Month: March 2014

Indonesia, Malaysia, Philippines, Papua New Guinea, Timor Leste and Solomon Islands, which are located in South-east Asia, formed the coral-triangle. Those countries are home of nearly 600 different species of reef-building corals and also more than 2000 species of reef fish. They are considered as a place with the most diverse marine habitats globally (WWF, 2014).

Indonesia, being an archipelagic country, consists of 17,508 islands scattered around the equator. It is a maritime continent with 2.7 million km² of territorial waters and 3.1 million km² of EEZ. Fisheries accounts for 2.4% of Indonesia’s GDP where in 2004, around $1.6 billion worth of fish was exported. Fisheries sector helps to increase export and foreign exchange earnings provide employment opportunities to roughly 6 million people, be a source of income for fishermen and the government and also improve the nutritional standard of the nation (FAO, 2000).

In 2013, O’Malley, Lee-Brooks and Medd published an article outlining the importance conserving Manta Ray due to the fact that it is considered as unsustainable fisheries resources, meaning that Manta Ray will not be able to recover its population number when the amount is depleted. The paper estimated that by turning Manta fisheries into Manta watching tourism, it will generate $73 million and $140 million annually for dive operators and the government respectively. Influenced by the result of this paper, on February 21^st, 2014, Indonesia announced that within the country, Manta Ray will be protected from fishing and export, turning Indonesia as the world’s second largest sanctuary for the species (Mason, 2014).

O’Malley, Lee-Brooks and Medd (2013) stated that a Manta Ray is worth up to $1 million being alive due to its attractiveness to tourists who want to have the chance to swim alongside the gentle beast, however, it is worth only $40 to maximum $500 dead. Total annual income from Manta tourism contributes $15 million to Indonesian economy annually, while the fisheries only resulted $442 thousand (Catalyzing Change, 2014). The problem now is how to enforce the regulation properly as there is a risk of poaching. After the regulation was passed on 27 January, international NGOs and conservational groups are working to spread the word on how valuable a Manta Ray is alive than dead with the assistance of business people, military, water police and local officials. Sudirman Saad claimed that there would be more than 200 special policemen to guard the conservation area, mainly around the key population found in Bali, Flores and Raja Ampat, and enforce the law as well as government encouragement to local fishermen being affected by the ban to take advantage of the tourism (Mason, 2014).

Manta Ray conservation is not the first fishing ban the government announced. In 2007, Susilo Bambang Yudhoyono, Indonesia’s current president asked the leaders of other coral-triangle countries to form a join regional conservation initiative which then was agreed two years later to establish Marine Protected Areas (MPA). This was also supported financially by American and Australian governments as well as many multilateral donors, such as Asian Development Bank. The Indonesia’s MPA covers about 16 million hectares and projected to increase to 20 million (about 10% of its total water) by 2020, covering a wide range of coastal and marine ecosystems. If this does come true, it will be a big achievement in reaching towards the goal of protecting 30% of world’s oceans to prevent the collapse in fisheries. As good as it sounds, the Indonesia’s MPAs are not properly enforced. A study done by World Resources Institute found that out of 170 MPAs, only 3 that are rated as effective in Indonesia. This is caused by flawed designs with too few restrictions on fisheries causing holes in the system itself and the fact that most MPAs are far inland and with the widespread of deforestation of watersheds, it increases the run-off of sediments and nutrients inhibiting coral growth or making them overgrown with algae making them more vulnerable to ocean acidification and coral bleaching (Anonym, 2013).

Manta Ray ban will undeniably increase overall welfare if the local fishermen that originally have their life depend on it are able to find other source of income. The problem is, usually, they don’t have any other options besides fishing Manta Ray and that the fish is also their source of protein. Without government support, it will be difficult to persuade the fishermen to deviate from fishing Manta Ray. Moreover, with the existence of the ban, there will be a shortage in supply and thus with a fixed demand, price is expected to increase creating an incentive for fishermen to poach. Although it was mentioned by Mason (2014) that there will be around 200 special policemen to monitor and enforce the regulation, however, anonym (2013) found that in Alor, which is one of the MPAs in Indonesia, the coastal police force only has two speedboats and one of them is broken.

By implementing Manta Ray fishing ban, Indonesia became the second largest Manta Ray conservation that attracts tourists from around the world. It has now become the top three in the list of Manta Ray tourism spot. Establishing a conservation area will bring huge revenue for not only the people working in the tourism industry, but also the government. However, considering the previous experience of MPAs, the enforcement and thus the benefit of the ban is still in question. How well the fishermen are able to find other source of income and protein is also a problem that needs to be addressed. Hopefully, what the government promised will be fulfilled and thus ensure that everyone is better off. For now, let’s wait and see how well the government manages to design and implement the system.

References

Anonym. 2013. “Plenty More Fish in the Sea?,” The Economist Online. Home page Online. Available from http://www.economist.com/news/asia/21591905-government-tries-preserve-fecund-part-coral-triangle-plenty-more-fish-sea Internet; accessed 21 March 2014.

Catalyzing Change. 2014. “Indonesia Announces World’s Largest Sanctuary for Manta Rays,” Catalyzing Change Online. Home page Online. Available from http://www.catalyzingchange.org/indonesia-announces-worlds-largest-sanctuary-manta-rays/ Internet; accessed 21 March 2014.

Food and Agriculture Organization. 2000. “Information of Fisheries Management in the Republic of Indonesia,” Food and Agriculture Organization of the United Nations Online. Home page online. Available from http://www.fao.org/fi/oldsite/FCP/en/IDN/body.htm Internet; accessed 21 March 2014.

Mason, Margie. 2014. “Indonesia Becomes World’s Largest Sanctuary for Manta Rays,” CTV News Online. Home page online. Available from http://www.ctvnews.ca/sci-tech/indonesia-becomes-world-s-largest-sanctuary-for-manta-rays-1.1697169 Internet; accessed 21 March 2014.

O’Malley, Mary P., Katie Lee-Brooks and Hannah B. Medd. The Global Economic Impact of Manta Ray Watching Tourism. PLoS ONE 8 (2013): e65051.

World Wild Life. 2014. “Coral Triangle,” World Wild Life Online. Home page online. Available from http://worldwildlife.org/places/coral-triangle Internet; accessed 21 March 2014.

Climate change is an imminent danger that everyone is facing. One of the main causes is the green house gas (GHG) emission. According to PEACE (2007), in 2005, Indonesia is in the top 3 of world’s GHG emission excluding EU (by including EU, Indonesia is 4^th). In 2008, Sri Mulyani, Indonesia’s financial minister, commissioned Green Paper written with the help of AusAID and Australian Treasury aiming to reduce emissions by 26% with business as usual up to 41% if there is international support by 2020 (Arup, 2009). In the Copenhagen meeting, current president Susilo Bambang Yudhoyono introduced a proposal of carbon tax for 2014 that will impose IDR 80,000 (equivalent to about USD 8) per tonne CO₂ and will increase by 5% annually until 2020. With this carbon tax applied, the government is expecting to gain IDR 95 trillion (equivalent to about USD 10 billion) in revenue (Wardhana, no year). The main source of the emission in Indonesia comes from deforestation and land conversion, while emission from agriculture and waster are small. Emission from energy sector is also small, however, it is growing exponentially (PEACE, 2007). The Green Paper outline the strategies that Indonesian government is going to do in energy, land-use change and forestry, international carbon finance and institutional development sector. However, it points out that energy sector is a concern as there is a growing demand by 7% annually (Ministry of Finance, 2009). Therefore, this review will focus more on the policy in energy sector.

There are two ways that the government can implement in order to reduce emission in energy sector, which are carbon tax and emission trading. The advantages and disadvantages of each method are listed in Table 1.

Table 1. Advantages and Disadvantages of Carbon Tax and Emission Trading

            Source: Ministry of Finance (2009)

The emission from energy sector has been increasing due to the growing Indonesian economy and the fact that the reliance of using coal to generate energy because by using coal, not only that there is a the belief that it is the cheapest source of electricity, but also it will help to reduce the reliance to oil imports. Moreover, government is also sending a signal to strengthen the belief by giving energy subsidy making the producer to bear no cost to emit GHG. Thus, the most efficient way to solve this is to stop the subsidy and introduce price to emission. By introducing a price for emission, it will be reflected in the price of the final goods causing users to substitute with lower priced products creating an incentive for the company to reduce emission. In the long run, after introducing a moderate carbon tax and when carbon measurements and accounting system are already capable to support emission pricing beyond fossil fuel combustion, carbon tax can be replaced by cap and trade, allowing a more cost efficient way to abate emission. By introducing USD 8 tax, it is expected to reduce emission by 10% by 2020 and that the revenue generated will be used to help the poor to survive the price reform as prices will definitely go up and they won’t be able to afford as much stuff as before. However, this USD 8 carbon tax is lower than international carbon tax, meaning that the government will not be able to utilize the abatement opportunities to the fullest, thus, the Green Paper propose to move away slowly from tax to emission trading with linkage to international market (Ministry of Finance, 2009).

Carbon tax has several advantages, such as increasing government revenue (increase GDP) and giving incentive to companies to innovate to reduce emission. As stated in the green paper developed by the ministry of finance with Australia, the revenue will then be used to help the poor families to adapt to increase in prices as carbon tax means an extra cost in production which will be transferred to consumers. It is also supported by the paper written by Yusuf and Resosudarmo (2008) stating that the implementation is not necessarily regressive due to structural change and resource allocation. The key here is structural change, which can be very ambiguous in developing countries like Indonesia due to the high level of corruption and low level of enforcement. If there is no improvement on the structural change, the probability of the fund to be received by the lower income households and those living in rural areas are very low. Moreover, people living in provinces that located further away from the capital city are the one that should be considered to receive higher allocation of the tax revenue, as they have to pay ten folds to purchase the same goods, but this is highly unlikely due to the loose central government supervision in those areas.

Reducing GHG emission in developing countries such as Indonesia will impose a greater good for the world. Introducing carbon tax will also help to increase the country’s GDP through tax revenue. Although it seems to be a good solution for both the countries and the world, the implementation should be considered carefully as the citizens might be the one to suffer the most without the support from the government.

REFERENCES

Arup, Tom. 2009. “Indonesia Plans Carbon Tax, Geothermal Push,” The Sydney Morning Herald Online. Home page online. Available from http://www.smh.com.au/national/indonesia-plans-carbon-tax-geothermal-push-20091207-kfcl.html Internet; accessed 10 March 2014.

Ministry of Finance. 2009. “Ministry of Finance Green Paper: Economic and Fiscal Policy Strategies for Climate Change Mitigation in Indonesia, Ministry of Finance and Australia Indonesia Partnership,” Illegal Logging Portal Online. Home page online. Available from http://www.illegal-logging.info/sites/default/files/uploads/IndonesiasiaranpdfGreenPaperFinal.pdf Internet; accessed 10 March 2014.

PEACE. 2007. “Indonesia and Climate Change: Current Status and Policy,” World Bank Group Online. Home page Online. Available from http://siteresources.worldbank.org/INTINDONESIA/Resources/Environment/ClimateChange_Full_EN.pdf Internet; accessed 10 March 2014.

Wardhana, Irwanda Wisnu. “A Policy Paper: Supporting Indonesia’s Carbon Tax Proposal,” Badan Kebijakan Fiskal Online. Home page online. Available from http://www.fiskal.depkeu.go.id/webbkf/kajian%5CSupporting%20Indonesia_s%20Carbon%20Tax.pdf Internet; accessed 10 March 2014.

Yusuf, Arief A. and Budy P. Resosudarmo. “The Distributional Impact of Environmental Policy: The Case of Carbon Tax and Energy Pricing Reform in Indonesia,” University of Tasmania Online. Home page online. Available from http://www.utas.edu.au/__data/assets/pdf_file/0011/407459/20130830_Resosudarmo_1.pdf Internet; accessed 10 March 2014.