Conditions of the Carrying Capacity of the Environment and Natural Resources
B. Forest Cover on Peatlands
Besides being rich in biodiversity and having an important hydrological function, which is especially important when regulating the water system in their surrounding areas, the peat ecosystem also contains remarkably high carbon reserves. Hence, integrated efforts are needed to conserve and restore peatlands.
Peatlands currently continue to experience disturbances, especially from peatland drainage, deforestation, and wildfires that potentially increase greenhouse gas (GHG) emissions and disrupt the functions within the ecosystem. The forest cover area, which includes both primary and secondary forests located on peatlands, tends to decrease, indicating the extent of damage to peatlands from year to year (see Table 1.4).
The total area of peatlands that has been restored in licensed cultivation areas
and/or concessions (Cultivation Rights and Business Permits for the Utilization of Forest Products) has only reached 143,448 ha from the target of 1,784,353 ha for 2020 (8%); while the area of peatlands that has been successfully restored in non-permit areas has only reached 682,694 ha from the target of 892,248 ha for 2020 (77%). If there is no improvement to these policies, then it is feared that peatland recovery and restoration targets cannot be achieved optimally.
For future development plans, the total area of forest cover on peatlands needs to be maintained at a minimum of 9.2 million ha, as was the case in 2000.
Hence, during the 2020-2024 RPJMN period, at least an additional 1.5-2 million ha of restored peatlands will be required.
For this reason, peatland restoration efforts that have been carried out intensively since 2015 need to remain a priority in the 2020-2024 RPJMN.
Table 1.4
Changes in Area of Forest Cover on Peatlands Island Regions Peatland Area (in
ha)
Extent of Forest Cover on Peatlands
2000 2015
in ha % in ha %
Sumatra 4,120,325 1,789,500 43.43 837,675 20.33
Kalimantan 4,694,625 2,545,300 54.22 1,891,800 39.87
Papua 6,376,975 4,896,300 76.78 4,817,275 75.54
Total National 15,191,925 9,231,100 60.76 7,526,750 49.54
Source: Bappenas, 2019.
C. Habitat of Key Species
Indonesia has a rich biodiversity and specific ecosystem characteristics with a high level of species endemicity in each island region. Some endemic species found in Indonesia include the Komodo dragon (Varanus komodoensis), orangutan (Pongo spp.), bird-of-paradise (Paradisaea ssp.), Javan rhinoceros (Rhinoceros sondaicus), maleo (Macrocephalon maleo), and anoa (Bubalus spp.).
A limiting factor that must be considered as a major concern when planning for development in Indonesia is the habitat of key species. These key species are plants or animals that are prioritized for protection as they represent the overall biodiversity in their ecosystem. The loss of these key species will result in the disruption to the sustainability of the structure, function, and productivity of the habitat and/or ecosystem.
There are nine key species that have become limiting factors in the analysis of the environmental carrying capacity, namely the babirusa, anoa, Javan rhinoceros, Javan gibbon, Bornean elephant, Bornean orangutan, Sumatran orangutan, Sumatran elephant, and Sumatran tiger. The habitats of these key species are projected to significantly decline due to the reduction in forest cover, thus making the species more vulnerable (Figure 1.14).
Analysis shows that forest cover in key habitat areas to the west of the Wallace Line will shrink from 80.3% in 2000 to 49.7% in 2045, especially in Sumatra and Kalimantan. Meanwhile, key biodiversity areas to the east of the Weber Line, especially in the island regions of Maluku and Papua, are also expected to decrease significantly due to massive development.
Figure 1.14
Projected Decline in Forest Cover Within the Habitat of Key Species in 2000-2045
Source: Bappenas, 2019
As the islands of Sumatra and Kalimantan experience the largest decline in the habitat area of these vulnerable and endangered key species, any form of development in those regions must consider the sustainability of these habitats.
According to a number of analyses, the minimum area of key species’ habitat—
especially to the west of the Weber Line—
that must be maintained at the national level is 43.2 million ha. If the habitat area of these key species cannot be maintained, it is feared that the ecological will be severely disrupted, which can present a major challenge in the field of sustainable development in Indonesia.
D. Area of Settlements in Coastal Regions Affected by Climate Change The coastal slope is a major parameter in
determining the level of vulnerability in coastal areas. Highly vulnerable coastal areas are areas prone to abrasion, especially low sloping beaches; whereas coastal areas with a low level of vulnerability are areas that are safe from the dangers of abrasion, for example steep sloping beaches.
Compared with the sea level in 2000, the sea level in 2040 is projected to rise up to 50 cm due to climate change. The resulting rise in wave heights will precipitate changes to the coastal slope, to the coastal environment due to flooding, and to the coastal sediment supply. Hence, the area of coastal settlements that are prone to abrasion and/or accretion due to changes in the
sea level is expected to increase to over 18,480 km2 by 2045.
Based on the analytical results obtained from the Strategic Environmental Assessment (or KLHS), it is known that:
settlements along the 11 km coastline are currently affected by abrasion, settlements along the 253 km coastline are potentially affected by abrasion, and settlements along the 155 km coastline need to prepare for the impact of abrasion. The sea level has become a limiting factor for development because rising sea levels will continue to threaten existing settlements and other infrastructure and/or facilities until they cannot be utilized optimally. In addition, climate change has an impact on wave heights that affect fishing patterns and the fishermen themselves (Bappenas, 2018).
E. Disaster-Prone Areas
Geographically, Indonesia is a country that is prone to natural disasters. Most of Indonesia's territory is located above major earthquake-producing stresses, along the subduction-zone megathrust fault and other active faults that not only have the potential to cause damage to
infrastructure and basic connectivity, but also cause a huge loss of life.
Disaster-prone areas must be considered as a limitation when planning for development. Therefore, zones with a high disaster risk need to be prioritized as protected areas during spatial planning,
rather than used as utilization areas. If their use as utilization areas cannot be avoided, then these zones need to be
supported by adaptation efforts and disaster risk mitigation in order to reduce potential losses.
F. Water Availability
Damage to forest cover is expected to trigger raw water scarcity, especially in island regions that have exceptionally low forest cover such as Java, Bali, and Nusa Tenggara. Raw water scarcity has also begun to occur in several other regions due to the impact of global climate change, which is currently affecting most of Indonesia.
Currently, the availability of water has been classified as scarce to critical in most areas of Java and Bali. It is estimated that areas with critical levels of water supply have increased from 6% in 2000 to 9.6% by 2045, covering the
regions of southern Sumatra, West Nusa Tenggara, and southern Sulawesi.
For water scarcity to not hamper development, the minimum area with safe water supply that needs to be maintained at the national level is 175.5 million ha (93% of the total area of Indonesia);
meanwhile, the availability of water in each island region must be maintained above 1,000 m3/capita/year. For the island of Java specifically, given that the threat of the water crisis is very worrying, the proportion of areas with safe water supply needs to be significantly increased.
G. Energy Availability
The challenge in meeting future energy needs is expected to be even greater.
Reserves of fossil energy sources (non- renewable) such as oil and natural gas are running low, while the development of renewable energy sources is still not significant enough to be able to meet domestic energy demand.
Domestic energy supply in 2018 was only able to meet around 75% of the national energy demand and is expected to decline to 28% by 2045. The reduced capacity of domestic energy production is expected to affect the balance between national energy supply and demand in the future.
In order to meet the national energy needs, by 2024, the portion of new and
renewable energy must be increased to 23% of the national energy mix. In addition, efforts to find new energy sources are needed to anticipate the decline in fossil energy resources in the future.
The limited carrying capacity of natural resources and the degradation of the environment are real challenges that can hinder the achievement of development targets. Holistic and integrated efforts from various sectors are needed to overcome these challenges.
Development planning needs to consider the balance between the use of natural resources and the achievement of development targets, while also paying attention to the spatial function and spatial structure in regional development.
Fiscal Capacity and Development Funding
In accordance with the 2005-2025 RPJPN, the medium-term development objective for 2020-2024 is to realize an independent, developed, just, and prosperous society through accelerated development in various fields by emphasizing the establishment of a solid economic structure based on competitive advantage in various regions of Indonesia, supported by quality and competitive human resources.
These targets can be achieved through high-quality public investment, particularly investment that: 1) is well- targeted and on schedule; 2) has a positive impact that is both significant and sustainable; 3) consistent with the direction of policies, programs, and development plans; and 4) makes efficient use of resources and funding.
In the last five years, Indonesia's tax revenue to GDP (or tax ratio) has been low, even lower than the tax ratio of countries with similar income. The main underlying problem with the low tax ratio is the country’s ineffective tax policy that has not realized a system that is able to optimally mobilize tax revenue. In addition, the current state of the tax administration, individual compliance with tax obligations, and the role of tax organizations also have an effect on the already inefficient tax system. These various tax problems lead to limited fiscal space to fund development needs.
With limited fiscal capacity to finance large and increasingly diverse
development needs, a funding strategy is needed to optimize the utilization of all available funding capacities to achieve development goals.
Funding for development is prioritized for meeting the basic needs of citizens by implementing minimum service standards and boosting investment that provides high leverage for national development. The participation of various stakeholders is encouraged and synergized to strengthen the utilization of development funding. The central and regional governments are directed toward providing basic services to citizens, while business entities, both BUMN and private, are focused on strengthening economic growth and achieving development targets.
To optimize the utilization of funding, it is necessary to integrate development funding from government sources that include ministries/institutions, non- ministries/institutions, regional transfers and village funds; from BUMN; from the collaboration between the government and business entities; and from the collaboration with the public sector in which the collaboration is in line with the
“Money Follows” principle. In addition, the government needs to encourage more funding from sources that come from both the public and private sector through innovative financing schemes, including government-to-business cooperation schemes, among others.