$600 mln US aid to boost Indonesia’s green economy

November 24, 2011

While on her visit to Indonesia, US Secretary of State Hillary Clinton signed an agreement to provide the country over USD600 million in aid, more than half of which will go to a "green prosperity" program. 

The US has pledged to provide USD1 billion in financial support worldwide to reduce deforestation, which will be supplemented by similar commitments from other advanced nations. 

The funds are intended to spark economic development through clean energy and sustainable management of Indonesia's natural resources, which will reduce both poverty and emissions.

A critical component of the package will be funding for projects that reduce poverty while also reducing deforestation and degradation of Indonesia's carbon-rich peat soils, by, for example, shifting palm oil development from the forest frontier to degraded lands and codifying forest communities' land rights.

Indonesia is the world's third largest greenhouse gas polluter, behind China and the US, primarily because of carbon emissions from deforestation and peatland degradation. 

Funding can also be used for renewable energy investments such as modest sized hydropower projects and geothermal plants, spurring business development and providing affordable, clean electricity in rural communities.