many andactivities food 61 security program. This finding should be interpreted carefully as it does not mean that those activities are 61 not important. It rather poses a question on the effectiveness of the implementation of those programs 51 52

61 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Stories from Sumba Timur

may have positive impact in maintaining and increasing food productivity. They are irrigation as well as pest control and intensification. With the limited data available, the increase of budget allocated for other activities do not seem to yield positive results including extension service and food security program. This finding should be interpreted carefully as it does not mean that those activities are not important. It rather poses a question on the effectiveness of the implementation of those programs or activities.

- With the absence of targets on climate adaptation and specific data on the relationship between the spending and the output/impact particularly under climatic stress, it is not possible to estimate the required budget for climate adaptation within a jurisdiction (province/district). Currently, the study can assess the overall picture at the provincial level, which can only give a possible relationship between spending and output. The analysis at the provincial level cannot also capture the situation at the district level – where the activities are implemented. The study can contribute to enhancing the methodology of CPEIR, however, the precise numbers of effectiveness of climate expenditures requires a solid database on the spending, government activities and outputs.

- The government institutions dealing with planning and budgeting will be greatly assisted by the development of database on the cost- effectiveness of climate actions. Based on the database, a monitoring system to track the performance of implementing agencies on climate actions is also recommended.

53 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Stories from Sumba Timur

53 54 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Stories from Sumba Timur

7. Stories from Sumba Timur

Sumba Timur is one of 20 districts in NTT province. insufficient food production and household level, Every year, the media reported the occurrence of due to the failure in crop production. disasters in the district. Although records of the - limited income and unstable income source. National Board for Disaster Management (BNPB) Households were unable to obtain sufficient do not show serious impacts of disaster in Sumba food through the market to compensate for Timur in the past 10 years, the district has been lower own production of food. classified as vulnerable to food insecurity by WFP (2010). Sumba is a semi-arid with more than half - dependency on purchase of food. Half of total of land area is savanna, which is suitable for dry expenditure was for food and one third had to land agriculture and pastoral development (Lasa et spend 65% of more of overall expenditure. al, 2014). Sumba Island has low rainfall intensity Three main constraints to food production in and erratic rainfall (Figure 20). In someDRAFT part 2of.2 Sumba Timur were mainly related to: lack of East Sumba, over the last 5 years the total number irrigation or water, lack of machinery, and harvest of rainy days was less than 45 days of which the failure due to pest/diseases. The main source 5.7. Stories from Sumba Timur total rainfall during that period was less than 700 of water for land cultivation was rain water, with mm (Lasa et al, 2014). The erratic climate has around 39.7% of households had access to affected the crop production and yield. irrigation in 2009 in Sumba Timur (WFP, 2010). Sumba Timur is one of 20 districts in NTT province. For the majority of households relying entirely on Figure 1920 Rainfall in Sumba Timur Every year, the media reported the occurrence of Figure 20 Rainfall in Sumba Timur rainfall, hence, drought and insufficient / poorly 180 140 disasters in the district. Although records of the distributed rainfall is a significant problem. National Board for Disaster Management (BNPB) 160 120 do not show serious impacts of disaster in Sumba 140 100 Adding to the already complicated situation, 120 Timur in the past 10 years, the district has been climate risks make Sumba island even more 100 80 classified as vulnerable to food insecurity by WFP vulnerable to food insecurity. A study carried 80 (2010). Sumba is a semi-arid with more than half of 60 out by Lasa et al. (2014) showed that there is a 60 land area is savanna, which is suitable for dry land 40 decline in rainfall trend in East Sumba. Haharu 40 agriculture and pastoral development (Lasa et al, sub-district experience drought during November- 20 20 2014). Sumba Island has low rainfall intensity and December-January and February-March-April, erratic rainfall (Figure 20). In some part of East 0 0 due to very little rainfall during 2007-2008 (Figure 2008 2009 2010 2011 2012 2013 Sumba, over the last 5 years the total number of 21). Lasa et al (2014) explains the erratic rainfall rainy days was less than 45 days of which the total between 2009 and 2011 as follows: rainfall during that period was less than 700 mm Rainfall (mm) Total rainy days (day) (Lasa et al, 2014). The erratic climate has affected “In 2009, the rain started in February and ended the crop production and yield. In 2010, World Food Programme (WFP) reported in March. In 2010, Sumba Timur enjoyed four that around 49.7 per cent of the respondents in months rainfall during starting January-April. In In 2010, World Food Programme (WFP) reported that around 49.7 per cent of the respondents in Sumba Timur Sumba Timur experienced difficulties to obtain 2011, the rain started earlier in December 2010 experienced difficulties to obtain food in the previous 30 days. WFP carried out a survey in eight districts in food in the previous 30 days. WFP carried out a and ended in February 2011 and came back NTT. The figure reported in Sumba Timur was much lower compared to the staggering level of 84 per cent survey in eight districts in NTT. The figure reported again in April 2011 when the farmers should respondents in Manggarai and 58.3 per cent in Timorin SumbaTengah SelatanTimur . wasSeveral much underlying lower causescompared of food to harvest their crops. While in 2012, there had only insecurity, as reported by WFP (2010) are: the staggering level of 84 per cent respondents rain in January. Crops stress from lack of water in Manggarai and 58.3 per cent in Timor Tengah and higher temperature creates problems namely o insufficient food production and household level, Selatan.due to the failureSeveral in cropunderlying production. causes of food water stress at plants as water loss due to high o limited income and unstable income source. Householdsinsecurity, were as unable reported to obtain by WFP sufficient (2010) food are: through the evaporation and evapotranspiration.” market to compensate for lower own production of food. o dependency on purchase of food. Half of total expenditure was for food and one third had to spend 65% of more of overall expenditure. 55

Three main constraints to food production in Sumba Timur were mainly related to: lack of irrigation or water, lack of machinery, and harvest failure due to pest/diseases. The main source of water for land cultivation was rain water, with around 39.7% of households had access to irrigation in 2009 in Sumba Timur (WFP, 2010). For the majority of households relying entirely on rainfall, hence, drought and insufficient / poorly distributed rainfall is a significant problem.

Adding to the already complicated situation, climate risks make Sumba island even more vulnerable to food insecurity. A study carried out by Lasa et al. (2014) showed that there is a decline in rainfall trend in East Sumba. Haharu sub-district experience drought during November-December-January and February-March-April, due to very little rainfall during 2007-2008 (Figure 21). Lasa et al (2014) explains the erratic rainfall between 2009 and 2011 as follows:

“In 2009, the rain started in February and ended in March. In 2010, Sumba Timur enjoyed four months rainfall during starting January-April. In 2011, the rain started earlier in December 2010 and ended in February 2011 and came back again in April 2011 when the farmers should harvest their crops. While in 2012, there had only rain in January. Crops stress from lack of water and higher temperature creates problems namely water stress at plants as water loss due to high evaporation and evapotranspiration.”

64 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

DRAFT 2.2

Stories from Sumba Timur Stories from Sumba Timur

DRAFT 2.2 Figure 20 Rainy days in Haharu Sub-District DRAFT 2.2 Figure 20 Rainy days in Haharu Sub-District 7. Stories from Sumba Timur

Sumba Timur is one of 20 districts in NTT province. insufficient food production and household level, Figure 20 Rainy days in Haharu Sub-District Every year, the media reported the occurrence of due to the failure in crop production. Figure 20 Rainy days in Haharu Sub-District disasters in the district. Although records of the - limited income and unstable income source. National Board for Disaster Management (BNPB) Households were unable to obtain sufficient do not show serious impacts of disaster in Sumba food through the market to compensate for Timur in the past 10 years, the district has been lower own production of food. Source: Lasa et al (2014) classified as vulnerable to food insecurity by WFP Source: Lasa et al (2014) (2010). Sumba is a semi-arid with more than half - dependency on purchase of food. Half of total Despite the erratic rainfall, the production of maize and rice has been steady in Sumba Timur, with an of land area is savanna, which is suitable for dry expenditure was for food and one third had to exceptionDespite thein 2009 erratic and 2010rainfall, (during the ENSO production period) whereof thereland was with a significant irrigation dropwas decreasingin food production between (Figure 2011 land agriculture and pastoral development (Lasa et spend 65% of more of overall expenditure. 22)maize. One and of the rice possible has been reasons steady is thein Sumba coverageSource: Timur, ofLasa agricultural et al (2014)and lands 2013 with (Figure irrigation, 23). This although could the also proportion be because of al, 2014). Sumba Island has low rainfall intensity Three main constraints to food production in agriculturalwith an exception land with inirrigation 2009 wasand decreasing2010 (duringSource: between Lasa et2011 althe (2014)and decline 2013 (Figure of rainfall 23). Thisin 2012-2013. could also be However, because and erratic rainfall (Figure 20). In some part of Sumba Timur were mainly related to: lack of DespitetheENSO decline the period) erratic of rainfall where rainfall, inthere 2012 the was-2013. production a However,significant of whenmaize drop the and rainfa ricewhen llhas increased beenthe rainfall steady in 2011, increasedin the Sumba total Timurinarea 2011, with, with accessthe an total to DRAFT 2.2 exceptionirrigationDespite in is 2009 also the anddeclining erratic 2010 rainfall, (during which maytheENSO production be period) caused where byof dilapidatedmaize there and was rice irrigation a significant has been infrastructure dropsteady in foodin .Sumba production Timur, (Figurewith a n East Sumba, over the last 5 years the total number irrigation or water, lack of machinery, and harvest 22)in. One foodexception of production the possible in 2009 (Figure reasonsand 2010 22). is (during the One coverage of ENSO the possibleperiod) of agricultural where there landsarea was withwith a significant irrigation, access drop toalthough irrigationin food the production proportionis also (Figuredeclining of 22). One of the possible reasons is the coverage of agricultural lands with irrigation, although the proportion of of rainy days was less than 45 days of which the failure due to pest/diseases. The main source agriculturalreasonsFigure island the 21 with Foodcoverage irrigation Production of agriculturalwas indecreasing Sumba lands Timur between with 2011 andwhichFigure 2013 22may (Figure Coverage be 23)caused. Thisof irrigation couldby dilapidated also in beSumba because irrigation Timur agricultural land with irrigation was decreasing between 2011 and 2013 (Figure 23). This could also be because total rainfall during that period was less than 700 of water for land cultivation was rain water, with theirrigation, decline of although rainfall in the 2012 proportion-2013. However, of agricultural when the rainfall infrastructure.increased in 2011, the total area with access to 5.7. Stories from Sumba Timur the decline of rainfall in 2012-2013. However, when the rainfall increased in 2011, the total area with access to mm (Lasa et al, 2014). The erratic climate has around 39.7% of households had access to irrigationirrigation60 is also decliningis also declining which which may be may caused be caused by20 dilapidated by dilapidated irrigation irrigation 30 infrastructure infrastructure. . affected the crop production and yield. irrigation in 2009 in Sumba Timur (WFP, 2010). 50Figure 21 Food Production in Sumba Timur Figure 22 Coverage of irrigation in Figure Figure21 Food 21 Production Food Production in Sumba in Sumba Timur Timur FigureFigure 22 25 Coverage 22 Coverage of irrigationof irrigation in inSumba Sumba Timur Timur Sumba Timur is one of 20 districts in NTT province. For the majority of households relying entirely on 15 Sumba Timur Every year, the media reported the occurrence of Figure 1920 Rainfall in Sumba Timur 40 Figure 20 Rainfall in Sumba Timur rainfall, hence, drought and insufficient / poorly 60 20 30 20 180 140 30 60 1020 30 disasters in the district. Although records of the distributed rainfall is a significant problem. 160 50 50 25 15 National Board for Disaster Management (BNPB) 120 20 15 15 25 do not show serious impacts of disaster in Sumba 140 40 40 5 100 Adding to the already complicated situation, Tons Thousands 10 20 2010 Timur in the past 10 years, the district has been 120 30 30 10 10 HectaresThousands climate risks make Sumba island even more Thousands Hectares 80 0 0 15 5 classified as vulnerable to food insecurity by WFP 100 20 20 15 vulnerable to food insecurity. A study carried 2008 2009 2010 2011 2012 2013 5 (2010). Sumba is a semi-arid with more than half of 80 60 5 Thousands Tons Thousands 10 10- Thousands Tons Thousands 10 10 out by Lasa et al. (2014) showed that there is a HectaresThousands Thousands HectaresThousands land area is savanna, which is suitable for dry land 60 Thousands Hectares 2008 2009 2010 2011 2012 2013 40 decline in rainfall trend in East Sumba. Haharu 0 0 Thousands Hectares 0 Rice Production (Ton) Corn Production0 (Ton) 5 5 agriculture and pastoral development (Lasa et al, 40 2008 2009 2010 2011 2012 2013 sub-district experience drought during November- 2008 2009 2010 2011 2012 2013 Irrigated lands Non-irrigated lands 20 Rice Total area (Ha) Corn Total area (Ha) - 2014). Sumba Island has low rainfall intensity and 20 - December-January and February-March-April, 2008 2009 2010 2011 2012 2013 0 0 Rice Production (Ton) Corn Production (Ton) 2008 2009 2010 2011 2012 2013 erratic rainfall (Figure 20). In some part of East due to very little rainfall during 2007-2008 (Figure Rice Production (Ton) Corn Production (Ton) Sumba, over the last 5 years the total number of 2008 2009 2010 2011 2012 2013 Rice Total area (Ha) Corn Total area (Ha) Irrigated lands Non-irrigated lands 21). Lasa et al (2014) explains the erratic rainfall Rice Total area (Ha) Corn Total area (Ha) Irrigated lands Non-irrigated lands rainy days was less than 45 days of which the total With the more erratic climate, it becomes difficult for farmers to make prediction for planting. Delays in between 2009 and 2011 as follows: Rainfall (mm) Total rainy days (day) growing crop may be ending up harvesting crops that coincided with the rainfall (Lasa et al., 2014). A smart rainfall during that period was less than 700 mm With the more erratic climate, it becomes difficult Several recommendations provided by three water management strategy should be developed to cope with the water stress. The climate data should be (Lasa et al, 2014). The erratic climate has affected “In 2009, the rain started in February and ended madefor farmersWith available the to moremake to farmers erratic prediction climateto plan for, foritplanting. becomes planting Delays difficult and to fordecide farmersimportant on theto make selectionstudies prediction are of summarizedcrops. for planting.Farmers in BoxshouldDelays 1. inhave With thegrowing more croperratic may climate be ending, it becomesup harvesting difficult crops for that farmers coincided to makewith the prediction rainfall (Lasa for planting.et al., 2014) Delays. A sma inrt the crop production and yield. options for crops that are compatible with the erratic climatic conditions. Addressing all these challenges In 2010, World Food Programme (WFP) reported in March. In 2010, Sumba Timur enjoyed four growingin growingwater crop management maycrop be may ending strategybe upending harvesting should up be harvesting cropsdeveloped that tocoincided cope with with the the water rainfall stress. (Lasa The etclimate al., 2014) data. shouldA sma rtbe that around 49.7 per cent of the respondents in months rainfall during starting January-April. In waterrequirescrops managementmade that serious available coincided attentionstrategy to farmerswith shouldthefrom to rainfall plan thebe developed forGovernment. (Lasa planting et toal., and cope Severalto decidewith recommendationsthe on waterthe selection stress. ofThe provided crops. climate Farmers bydata three shouldshould important havebe In 2010, World Food Programme (WFP) reported that around 49.7 per cent of the respondents in Sumba Timur studies are summarized in Box 1. Sumba Timur experienced difficulties to obtain 2011, the rain started earlier in December 2010 made2014). availableoptions A smart forto farmerswatercrops managementthat to areplan compatible for plantingstrategy wit andshouldh the to erratic decide climatic on the conditions.selection of Addressing crops. Farmers all these should challenges have experienced difficulties to obtain food in the previous 30 days. WFP carried out a survey in eight districts in optionsrequires for crops serious that attentionare compatible from the wit hGovernment. the erratic Severalclimatic recommendations conditions. Addressing provided all bythese three challenges important food in the previous 30 days. WFP carried out a and ended in February 2011 and came back be developed to cope with the water stress. The NTT. The figure reported in Sumba Timur was much lower compared to the staggering level of 84 per cent requiresstudies serious are attentionsummarized from in Box the 1. Government. Several recommendations provided by three important survey in eight districts in NTT. The figure reported again in April 2011 when the farmers should studiesclimate are datasummarized should inbe Box made 1. available to farmers respondents in Manggarai and 58.3 per cent in Timorin SumbaTengah SelatanTimur . wasSeveral much underlying lower causescompared of food to harvest their crops. While in 2012, there had only to plan for planting and to decide on the selection insecurity, as reported by WFP (2010) are: the staggering level of 84 per cent respondents rain in January. Crops stress from lack of water of crops. Farmers should have options for crops in Manggarai and 58.3 per cent in Timor Tengah and higher temperature creates problems namely that are compatible with the erratic climatic 64 o insufficient food production and household level, Selatan.due to the failureSeveral in cropunderlying production. causes of food water stress at plants as water loss due to high conditions. Addressing all these challenges 64 o limited income and unstable income source. Householdsinsecurity, were as unable reported to obtain by WFP sufficient (2010) food are: through the evaporation and evapotranspiration.” requires serious attention from the Government. market to compensate for lower own production of food. 64 o dependency on purchase of food. Half of total expenditure was for food and one third had to spend 65% of more of overall expenditure. 55 56

64 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

DRAFT 2.2 Stories from Sumba Timur

Box 1. Recommendations provided by three important studies on addressing climate risks on food insecurity

1. The study by WFP (2010) suggests that the vulnerability to food insecurity can be addressed by:

- Increase household food production through: better provision of water and irrigation for food crops through water conservation and rainwater harvesting; investigation and addressing crop and animal pests and diseases to prevent harvest failure in crops; provision of simple technology (i.e. tools and equipment); and increased access to agricultural knowledge. - Diversify foods cultivated at household level. The main diet of the population was rice, maize, cassava leaves, sugars and oil, with some vegetables and very little animal protein. Accordingly efforts to diversify the production base should be pursued through promoting kitchen gardens, as well as small-scale livestock production. - Improve levels and stability of rural incomes. Food insecure and vulnerable households were found more among those who rely on unsustainable, unstable and low income which include crop sale, agricultural wage labour, unskilled labour and livestock raising. Efforts to raise incomes in for these households should focus on improving the profitability of current livelihood sources as appropriate whilst at the same time encouraging diversification into activities with higher and more stable incomes. - Reduce disaster risk and severity of food security shocks. Food insecurity in the seven districts in NTT is a chronic issue made worse by sudden and repeated shocks. In order to improve household resilience to the frequent shocks which are experienced a number of interventions are recommended.

2. Study by Lasa et al (2014) suggests that in order to adapt to more extreme climate due to climate change, several adaptation measures are required, including:

- Improve water management at farmers' level. Farmers who have the water management skills and technology can be resilient to water stresses. - Identify crop varieties that are suitable for East Sumba's climate context. There is existing promising local varieties can be directly distributed to the farmers with the assistance of trained seed producer officials. - Increase options for seed storing technology that is fit for the purpose. - Adjust cropping patterns with the changing climate/weather. - Improve Multiple Cropping Systems and Agroforestry Systems.

3. SPARC project surveyed ten villages in 2014 in Sumba Timur and found that drought is common in every district. Several activities that are suggested particularly for Sumba Timur, gathered from local villages are:

- The use of high yielding varieties - Farmer school on climate information/pests - Socialization of planting calendar - Development of agroforestry systems and garden plants - Improve the livelihoods of the coastal communities i.e. seaweed - Conservation of uplands with local plants/agroforestry - Increase harvest index - Greening coastal region - Development of savannah areas - Development of an inventory system of local rice and pulse seeds - Water saving and harvesting technology - Reforestation for water conservation/expansion of rainwater - Improved transportation facilities to support agriculture activities - Efforts for adding value to agricultural products and household industry - Early warning systems and climate stations - Developing institution for farmers such as information and finance - Improved drainage and irrigation - Development of a network or installation of climate stations - Conservation of water catchments areas

57 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

DRAFT 2.2 Stories from Sumba Timur Stories from Sumba Timur

Box 1. Recommendations provided by three important studies on addressing climate risks on food insecurity Observing the RPJM 2011-2015 of Sumba Timur around 18% of the total budget is the capital shows that the issue of food security has not listed spending on land and buildings (around 8% was 1. The study by WFP (2010) suggests that the vulnerability to food insecurity can be addressed by: as one of the main priorities. The program included specifically allocated for irrigation, roads, etc). Less - Increase household food production through: better provision of water and irrigation for food crops through water in the RPJM aims to generally increase welfare than 10% was allocated for communities in the conservation and rainwater harvesting; investigation and addressing crop and animal pests and diseases to prevent and economic equality, including the increase form of social fund, grant and financial assistance. harvest failure in crops; provision of simple technology (i.e. tools and equipment); and increased access to agricultural knowledge. of income, Gini index and human development In 2013, the national government spent 591.9 - Diversify foods cultivated at household level. The main diet of the population was rice, maize, cassava leaves, sugars index. It also mentioned about economic growth, billion in Sumba Timur, while the provincial and oil, with some vegetables and very little animal protein. Accordingly efforts to diversify the production base capacity of cooperatives, and financial investment. spending at the local level in 2013 was around should be pursued through promoting kitchen gardens, as well as small-scale livestock production. - Improve levels and stability of rural incomes. Food insecure and vulnerable households were found more among The focus on agriculture is mainly on increasing 62.6 billion. In 2013 the total direct spending of those who rely on unsustainable, unstable and low income which include crop sale, agricultural wage labour, unskilled agriculture production, infrastructure and farmers the district government was IDR 308.7 billion. labour and livestock raising. Efforts to raise incomes in for these households should focus on improving the income. Without explicitly stating the priorities Public works and education were two sectors with profitability of current livelihood sources as appropriate whilst at the same time encouraging diversification into DRAFT 2.2 activities with higher and more stable incomes. to address food insecurity in RPJM, no specific the highest spending (Figure 24). DRAFT 2.2 - Reduce disaster risk and severity of food security shocks. Food insecurity in the seven districts in NTT is a chronic issue activity is usually planned, hence, budget cannot made worse by sudden and repeated shocks. In order to improve household resilience to the frequent shocks which be allocated. Does the District Government prioritize its budget are experienced a number of interventions are recommended. allocation to address the food insecurity issue? LookingObservingObserving specifically the RPJM the RPJM 2011 at- 20152011 the- of2015 Sumbafiscal of Sumba Timursituation Timur shows showsin that thethatThe is thesue district is ofsue food ofgovernment foodsecurity security has spending not has listed not listedon as oneinfrastructure as of one the of the 2. Study by Lasa et al (2014) suggests that in order to adapt to more extreme climate due to climate change, several main priorities. The program included in the RPJM aims to generally increase welfare and economic equality, adaptation measures are required, including: Sumbamain Timur, priorities. the total The budgetprogram in included 2012 was in the 629 RPJM aimsis to around generally 29 increaseper cent welfare in 2015 and (Figureeconomic 25). equality The , includingincluding the increase the increase of income, of income, Gini index Gini index and human and human development development index. index. It also It mentionedalso mentioned about about economic economic billiongrowth growth–, capacitywhere, capacity only of cooperative aroundof cooperative 6%s, andwass, financialand generated financial investment. investment. proportionThe focusThe focus onof agriculture budgeton agriculture allocated is mainly is mainly foron increasingirrigation on increasing as - Improve water management at farmers' level. Farmers who have the water management skills and technology can be fromagriculture agriculturelocal ownproduction, production,revenue. infrastructure The infrastructure remaining and farmers andportion farmers income income. Withoutcompared. Without explicitly to explicitly the statingtotal statinginfrastructure the priorities the priorities between to address to address2010 resilient to water stresses. food insecurity in RPJM, no specific activity is usually planned, hence, budget cannot be allocated. - Identify crop varieties that are suitable for East Sumba's climate context. There is existing promising local varieties of localfood revenue insecurity was in RPJM the , nonational specific government activity is usually planned,and 2012 hence, was budget around cannot 7 per be centallocated. (Figure 26). An can be directly distributed to the farmers with the assistance of trained seed producer officials. transfersLookingLooking specifically(including specifically atunconditional the at fiscal the fiscal situation grants, situation in Sumbashared in Sumba Timur, Timur, theincrease total the totalbudget of budget thein 2012 allocatedin was2012 629was budget billion 629 billion – inwhere –2013 where only was only - Increase options for seed storing technology that is fit for the purpose. revenuesaroundaround 6% and was 6% conditional generatedwas generated grants).from fromlocal The localown conditional ownrevenue revenue. The. remainingTheplanned, remaining portion where portion of localthe of localirrigationrevenue revenue wasbudget thewas nationalthemade national up - Adjust cropping patterns with the changing climate/weather. government transfers (including unconditional grants, shared revenues and conditional grants). The - Improve Multiple Cropping Systems and Agroforestry Systems. grants,government which are earmarkedtransfers (includingfor specific unconditional activities, grants,around shared 13 perrevenues cent of theand total conditional infrastructure grants) budget. The conditional grants, which are earmarked for specific activities, constituted around 10% of the total budget in constitutedconditional around grants, 10% ofwhich the totalare earmarkedbudget in 2012. for specific activities,of that yearconstituted . Moreover, around the 10% government of the total spending budget in 2012. 2012. 3. SPARC project surveyed ten villages in 2014 in Sumba Timur and found that drought is common in every district. Several in the sectors related to food production including activities that are suggested particularly for Sumba Timur, gathered from local villages are: TheThe spendingspendingThe spending ofof thethe of district districtthe district government government government in in 2012 2012in 2012was 574was billion574agriculture, billion with withthe plantation,composition the composition forestry as follows. as and follows. Afisheriesround Around 58% went 58% waswas 574 allocatedwas billionallocated for with personnel, for the personnel, composition while while around aroundas 18% follows. of 18% the of total the totalbudgetdown budget is from the is capital 14.3%the capital spending in 2013 spending onto landonly on andlandaround buildings and 12%buildings in - The use of high yielding varieties (around(around 8% was 8% specificallywas specifically alloca allocated forted irrigation, for irrigation, roads, roads, etc). etcLess). Lessthan than10% was 10% allocatedwas allocated for communities for communities in in Farmer school on climate information/pests - Aroundthe formthe 58% formof social wasof social fund,allocated fund, grant grant forand personnel, financialand financial assistance. while assistance. In 2013 In2015 ,2013 the (Figure ,national the national 24). government An government interview spent with spent 591.9 the 591.9 localbillion billionofficial in in - Socialization of planting calendar SumbaSumba Timur, Timur, while while the provincial the provincial spending spending at the at local the locallevel levelin 2013 in 2013was aroundwas around 62.6 62.6billion. billion. In 2013 In 2the013 total the total Development of agroforestry systems and garden plants - direct spending of the district government was IDR 308.7 billion. Public works and education were two sectors - Improve the livelihoods of the coastal communities i.e. seaweed direct spending of the district government was IDR 308.7 billion. Public works and education were two sectors with the highest spending (Figure 24). - Conservation of uplands with local plants/agroforestry withFigure the 23 highest Spending spending of Government(Figure 24). Offices in Figure 24 Proportion of district budget - Increase harvest index Figure Sumbar2324 Spending Timur of 2012 Government Offices in Figure 24allocation25 Proportion for infrastructure of district budget and allocation food for - Greening coastal region Figure 2324 Spending of Government Offices in Figure 2425 Proportion of district budget allocation for Sumba Timur 2012 infrastructure and food production in Sumba Timur - Development of savannah areas Sumba Timur 2012 infrastructureproduction and food in Sumbaproduction Timur in Sumba 2010-2015 Timur 2010-2015 - Development of an inventory system of local rice and pulse seeds DisasterDisaster management management 2010-2015 35,00% - Water saving and harvesting technology Social Socialwelfare welfare 35,00% Cooperative, SME - Reforestation for water conservation/expansion of rainwater Cooperative, SME 30,00%30,00% Environment - Improved transportation facilities to support agriculture activities Environment 25,00% Food security 25,00% - Efforts for adding value to agricultural products and household industry Food security Community… 20,00% - Early warning systems and climate stations Community… 20,00% Women affairs - Developing institution for farmers such as information and finance Women affairs 15,00% Forestry Billions 15,00% - Improved drainage and irrigation Forestry Billions Marine and fisheries 10,00% - Development of a network or installation of climate stations Marine and fisheries 10,00% Agriculture 5,00% - Conservation of water catchments areas Agriculture Health 5,00% Health 0,00% Public Works 0,00% Public Works 2010 2011 2012 2013 2014 2015 Education 2010 2011 2012 2013 2014 2015 Education Public Works (Infrastructure) 0 100 200 300 Public Works (Infrastructure) 0 100 200 300 Food Production & Security Food Production & Security 65

Does the District Government prioritize its budget allocation to address the food insecurity issue? The district Doesgovernment the District Governmentspending on prioritizeinfrastructure its budget is around allocati 29 onper to cent address in 2015 the (Figurefood insecurity 25). The issue?proportion The district of budget governmentallocated spending for irrigation on infrastructure as compared is to around the total 29 infrastructureper cent in 2015 between (Figure 2010 25) .and The 2012 proportion was around of budget 7 per cent 57 58allocated (Figure for 2irrigation6). An increase as compared of the toallocated the total budget infrastructure in 2013 wasbetween planned, 2010 where and 2012 the wasirrigation around budget 7 per centmade up (Figurearound 26). An13 perincrease cent of of the the total allocated infrastructure budget inbudget 2013 wasof that planned, year. Moreover,where the theirrigation government budget spending made up in the Comment [RP48]: In this environment with CC aroundsectors 13 per related cent of to the food total production infrastructure including budget agriculture, of that year plantation,. Moreover, forestry the government and fisheries spending went down in the from Commentexacerbating [RP48]: aridity In this and environment drought, irrigation with CC is a sectors14.3% related in 2013 to tofood on lyproduction around 12% including in 2015 (Figureagriculture, 24). Anplantation, interview forestry with the and local fisheries official went reveal down that from the total exacerbatinghuge issue. aridity But and it's drought, costly and irrigation has to be is dealta case 14.3% in 2013 to only around 12% in 2015 (Figure 24). An interview with the local official reveal that the total huge issue.specifically. But it's Unfortunately, costly and has toadminis be dealttering case and budget allocated for this sector is usually only 15% and should be distributed across 7 government offices specifically.managing Unfortunately, irrigation investment administering is complex and as budgetdealing allocated with forthe this food sector production is usually sector. only 15% The an agenciesd should beinclude: distributed Food acrossSecurity, 7 governmentAgriculture, officesPlantation, managingmentioned irrigation several investment times in is thecomplex report. as dealingLivestock, with the Extension food production Service, Forestry, sector. and The Fisheries. agencies include: Food Security, Agriculture, Plantation, mentioned several times in the report. Livestock, Extension Service, Forestry, and Fisheries.

67 67 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Stories from Sumba Timur

reveal that the total budget allocated for this sector is spending in other sectors, unless a revenue increase usually only 15% and should be distributed across 7 can be achieved. In the infrastructure sector, more government offices dealing with the food production budget allocated for road and bridges would reduce sector. The agencies include: Food Security, budget allocated for irrigation systems.DRAFT This 2 .2is Agriculture, Plantation, Livestock, Extension Service, why prioritization in the government planning and Forestry, and Fisheries. budgeting process is crucial. With the significant amount of the national and provincial spendingDRAFT at 2 .2 With the limited government budget, there is a trade the district level, it is imperative to better coordinate off where more spending in one sectorFigure means 25 26less Infrastruc ture Budget of Sumba Timur

90,00 Figure 25 Infrastructure Budget of Sumba Timur Figure 2526 Infrastructure Budget of Sumba Timur 80,00 90,00 70,00 80,00 60,00 70,00

60,00 50,00

50,00 Billions 40,00

Billions 40,00 30,00 30,00 20,00 20,00 10,00 10,00 7,81 6,13 4,93 3,91 7,81 0,00 0,00 6,13 4,93 3,91 2010 2010 2011 2011 20122012 20132013 Irrigation IrrigationRoad and bridgesRoad and bridgesDrainageDrainageWaterWater supply supply FloodFlood control control Others betweenWith the different limited governmentsources of finance. budget ,In there 2013, is thea trade offand where IDR 40more million spending per hectare in one in sector 2013 andmeans 2014 less With the limited government budget, there is a trade off where more spending in one sector means less totalspending infrastructure in other sectors, budget unless spent a byrevenue the national increase can berespectively. achieved. In The the infrastructuredevelopment of sector, embung more in budget2013 spending in other sectors, unless a revenue increase can be achieved. In the infrastructure sector, more budget governmentallocated fo rin road Sumba and bridgesTimur was would IDR reduce276 billion, budget allocatedrequired for irrigationas much systemsas IDR 1. billionThis is perwhy unit. prioritization in the governmentallocated planning for road andand bridges budgeting would process reduce budget is crucial. allocated With for the irrigation significant systems amount. This is of why the prioritization national and while the provincial budget spent on infrastructure provincial spendingin the government at the planning district and level, budgeting it i sprocess is crucial. With the significant amount of the national and in Sumba Timur was IDR 7.7 billion (Figure 27). imperative toprovincial better coordinatespending at between the district different level, it isFigure 27 Spending of different government levels on Assessingsources of finance.the budget In 2013, document, the total infrastructurethe national imperative to better coordinate between different Figure 27 Spending of different government levels on governmentbudget spent was by responsible the national to build government the irrigation in Figure 27 Spending of different government sources of finance. In 2013, the total infrastructure 300 systemSumba inTimur the district,was IDR while 276 the billion development, while theof levels on infrastructure in Sumba Timur 2013 budget spent by the national government in embungprovincial (small budget dams spent or on reservoirs) infrastructure in the in districtSumba 250 Timur was IDR 7.7 billion (Figure 27). Assessing the 300 was carried Sumbaout by Timurboth wasthe IDRnational, 276 billionprovincial, while the budget document, the national government was 200 provincial budget spent on infrastructure in Sumba andresponsible district governments.to build the Theirrigation district system government in the 250 Timur was IDR 7.7 billion (Figure 27). Assessing the 150 isdistrict, responsible while theto rehabilitate development the ofirrigation embung system. (small

budget document, the national government was Billions 200 Thedams budget or reservoirs) allocated in by the the district district wasgovernment carried outon 100 irrigationby both includestheresponsible national for the to, managementbuildprovincial the irrigation and of irrigation systemdistrict in the 50 150 systemsgovernments. in thedistrict, districtThe while throughdistrict the development better government distribution of embung oris (small responsible to rehabilitate the irrigation system. Billions water. The WFPdams report or reservoirs) (2010) in reported the district that was when carried out 0 100 The budget allocated by the district government communitiesby have both access the national to irrigation,, provincial they andalso district National Provincial District on irrigation includes for the management of 50 haveirrigation a set ofsystems governments.problems in includingthe Thedistrict lackdistrict thr of ough watergovernment betterat the is responsible to rehabilitate the irrigation system. Road and bridges Irrigation Water Others startdistribution of the seasons or water and. alsoThe lackWFP of maintenance.report (2010) 0 reported that when communities have access to In Sumba Timur,The budgetonly 32% allocated of respondents by the district reported government National Provincial District irrigation, they also have a set of problems including lack of water at the start of the seasons and also lack of problems withon irrigation, irrigation whichincludes is lowestfor the compared management of maintenance. In Sumba Timur, only 32% of respondents reported problems with irrigation, which is lowest to eight districtsirrigation surveyed systems in thein thestudy. district The thr costough of better compared to eight districts surveyed in the study. The cost ofRoad building and bridges irrigationIrrigation variedWater betweenOthers IDR 39.2 buildingmillion and irrigation IDRdistribution 40 varied million or between waterper .hectare IDRThe 39.2WFP in 2013millionreport and (2010) 2014 respectively. The development of embung in 2013 required as muchreported as IDRthat 1 wbillionhen communities per unit. have access to irrigation, they also have a set of problems including lack of water at the start of the seasons and also lack of maintenance. In Sumba Timur, only 32% of respondents reported problems with irrigation, which is lowes 59t compared to eight districts surveyed in the study. The cost of building irrigation varied between IDR 39.2 million and IDR 40 million per hectare in 2013 and 2014 respectively. The development of embung in 2013 required as much as IDR 1 billion per unit.

68 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Stories from Sumba Timur Stories from Sumba Timur DRAFT 2.2 reveal that the total budget allocated for this sector is spending in other sectors, Besideunless abuilding revenue infrastructure,increase the Agriculture Office is Figure 28 Composition of spending in food production (agriculture, marine and fisheries, and usually only 15% and should be distributed across 7 can be achieved. In the infrastructureresponsible sector,for agriculture more development and the production food security) was around 78.6 billion in the same government offices dealing with the food production budget allocated for road andproduction bridges of would food reduce crop. The spending of the national and year. The major district government spending is provincial governments in the sectors related to food 100% sector. The agencies include: Food Security, budget allocated for irrigation systems.DRAFT This 2 .2is mainly on providing agriculture inputs and facilities Agriculture, Plantation, Livestock, Extension Service, why prioritization in the governmentproduction planningwere around and 7.4 and 6.2 billion in 2012 such as machineries, fertilizers, roads and others respectively. The total budget of three main agencies Forestry, and Fisheries. budgeting process is crucial.dealing With with the food significant production (agriculture, marine and (Figure 28). Seedling provision and intensification 50% amount of the national andfisheries, provincial and spendingfoodDRAFT security) at 2 .2 was around 78.6 billion in the of crop production are also financed by the district With the limited government budget, there is a trade the district level, it is imperativesame toyear better. The coordinate major district government spending is government budget. off where more spending in one sectorFigure means 25 26less Infrastruc ture Budget of Sumba Timur mainly on providing agriculture inputs and facilities such as machineries, fertilizers, roads and others (Figure 28). 0% With the significant amount of spending that is Seedling provision and intensification of crop production 90,00 Figure 25 Infrastructure Budget of Sumba Timur 2010 2011 2012 2013 allocated for food production at all government Figure 2526 Infrastructure Budget of Sumba Timur are also financed by the district government budget. 80,00 Technology Seedling levels, adjustment to these activities can be 90,00 70,00 With the significant amount of spending that is allocated Diversification Land and water carried out considering existing climate risks. 80,00 for food production at all government levels, adjustment to Intensification Institution 60,00 Facilities Research & Policies As previously discussed, several activities have 70,00 these activities can be carried out considering existing been proposed to address the impact of erratic 60,00 50,00 climate risks. As previously discussed, several activities have Beside building infrastructure, the Agriculture climatic conditions in Sumba Timur to reduce 50,00 Billions 40,00 been proposed to address the impact of erratic climatic conditions in Sumba Timur to reduce the vulnerability to food insecurity. This may not need to be a significant reallocationOffice isof responsiblefinancial resources for agriculture of the government development the vulnerability to food insecurity. This may not Billions 40,00 30,00 budget, but rather making small adjustment to the existing activitiesand the as productionproposed in ofTable food 22 .crop. The spending need to be a significant reallocation of financial 30,00 20,00 20,00 of the national and provincial governments in the resources of the government budget, but rather 10,00 Table 21 Possible Adjustment to Government Activities 10,00 7,81 to Support SPARC Proposed Interventionssectors in Sumba related Timur to Districtfood production were around making small adjustment to the existing activities 6,13 4,93 3,91 7,81 0,00 0,00 6,13 4,93 3,91 SPARC Proposed Existing Government Activities 7.4 andPossible 6.2 Adjustmentbillion in 2012 respectively. The total as proposed in Table 22. 2010 2010 2011 2011 20122012 Intervention20132013 budget of three main agencies dealing with food Irrigation IrrigationRoad and bridgesRoad and bridgesDrainageDrainageWaterWater supply supply FloodFlood control control - TheOthers use of high yielding - Seedling for food crops IDR 850 - Prioritizing water resistant (and pest-disease varieties million, for horticulture/fruit crops IDR resistant) seedling for food crops in the on- - Development of an 250 million (Agriculture Office) Tablegoing activities 19 Examples of Climate Change and Disaster Risk Management Related Projects in NTT betweenWith the different limited governmentsources of finance. budget ,In there 2013, is thea trade offand where IDR 40more million spending per hectare ininventory one in sector 2013system andmeans of local 2014 less - Yearling animals, around IDR 1 billion SPARC- Priori Proposedtizing breeds Intervention that are suitable forExisting the Government Activities Possible Adjustment With the limited government budget, there is a trade off where more spending ricein one and sector pulse seedsmeans (seed less (Livestock Office) climatic condition in Sumba spending in other sectors, unless a revenue increase can be achieved. In the infrastructure sector, more budget total infrastructure budget spent by the national respectively. The developmentcenter) of embung in 2013 spending in other sectors, unless a revenue increase can be achieved. In the infrastructure sector, more budget - The use of high yielding varieties - Seedling for food crops IDR 850 million, - Prioritizing water resistant (and pest-disease governmentallocated fo rin road Sumba and bridgesTimur was would IDR reduce276 billion, budget allocatedrequired for irrigationas much systemsas IDR 1Increased. billionThis is perwhy utilization unit. prioritization of - Field training (sekolah lapang) on - Adding a component on climate information in the governmentallocated planning for road andand bridges budgeting would process reduce budget is crucial. allocated With for the irrigation significant systems amount. This is of why the prioritization national and - Development of an inventory system of local for horticulture/fruit crops IDR 250 million resistant) seedling for food crops in the on-going while the provincial budget spent on infrastructure climate information and integrated pest control – IDR 50 millionrice andto pulse the fieldseeds training, (seed center) and coordinate(Agriculture with Office) activities provincial spendingin the government at the planning district and level, budgeting it i sprocess is crucial. With the significant amountthe use of of the pesticides national and in 2013 (under Plantation Office) Meteorology and Climatology Agency- Yearling (BMKG animals,) around IDR 1 billion - Prioritizing breeds that are suitable for the climatic in Sumba Timur was IDR 7.7 billion (Figure 27). imperative toprovincial better coordinatespending at between the district different level, it isFigure 27 Spending of different government levels on - Pesticides IDR 115 million respectively or agricultural extension office to run(Livestock the Office) condition in Sumba Assessingsources of finance.the budget In 2013, document, the total infrastructurethe national for plantation and food crop offices climate field school program imperative to better coordinate between different Figure 27 Spending of different government levels on governmentbudget spent was by responsible the national to build government the irrigation in Figure 27 Spending of different government - Vaccination for livestock IDR 939 Increased- Since utilization pests of and climate diseases information are the common- Field training (sekolah lapang) on integrated - Adding a component on climate information to the and the use of pesticides pest control – IDR 50 million in 2013 (under field training, and coordinate with Meteorology and Sumba Timursources was of IDRfinance. 276 In 2013,billion the, totalwhile infrastructure the 300 million cause of the harvest failure, the assessment of system in the district, while the development of levels on infrastructure in Sumba Timur 2013 the baseline situation should be carriedPlantation out Office) to Climatology Agency (BMKG) or agricultural extension provincial budgetbudget spent spent on by infrastructure the national ingovernment Sumba in embung (small dams or reservoirs) in the district 250 inform better management of pesticides- Pesticides and IDR 115 million respectively for office to run the climate field school program Timur was IDRSumba 7.7 billionTimur (Figurewas IDR 2 7)2.76 Assessing billion, whilethe the 300 plantation and food crop offices - Since pests and diseases are the common cause of was carried out by both the national, provincial vaccination - Vaccination for livestock IDR 939 million the harvest failure, the assessment of the baseline budget document, the national government was 200 and district governments.provincial budget The spent district on infrastructure government in Sumba situation should be carried out to inform better responsible to build the irrigation system in the 250 Socialization of the - Field training (sekolah lapang) on - Adding the planting calendar developed by management of pesticides and vaccination is responsibleTimur to rehabilitatewas IDR 7.7 billionthe irrigation (Figure 27 system.). Assessing the 150 district, while the development of embung (small planting calendar integrated pest control – IDR 50 millionSocialization the Ministry of the planting of Agriculture calendar into the- moduleField training of (sekolah lapang) on integrated - Adding the planting calendar developed by the budget document, the national government was Billions 200 Thedams budget or reservoirs) allocated in by the the district district wasgovernment carried outon 100 in 2013 (under Plantation Office) field training pest control – IDR 50 million in 2013 (under Ministry of Agriculture into the module of field training - Build into the training materials for extension irrigationby both includestheresponsible national for the to, managementbuildprovincial the irrigation and of irrigation systemdistrict in the Plantation Office) - Build into the training materials for extension workers 150 workers and/or other training facilities and/or other training facilities governments. The district government is 50 systems in thedistrict, district while through the development better distribution of embung or (small - Coordinate between agencies to research, - Coordinate between agencies to research, develop and responsible to rehabilitate the irrigation system. Billions disseminate information water. The WFPdams report or reservoirs) (2010) in reported the district that was when carried out 0 100 develop and disseminate information The budget allocated by the district government - Development of No existing support provided by the - Development- Carried of outagroforestry together systems between and forestry,No existing support provided by the - Carried out together between forestry, plantation and communitiesby have both access the national to irrigation,, provincial they andalso district National Provincial District on irrigation includes for the management of 50 agroforestry systems and government gardenplantation plants and agriculture/livestockgovernment agencies agriculture/livestock agencies haveirrigation a set ofsystems governments.problems in includingthe Thedistrict lackdistrict thr of ough watergovernment betterat the is garden plants - Conservation of upland areas through Road and bridges Irrigation Water Others measures such as agroforestry responsible to rehabilitate the irrigation system. - Conservation of upland startdistribution of the seasons or water and. alsoThe lackWFP of maintenance.report (2010) 0 reported thatThe w budgethen communities allocated by thehave district access government to areas through measures Development of coastal communities and - Seedling for seaweed IDR 103 billion - Supply the inputs for seaweed production such as In Sumba Timur, only 32% of respondents reported National Provincial District institutions i.e. seaweed cultivation and - Facilities to support seaweed cultivation IDR wood stick to protect the surrounding forest. irrigation, they also have a set of problems including lack of water at the start of thesuch seasons as agroforestry and also lack of problems withon irrigation, irrigation whichincludes is lowestfor the compared management of businesses 1.6 billion maintenance. In Sumba Timur, only 32% of respondents reported problems with irrigation, which is lowest to eight districtsirrigation surveyed systems in thein thestudy. district The thr costough of better Increased harvest index No existing support provided by the - Consider planting calendar that determines the compared to eight districts surveyed in the study. The cost ofRoad building and bridges irrigationIrrigation variedWater betweenOthers IDR 39.2 government planting seasons based on rainfall fluctuation buildingmillion and irrigation IDRdistribution 40 varied million or between waterper .hectare IDRThe 39.2WFP in 2013millionreport and (2010) 2014 respectively. The developmen t of embung in 2013 68 required as muchreported as IDRthat 1 wbillionhen communities per unit. have access to irrigation, they also have a set of problems including lack of water at the start of the seasons and also lack of maintenance. In Sumba Timur, only 32% of respondents reported problems with irrigation, which is lowes 59t 60 compared to eight districts surveyed in the study. The cost of building irrigation varied between IDR 39.2 million and IDR 40 million per hectare in 2013 and 2014 respectively. The development of embung in 2013 required as much as IDR 1 billion per unit.

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Stories from Sumba Timur

SPARC Proposed Intervention Existing Government Activities Possible Adjustment Greening the coastal regions Rehabilitation of mangrove IDR 70 million - Consider the flow of air into a region, the mangrove should prevent abrasion and/or extreme wind speed Development of savannah areas No existing support provided by the - Demand for meat needs a large area for livestock government cultivation Water saving and harvesting technologies - Building embung (Plantation and Livestock - Conserve forested area that supply the water for Reforestation for water conservation / Offices) – precise allocation is not available embung expansion of rainwater - Provincial government spent IDR 5.5 billion - Better management of water distribution for building embung in Sumba Timur - Regulation to use the embung for irrigation and other DRAFT 2.2 purposes

Figure 29 Food production and irrigation per sub-district in Sumba Timur Early warning systems and climate stations No existing support provided by the - Work together with the existing SMESTA project- which government aims to disseminate weather information through short message service Developing institutions for farmers such as Numerous institutional building programs for -Strengthening existing farmers institutions, if any information and finance farmers implemented by different agencies - Training on financial management Development of a network or installation of No existing support provided by the - work with BMKG to establish climate station climate stations government - location of the station should consider the pilot for climate field school or agricultural area/topographic condition Conservation of water catchment areas Under the Ministry of Forestry – IDR 1.6 billion - Selection of trees that can prevent high wind speeds/ through DAK Forestry wind breaks -Formation and location of the tree plantation to conserve water

DRAFT 2.2 Figure 29 Food production and irrigation per sub-district in Sumba Timur Figure 29 Food production and irrigation per sub-district in Sumba Timur

Source: Authors’ own analysis based on SumbaSource: Authors’ Dalam own Angka analysis based 2013 on Sumba Dalam Angka 2013

7.1. Summary national and provincial spending is according to the local needs . At the district level, it is - Local and national budgets for climate change also possible to observe a comprehensive 70 actions should be well coordinated. The district picture on government spending, government level is the government administrative unit performance in delivering public services and where most government activities, including also the achievement of targets or output. One in sectors related to climate adaptation, are suggestion is to use the intergovernmental implemented. A strong coordination at the fiscal transfers to finance national priorities district level is therefore crucial to ensure the at the district level, instead of using the

Source: Authors’ own analysis based on Sumba Dalam Angka 2013 61

70 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Stories from Sumba Timur Stories from Sumba Timur

SPARC Proposed Intervention Existing Government Activities Possible Adjustment deconcentration fund and Tugas Pembantuan The planning and budgeting of many large- Greening the coastal regions Rehabilitation of mangrove IDR 70 million - Consider the flow of air into a region, the mangrove as the decision making process of these funds scale activities at the district level are also should prevent abrasion and/or extreme wind speed remain at the national level although the under the authority of the national government. Development of savannah areas No existing support provided by the - Demand for meat needs a large area for livestock implementation is carried out at the local level. Furthermore, the international finance cannot government cultivation With the intergovernmental fiscal transfers, the be channelled directly to the district government Water saving and harvesting technologies - Building embung (Plantation and Livestock - Conserve forested area that supply the water for Reforestation for water conservation / Offices) – precise allocation is not available embung decision making process is carried out at the without going through the national on-granting expansion of rainwater - Provincial government spent IDR 5.5 billion - Better management of water distribution local level. system. for building embung in Sumba Timur - Regulation to use the embung for irrigation and other DRAFT 2.2 purposes - District governments have limited budget to - The finding of the district level analysis Figure 29 Food production and irrigation per sub-district in Sumba Timur Early warning systems and climate stations No existing support provided by the - Work together with the existing SMESTA project- which finance public services, therefore, an increase suggest for: 1) with the limitation of the district government aims to disseminate weather information through short of budget allocation in a specific sector will government budget, priorities can be given to message service eventually reduce the budget allocated in adjusting the existing government activities Developing institutions for farmers such as Numerous institutional building programs for -Strengthening existing farmers institutions, if any others. District governments can propose considering climatic risks; 2) as the national information and finance farmers implemented by different agencies - Training on financial management for activities to be financed by the national government withholds the authority to finance Development of a network or installation of No existing support provided by the - work with BMKG to establish climate station climate stations government - location of the station should consider the pilot for government through the Tugas Pembantuan many activities at the provincial and district climate field school or agricultural area/topographic scheme, however, the final decision of the levels, a transfer mechanism can be created to condition proposal lies with the national government. finance climate actions at the local level. Conservation of water catchment areas Under the Ministry of Forestry – IDR 1.6 billion - Selection of trees that can prevent high wind speeds/ through DAK Forestry wind breaks -Formation and location of the tree plantation to conserve water

DRAFT 2.2 Figure 29 Food production and irrigation per sub-district in Sumba Timur Figure 29 Food production and irrigation per sub-district in Sumba Timur

Source: Authors’ own analysis based on SumbaSource: Authors’ Dalam own Angka analysis based 2013 on Sumba Dalam Angka 2013

Source: Authors’ own analysis based on Sumba Dalam Angka 2013 61 62

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Conclusion and Recommendations

8. Conclusion and Recommendations

This report has so far captured the complexity of government level has budget allocated specifically government spending under the decentralization for local communities, a further study should be context and how it affects the management of carried out to analyze the effectiveness of this climate expenditure at the local level. Several direct support to local communities. concluding remarks to summarize the findings are: Based on the findings of this study, several actions can be proposed as detailed below. First, the management of climate finance at the subnational level should consider the delegation POLICY of authority in public service delivery, particularly in sectors that are relevant to climate mitigation 1. Making a clear statement in the planning and adaptation. The report discusses in detail how document and formalize climate targets in the devolved authority varies depending on the government regulations. sectors and the scale of the activities implemented. As the devolution of power is not straight forward, In order to allocate budgets, governments coordination has become a major challenge . should follow certain planning processes. Planning documents will be the main Second, the district level is the administrative unit reference during the budgeting process. that implements most government activities. All Activities cannot be proposed without being spending of the national and provincial level will included in the planning document. Moreover, be implemented within a specific geographical learning from the lessons of the development location mostly within a district, with exception of and implementation of RAN-GRK and RAN- large-scale program such as national or provincial API, it is obvious that mentioning a specific roads. Strong coordination at the district level is target in some government regulations can hence crucial. help governments to focus on achieving such targets. The public also has a strong Third, many of activities classified as climate actions basis to hold the government accountable in in this report are business as usual or ongoing/ achieving such targets. existing programs. Despite the urgency to address the issue of food insecurity, not many activities are There is, however, low capacity in planning specifically planned or implemented to address and budgeting at the subnational level. Several the problem. Provincial and district governments issues that have been detected related to the can focus on making several adjustments to their planning and budgeting process include: existing activities/programs considering climatic risks and increasing resilience, which may not be – Lack of coherence between activities and too costly. performance indicators or targets. For instance, although climate change was Fourth, the assessment has been so far focused specifically mentioned in the RPJM at the on the management of finance at different levels provincial level, the specific performance of government. The important aspect of financial indicators or targets were mainly for flow from the government to local communities community forests and the number of has been largely neglected in the assessment disaster response plans and climate change as this is outside the scope of the study. Every at the village level . Meanwhile, significant

63 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Conclusion and Recommendations Conclusion and Recommendations

issues that are faced almost every year, such spending at the district level was carried out 8. Conclusion and Recommendations as food insecurity and how to adapt under at the national and provincial levels, with a more erratic climate, were not specifically limited involvement of district governments. addressed. District governments rely significantly on the This report has so far captured the complexity of government level has budget allocated specifically national transfers (DAU, DBH and DAK) in government spending under the decentralization for local communities, a further study should be – Many activities at the subnational level refer financing public services at the district level, context and how it affects the management of carried out to analyze the effectiveness of this mainly to the national level activities without with around 10-17 per cent of these transfers climate expenditure at the local level. Several direct support to local communities. adjusting them to the specific local situation. earmarked for specific purposes. With the concluding remarks to summarize the findings One of many benefits of decentralization existing fiscal landscape at the local level, two are: Based on the findings of this study, several actions is that local governments can cater to the main challenges are how to: can be proposed as detailed below. needs of their local constituents. Therefore, First, the management of climate finance at the implementing national programs without - ensure the national/provincial spending is subnational level should consider the delegation POLICY carefully assessing the costs and benefits well coordinated with the district government. of authority in public service delivery, particularly should be avoided particularly when the Since the planning process of the national/ in sectors that are relevant to climate mitigation 1. Making a clear statement in the planning district/provincial governments contribute provincial spending at the district level and adaptation. The report discusses in detail how document and formalize climate targets in to the implementation of these activities is not under the authority of the district the devolved authority varies depending on the government regulations. using their limited financial resources. government, the involvement of district sectors and the scale of the activities implemented. For instance, more than IDR 3 billion was government is crucial as they are the most As the devolution of power is not straight forward, In order to allocate budgets, governments specifically allocated in Sumba Timur to knowledgeable about the local situation. coordination has become a major challenge . should follow certain planning processes. implement national programs including the Transferring the budget to the district level Planning documents will be the main development of cotton plantations. Sumba may not necessarily be the answer as district Second, the district level is the administrative unit reference during the budgeting process. Timur is one of few areas in Indonesia governments usually have lower capacity than that implements most government activities. All Activities cannot be proposed without being that produces very fine quality of cotton. their provincial and national counterparts. spending of the national and provincial level will included in the planning document. Moreover, However, it is crucial to assess the impact of Hence, better coordination while increasing be implemented within a specific geographical learning from the lessons of the development cotton production on community livelihoods the capacity of the district government to location mostly within a district, with exception of and implementation of RAN-GRK and RAN- and the availability of water resources. provide infrastructure is important. large-scale program such as national or provincial API, it is obvious that mentioning a specific roads. Strong coordination at the district level is target in some government regulations can There is a need to increase the capacity of - create a financial incentive for district hence crucial. help governments to focus on achieving district governments in the planning and governments to implement climate actions. such targets. The public also has a strong budgeting process. The existing RPJM in Currently, there are no specific transfer Third, many of activities classified as climate actions basis to hold the government accountable in Sumba Timur and Manggarai is going to end mechanisms created for climate change. in this report are business as usual or ongoing/ achieving such targets. in 2015. Hence, strengthening the capacity When creating a transfer mechanism, it is existing programs. Despite the urgency to address of decision makers to develop good plans for crucial to ensure that district governments the issue of food insecurity, not many activities are There is, however, low capacity in planning the next cycle is crucial. SPARC could help have the flexibility to implement national specifically planned or implemented to address and budgeting at the subnational level. Several strengthening the process at the district level programs based on locally specific situations. the problem. Provincial and district governments issues that have been detected related to the to ensure climate adaptation is mainstreamed Many studies have been carried out on can focus on making several adjustments to their planning and budgeting process include: into the planning process. designing a transfer mechanism for climate existing activities/programs considering climatic mitigation, however limited research has been risks and increasing resilience, which may not be – Lack of coherence between activities and carried out on creating a transfer mechanism too costly. performance indicators or targets. For INSTITUTIONS for local governments for adaptation actions. instance, although climate change was Climate adaptation actions should focus Fourth, the assessment has been so far focused specifically mentioned in the RPJM at the 2. Better coordination and management of on making adjustments to the existing on the management of finance at different levels provincial level, the specific performance public finance across government levels development programs. This may be different of government. The important aspect of financial indicators or targets were mainly for National and provincial governments currently from one location to another. The challenge flow from the government to local communities community forests and the number of control a significant portion of spending at the faced by NTT such as erratic climate may has been largely neglected in the assessment disaster response plans and climate change district level, particularly for the development not be a major issue in other provinces in as this is outside the scope of the study. Every at the village level . Meanwhile, significant of infrastructure. The planning process for Indonesia such as Papua. Therefore, a proper

63 64 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Conclusion and Recommendations

analysis should be carried out to investigate government budget. With the limited portion this at the national scale. of international finance (less than 5 per cent to the total government budget for development), international donors or non-government EXPENDITURE organizations can focus on assessing and piloting certain interventions at a small scale. 3. Identifying climate adaptation actions based When they are proven to be effective, then the on research and science. Many of climate government can replicate the activities at the adaptation actions can be implemented larger scale. by only slightly or moderately adjusting the existing development activities taking into - Better communicate the results of research account climate risks (see Table 20). Some or studies to local governments so they can actions can be more effective for a specific be translated to government policies and locality than others as the vulnerability index programs. Many studies or research carried vary between one location to another. The out by non-government actors have not been Government should consider specific local communicated or advocated properly with the conditions when developing its plans and government. budget to adapt to climate change. Selection of adaptation should be based on science and - Develop a specific strategy and action plan, research. Therefore, the government should together with the government and CSO, in rely on research and scientific information monitoring and research activities in the area of in making decisions on how to best allocate climate change expenditures to systematically their limited financial resources to increase feed into the budgeting processes. adaptive capacity. Unfortunately, research and analysis related to climate adaptation is often 4. Measuring the effectiveness of government limited, or in the worst case, many data are cash/direct support for local communities. unavailable. Non-government institutions can Government at all levels have allocated a support the government by : certain amount of the budget for cash/direct support for local communities through grants - Developing the necessary databases for local or the social assistance budget. The provincial governments to assess the effectiveness of government has significantly increased the interventions for adapting to climate change. spending for social assistance and grants for Many studies on adaptation interventions communities from only 5 per cent in 2010 to 43 were carried out at the community level . per cent in 2012. There is however decreasing Interventions implemented by communities trend of district governments spending for are different in terms of scale or type of local communities in three districts between actions than those implemented by the 2010 and 2012. No specific information can government. The government usually focuses be obtained regarding the cash support for on infrastructure and large scale agriculture communities. This begs for further analysis support i.e. subsidized fertilizer, extension on the effectiveness of the government cash services, and others. International donors or support for local communities and how they non-government organizations can support can be modified to support climate mitigation analyses at the district government level to and adaptation objectives. develop such database. 5. Tracking and reporting climate expenditures. - Develop models of small scale interventions Assessing the effectiveness of climate that can be further replicated by the expenditure requires tracking and reporting

65 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Conclusion and Recommendations Conclusion and Recommendations

analysis should be carried out to investigate government budget. With the limited portion climate expenditures regularly. The the existing government activities; 3) develop this at the national scale. of international finance (less than 5 per cent to assessment can then assist in determining database for climate risks and possible adaptation the total government budget for development), whether the budget allocated is sufficient or interventions. The SPARC project has initiated an international donors or non-government additional resources are necessary. According analysis at the village level in the three selected EXPENDITURE organizations can focus on assessing and to Ministerial Decree 13/2006, specific budget districts. A similar exercise should ideally be piloting certain interventions at a small scale. codes for climate change have been made carried out in all villages. A database should then 3. Identifying climate adaptation actions based When they are proven to be effective, then the available under Provincial/District/Municipality be developed to store the results of the analysis, on research and science. Many of climate government can replicate the activities at the Environmental Agencies. One of the activities as well as all other findings of previous studies adaptation actions can be implemented larger scale. under the Program of Natural Resources related to climate adaptation. Local governments by only slightly or moderately adjusting the Protection and Conservation (078.xx.17) should then be encouraged to use the database for existing development activities taking into - Better communicate the results of research is: Control of Climate Change Impact (08. developing climate adaptation activities financed account climate risks (see Table 20). Some or studies to local governments so they can xx.17.05). However, the attempts to control the by the government budget. actions can be more effective for a specific be translated to government policies and impact of climate change are not only being locality than others as the vulnerability index programs. Many studies or research carried implemented by local environmental agencies. vary between one location to another. The out by non-government actors have not been As discussed in this report, more than 10 Government should consider specific local communicated or advocated properly with the agencies are involved in the implementation conditions when developing its plans and government. of climate actions in each locality. Therefore, budget to adapt to climate change. Selection to trace government expenditure on climate of adaptation should be based on science and - Develop a specific strategy and action plan, change will require all agencies to track and research. Therefore, the government should together with the government and CSO, in report their climate related expenditures. rely on research and scientific information monitoring and research activities in the area of Currently there is no mechanism allowing in making decisions on how to best allocate climate change expenditures to systematically this process to happen such as the tagging their limited financial resources to increase feed into the budgeting processes. system at the national level regulated by the adaptive capacity. Unfortunately, research and Ministerial Decree 136/2014. The Ministry analysis related to climate adaptation is often 4. Measuring the effectiveness of government of Home Affairs, together with the Ministry limited, or in the worst case, many data are cash/direct support for local communities. of Finance, can therefore create a budget unavailable. Non-government institutions can Government at all levels have allocated a tagging system for the local government, for support the government by : certain amount of the budget for cash/direct instance, by creating a thematic classification support for local communities through grants of local budget. This can be beneficial not - Developing the necessary databases for local or the social assistance budget. The provincial only for tracking climate expenditures but also governments to assess the effectiveness of government has significantly increased the other important themes such as poverty and interventions for adapting to climate change. spending for social assistance and grants for gender . Many studies on adaptation interventions communities from only 5 per cent in 2010 to 43 were carried out at the community level . per cent in 2012. There is however decreasing The proposed action plans are summarized in Interventions implemented by communities trend of district governments spending for Table 23. are different in terms of scale or type of local communities in three districts between actions than those implemented by the 2010 and 2012. No specific information can The SPARC project can assist the provincial and government. The government usually focuses be obtained regarding the cash support for district governments in a number of activities on infrastructure and large scale agriculture communities. This begs for further analysis suggested in Table 23. They include: 1) assisting support i.e. subsidized fertilizer, extension on the effectiveness of the government cash provincial and district government in the budgeting services, and others. International donors or support for local communities and how they and planning processes so that they have capacity non-government organizations can support can be modified to support climate mitigation in developing climate adaptation actions in the analyses at the district government level to and adaptation objectives. planning and budget documents; 2) identify quick develop such database. win adaptation strategies and adjust the existing 5. Tracking and reporting climate expenditures. programs considering the climatic risks in NTT. - Develop models of small scale interventions Assessing the effectiveness of climate Table 22 listed several adjustments that can be that can be further replicated by the expenditure requires tracking and reporting pursued to mainstream climate adaptation into

65 66 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Table 22 Action Plan Long Lead Institution Short Mid Beyond 2015-16 2015-20 2020

2015-16 Mid Mid National Level 1. Coordinate better national spending at the Min. Home Affairs, Finance & relevant provincial and district levels (Deconcentrated technical ministries activities and Tugas Pembantuan) 2. Increase the capacity of provincial/district Min. Home Affairs, Finance & relevant governments in planning, budgeting and service technical ministries delivery 3. Identify appropriate fiscal incentive to finance Ministry of Finance with relevant technical climate actions at the provincial/district levels ministry 4. Create a tagging system for tracking and reporting Ministry of Home Affairs and Finance climate expenditures at the subnational level 5. Provide technical guidance on climate adaptation Ministry of Environment and Forestry with for provincial and district governments Ministry of Home Affairs and Ministry Finance

Provincial/District Level 5. Include clear climate targets in the planning and Planning Agency (Bappeda) with Local budgeting documents Secretary 6. Identify quick win adaptation strategies and adjust Planning Agency (Bappeda) and relevant the existing development programs technical agencies 7. Develop database for climate risks and possible Planning Agency (Bappeda) and relevant adaptation interventions technical agencies National and Provincial/District Level 8. Identify effective government cash/direct support for Ministry of Finance local communities Non Government Institutions 9. Focus on developing models of effective Relevant donor agencies, NGOs and climate adaptation interventions to be further Universities replicated by government 10. Better communicate the results of research Relevant donor agencies, NGOs and or studies to local governments so they can be Universities translated to government policies and programs

67 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

Table 22 Action Plan Long Lead Institution Short Mid Beyond 2015-16 2015-20 2020

67 68 Provincial Climate Public Expenditure and Institutional Review, East Nusa Tenggara of Indonesia

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Ministry of Finance Republic of Indonesia Provincial Climate Public Expenditure and Institutional Review (CPEIR) East Nusa Tenggara of Indonesia

UNE P

Center for Climate Finance and Multilateral Policy Fiscal Policy Agency Ministry of Finance, Republic of Indonesia December 2015