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Cablegate: Indonesia at the Major Economies Meeting

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DE RUEHJA #2683/01 2640910
ZNR UUUUU ZZH
O 210910Z SEP 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6394
RHEHNSC/NSC WASHDC PRIORITY
RUEHBS/USEU BRUSSELS
RUCNDT/USMISSION USUN NEW YORK 0683

UNCLAS JAKARTA 002683

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EAP/MTS AND EAP/RSP
DEPT FOR OES/IET AND OES/ETC
NSC FOR CEQ CONNAUGHTON, VAN DYKE

E.O. 12958: N/A
TAGS: ENRG SENV KGHG ECON PREL ID
SUBJECT: INDONESIA AT THE MAJOR ECONOMIES MEETING

1. (SBU) Summary and Introduction: Indonesia wants the Major
Economies Meeting to increase prospects for the success of the 13th
UNFCCC Conference of the Parties (COP 13) in Bali in December. The
GOI will be sensitive to any negative portrayal of Indonesia,
whether as a destroyer of forests or as one of the largest emitter
of greenhouse gases. GOI officials have generally given the MEM the
benefit of the doubt; they view it as a "confidence building
measure" on the road to COP 13, a "political building block" for a
successful outcome to Bali. The composition of Indonesia's
delegation to the MEM shows that they see themselves participating
wearing two hats: as a major greenhouse gas emitter as well as host
to COP 13.

2. (SBU) GOI officials emphasize the urgency of addressing climate
change with immediate and concrete steps. They also emphasize that
Indonesia and other developing countries must balance economic
development with environmental concerns. Indonesia has particular
interest in seeking financial mechanisms (such as carbon trading) to
protect rainforests and expanding biofuels. The GOI delegation will
therefore be most engaged on discussion of land use/forestry as well
as cleaner power generation and fuel technologies, including
financing and technology transfer for developing countries. They
will also be interested in adaptation funds for protecting coral
reefs and coastal communities that depend on reef ecosystems. End
summary and introduction.

Wearing Two Hats: The Indonesian MEM Delegation
--------------------------------------------- --

3. (SBU) Indonesia's delegation to the MEM reflects its two separate
but related roles: as a major GHG emitter as well as host to COP 13.
Minister of Environment Rachmat Witoelar and Presidential Advisor
Dr. Emil Salim will wear the host-to-COP 13 hat, while a more
technical group led by Minister of Energy and Mineral Resources
Purnomo Yusgiatoro will represent Indonesia as major economy and GHG
emitter. The group under Minister Purnomo may include (as of
September 20, this was still unclear):

-- Dr. Nenny Sri Utami, Head of Energy Resources Research and
Development Agency, Ministry of Energy and Mineral Resources;
-- Ms. Masnellyarti Hilman, Deputy Minister of Environment for
Nature Conservation Enhancement and Environmental Degradation
Control;
-- Dr. Yetty Rusli, Head of Forest Planning Agency (BAPLAN) OR Mr.
Wahyudi Wardoyo, Head of Forestry Research and Planning Agency
(BALITBANG), Ministry of Forestry; and
-- Mr. Salman Al-Farisi, Director for Development, Economic and
Environmental Affairs (instead of Reslan Izhar Jenie, Director
General for Multilateral, Financial and Development Affairs,
Ministry of Foreign Affairs).

MEM: A Good Sign, but It WILL Tie into COP 13, Right?
--------------------------------------------- --------

4. (SBU) High-level USG statements and conversations between GOI
officials and USG officials have significantly allayed concerns that
the MEM process will be separate from and somehow undermine COP 13.
GOI officials, however, will seek continued assurances that the MEM
process will dovetail into the UNFCCC process and contribute to a
successful COP 13. Minister Witoelar and others welcome the MEM to
the extent that it provides an opportunity for serious dialogue
among major countries that could lay the basis for consensus on some
climate change issues by December. Witoelar has expressed hope that
this initiative might help pressure Russia, China, and India to
engage constructively at COP 13.

Third Largest Emitter? That's Your Opinion
-------------------------------------------

5. (SBU) With the world focused on Indonesia as host to COP 13, the
GOI is sensitive to claims that Indonesia is the third largest
emitter of greenhouse gases, mainly from deforestation and land use
change. While acknowledging that Indonesia is a large emitter, both
Minister Witoelar and Dr. Salim have publicly questioned the
accuracy of this statistic and say that there are reports that show
otherwise. At the MEM and other climate change fora, the GOI would
prefer for other countries to regard it primarily in its role as COP
13 host, not as a top-five GHG emitter. Ministry of Foreign Affairs
officials have echoed this line.

Wait and See: From the MEM to Pre-COP Ministerial
--------------------------------------------- ----

6. (SBU) The GOI's four main COP 13 agenda items will determine its
positions and interests at the MEM: a post-2012 mitigation strategy;
an adaptation funding mechanism; reducing emissions from
deforestation and degradation; and technology transfer. The GOI
understands that successful outcomes in each of these areas depends
largely on the success of upcoming meetings, including the September
24 U.N. discussions, the MEM, and October 24-25 pre-COP ministerial
in Bogor. For this reason, the GOI will wait until early October to
finalize a discussion non-paper on these items for the pre-COP
ministerial. Indonesia hopes that the U.N. meetings and the MEM
will facilitate movement towards consensus on these issues among
both developed and developing countries.

Your Money, Our Forests: Avoided Deforestation and the F8 (Forestry
Eight)
--------------------------------------------- ----------

7. (SBU) The GOI wants the rest of the world to pay countries like
Indonesia to preserve its rich tropical forests. It will focus on
what the MEM has to say about land use and forestry. GOI officials
are focusing on "carbon credits for not cutting down trees", or any
other mechanism that assigns their standing forests financial value.
President Yudhoyono's recently proposed "Forestry Eight" group of
countries with significant rainforests (the GOI claims that the
group now includes up to 20 countries) would focus on preparing a
common position on economic incentives for reduced emissions from
deforestation and degradation (REDD), via "avoided deforestation".
Indonesia wants to develop this common position to increase their
bargaining position at COP 13. Although Minister Witoelar has
publicly stated that "We're all in agreement now for the first
time", it is unclear whether the GOI has gotten buy-in from all
these countries. The group's first meeting will take place on the
sidelines of the U.N. annual plenary session in New York on
September 24.

Financing Mitigation, Adaptation, and Clean Technology
--------------------------------------------- ---------

8. (SBU) The GOI has repeatedly emphasized that it wants to balance
its economic development with environmental concerns. Therefore, in
addition to financial mechanisms to protect rainforests, the GOI has
particular interest in low-cost financing of clean technologies.
The GOI wants to pursue cleaner power generation and fuel
technologies. It will be very interested in discussions about
affordable technology transfer.

9. (SBU) The Indonesians will raise not only financing for
technology transfer, but also financing for climate change
mitigation and adaptation. The Indonesian REDD proposal developed
by the GOI and the World Bank is the most advanced REDD country
proposal at this time. The Forest Carbon Partnership Facility
(FCPF) is one REDD instrument that the World Bank wants to launch at
COP 13. However, Indonesia would prefer to work climate change
activities through a multi-donor fund such as the World
Bank-proposed Indonesia Climate and Resource Use Sustainability
(ICARUS) Fund, over which it could have more management control.

Coral Reefs and the Coral Triangle Initiative
---------------------------------------------

10. (SBU) President SBY discussed U.S. support for a new
multilateral partnership called the Coral Triangle Initiative (CTI)
with President Bush at the APEC Summit. Dr. Salim and several
ministers have also raised the Coral Triangle Initiative (and the
importance of preserving the coral reefs as carbon sinks) in
conversations and public statements. The GOI delegation may suggest
that any incentives for avoided deforestation also include coral
reef conservation, or that adaptation funds also target reef
ecosystems and their dependent coastal communities.


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