Memo from Jakarta: can Indonesia deliver?

We’re not here to rubbish economics,” said Ranjit Barthakur, an advisor for Tata Consulting Services.

Behind this observation was the bigger issue - getting people and businesses to  understand that environmental preservation doesn’t need to hurt bottom lines.   This was a central theme that emerged at the Business for Environment summit held in Jakarta this week, organised by the Singapore-based Global Initiatives in partnership with the Indonesian government.

On Thursday and Friday, more than 700 business leaders, NGOs, international agencies and government officials gathered in the Indonesian capital to discuss sustainable growth strategies for sectors ranging from forestry to mining to consumer goods to water.

They shared slogans – “green for green” – and mantras – “pro-poor, pro-growth, pro-job and pro-business” – that showed they understood a balance was needed between development and environmental sustainability.

But that requires putting an economic value on nature, said participants at the closing of the two-day summit. “People have to see the benefits,” noted Carrie Freeman, director of sustainability and business innovation at Intel.

For the government of Indonesia, the hope is to cut its greenhouse gas emissions by 26 per cent by 2020, while also achieving 7 per cent economic growth. Non-governmental organisations, such as the World Wide Fund for Nature (WWF), aim to help the forests, while international financing mechanisms like the World Bank want to invest in innovative projects focused on climate change mitigation.

Given Indonesia’s prominence in coal, palm oil and timber, many of the biggest discussions at that summit focused on forestry, mining and the potential for renewable energy. But smaller discussions also touched on issues surrounding water, supply chains, transport and green building.

Participants talked often of the three “I’s” – innovation, imagination and investment.

“We need solutions that will transform the way we live, produce, consume, work, travel and play,” said President Susilo Bambang Yudhoyono on Thursday. “We need solutions that will place the environment and climate security at the heart of every public and corporate policy. We need solutions that will make economic growth and technology not the nemesis but the ally of our climate stability. And we need solutions that will serve the practical needs to slow, stop and reserve the process of climate change.”

Mr Yudhoyono said businesses were necessary to help Indonesia achieve its targets, and he promised to make the more than 30 million hectares of degraded land available to industries willing to invest in the growth of the country.

But some officials and environmentalists say they are skeptical of the president’s commitment. They say additional incentives are needed to ensure investors use the land in an efficient, sustainable way.

“The president is serious about making sure that there is a better utilisation of the degraded land, but I think we’ve also got to be serious and proactive about the use of incentives and disincentives,” said Gita Wijawan, head of Indonesia’s Investment Coordinating Board.

To ensure that companies are making the best use of their investments requires both carrots and sticks. Dorjee Sun from Carbon Conservation noted that an oil company is not going to bother learning how to manage a local neighborhood if it’s not in its bottom line. Innovation and the use of new technology is key to creating more value. But so is engagement with local communities and decision makers.

Delegates to the summit say it draws new attention to a country at the heart of debates about climate change and sustainable development. Indonesia has the world’s third-largest tropical rainforest, but deforestation is largely to blame for its high rate of greenhouse gas emissions.

One official challenged participants to return to the B4E summit in 2013 to see if Indonesia has delivered on its promise to green more businesses. And many of those in the audience nodded their heads and said they would be watching.’s coverage of the B4E Global Summit 2011 is brought to you by City Developments Ltd (CDL).

Click here to read all stories from the B4E Global Summit 2011.

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