This report is part of the project “Strengthen national climate policy implementation: Comparative empirical learning & creating linkage to climate finance (SNAPFI), see www.diw.de/snapfi. The project is part of the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU) support this initiative on the basis of a decision adopted by the German Bundestag. More information on IKI can be found at www.international-climate-initiative.com.

The report Climate Finance and Support to National Climate Policy Processes in Emerging Markets explores how international climate finance can strengthen national climate policy processes in developing countries through empirical case studies. Developed as part of the SNAPFI project, it highlights the interactions between international donors and domestic actors in driving transformational change toward low-carbon development. By examining financing instruments, institutional approaches, and implementation modalities, the report provides insights into the effectiveness, challenges, and opportunities of aligning international support with national priorities and policy frameworks. Its findings are intended for policymakers, development practitioners, and donor communities working at the intersection of climate finance and sustainable development.

The Cross-country Study of Indonesia Green Sukuk and REDD+ examines two different climate finance approaches—Green Sukuk and REDD+—as strategic instruments to support Indonesia’s national climate policies and achieve its greenhouse gas emission reduction targets (NDC). Green Sukuk, introduced by the Indonesian government in 2018 as a market-based sharia financing initiative, is used to fund green projects such as renewable energy and environmentally friendly infrastructure, with transparent mechanisms through Climate Budget Tagging. Meanwhile, REDD+ represents a donor-driven, result-based payment scheme focused on reducing emissions from deforestation and forest degradation, supported through bilateral cooperation with Norway. The study highlights how both instruments contribute to policy transformation, financing governance, and sustainable development, while also illustrating the dynamics of interaction between national and international actors in designing and implementing effective and sustainable climate finance in Indonesia

The report Transformational Change Towards Low-Carbon Development in Emerging Economies is a cross-country study under the SNAPFI project, supported by the International Climate Initiative (IKI) and DIW Berlin. Published in July 2020, it analyzes twelve case studies from developing countries to understand how international climate finance (ICF) can drive transformational change toward low-carbon development. The study highlights the importance of aligning ICF with national policies, identifying specific domestic support needs, fostering institutional innovation, encouraging stakeholder participation, and implementing adaptive modalities. Using an empirical approach, the report offers strategic insights for policymakers, donors, and development practitioners to design impactful and sustainable climate interventions.

Abstract

The spatial planning in Indonesia has been based on the concept of sustainable development, however, the process is considered insufficient to deal with the current dynamic changes and future uncertainty due to global economic pressure. In order to cope with such complex challenges there is an urgent need to prepare resilient spatial plans in responding to major continuous change. The framework of social-ecological systems was used to identify the dynamic interactions between the ecological and social components of the problem of land-use conversion in the Northern Bandung Area. Using a system dynamics model, this research found that the root of such complex problem is the continuous transfer of land ownership. The study ran simulations by applying economic incentives (EIs) in an effort to control land ownership transfer. The simulations show that implementing high effort EIs can decrease the rate of conversion into built-up areas and the degradation of carrying capacity.

Keywords economic incentive, land use, Northern Bandung area, NBA, spatial plan, social-ecological system, SES, system dynamics, resilience

Spatial planning is expected to facilitate climate change adaptation by directing future spatial and infrastructure developments away from zones that are exposed to climate-related hazards. This study attempts to confirm this understanding by mapping the effects of the various spatial plans on the northern coast of Java, Indonesia. First, the study maps the extent of coastal hazards for the baseline year of 2010 using a GIS-based inundation model. An overlay in GIS demonstrates the influence of spatial plans for the projection year of 2030. This allows for calculating the economic losses of the planned developments. The case study shows that the current provincial spatial plans direct land use conversions along the northern coast of Java to continue to occur in the future. This could significantly decrease the regional capacity in dealing with the exposure to coastal inundation. The analysis also demonstrates that a total area of 55,220 ha of land prone to inundation, consisting of protected area (1488 ha), fishponds (32,916 ha) and agricultural land (20,814 ha), is planned to be converted into industry (13,399 ha) and settlements (41,821 ha). Thus, these areas will be also prone to inundation in 2030. This change would potentially lead to an economic loss of 246.6 billion USD. The spatial plans issued by the national and provincial governments for regulating the future land use on the northern coast of Java have not integrated measures against hazards related to global sea level rise. Meanwhile, many existing developments have already been affected by coastal inundation. Rather than reducing the exposure towards coastal flood hazards, the case study shows that spatial plans could even increase the risk of climate-related hazards and cause higher economic losses. These findings provide a different perspective on the role of spatial planning for climate change adaptation than what is stated in the literature.