Clean & Climate Resilient Transport Nupur Gupta Elena Chesheva Tomas Herrero Diaz Identifying Policy Priorities for Indonesia NOV. 2023 This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights & Permissions © 2023 International Bank for Reconstruction and Devel- opment / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Some rights reserved The material in this work is subject to copyright. 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I Contents 01 19 35 SECTION 1 Decarbonizing Urban Passenger Mobility in Indonesia SECTION 2 E-mobility Adoption for Decarbonization of Mass Transit in SECTION 3 Strengthening Climate Resilience of Road and Bridge Infrastructure in Indonesia Indonesia Figures Figure 1 INDONESIA ENERGY GHG EMISSIONS IN MT CO 2 2 Figure 2 TRANSPORT MODE SHARE IN INDONESIAN CITIES, 2019 4 Figure 3 REDUCTION IN URBAN TRANSPORT GHG WITH PT MODE SHIFT 9 Figure 4 REDUCTION IN URBAN TRANSPORT GHG FROM BAU (ASSUMING SIGNIFICANT VEHICLE ELECTRIFICATION BY 2034) 10 Figure 5 KEY COMPONENTS OF THE PROPOSED URBAN MOBILITY POLICY FRAMEWORK 13 Figure 6 REDUCTION IN URBAN TRANSPORT GHG FROM BAU (ASSUMING SIGNIFICANT VEHICLE ELECTRIFICATION BY 2034) 23 Tables Table 1 ASI FRAMEWORK FOR INDONESIAN CITIES 12 Table 2 SUMMARY OF RECOMMENDATIONS: DECARBONIZING URBAN PASSENGER MOBILITY 18 Table 3 KEY E-MOBILITY STAKEHOLDERS AND REGULATORY ACTIONS 25 Table 4 SUMMARY OF RECOMMENDATIONS: E-MOBILITY ADOPTION 33 Table 5 SUMMARY OF RECOMMENDATIONS: STRENGTHENING CLIMATE RESILIENCE FOR ROAD AND BRIDGE INFRASTRUCTURE 43 P. I I This report was authored by Nupur Gupta, Elena Chesheva and To- mas Herrero Diaz. The report greatly benefited from the Greenhouse Gas Emissions Analysis Model for Mobility in Indonesian urban areas prepared by Richard Bullock, and the team thanks him for his thor- Acknowledgments ough assessment and diligence. Section 2 on E-mobility Adoption for Decarbonization of Mass Transit in Indonesia benefited from contri- butions from Institute of Transportation Development & Policy (ITDP) and International Council on Clean Transport (ICCT), and the World Bank Technical Assistance on E-Mobility Adoption Roadmap for Indo- nesian Mass Transit Program funded by Mobility and Logistics Trust Fund and the Energy Sector Management Assistance Program and executed through ITDP and ICCT. Valuable comments and contributions to this background paper were received from (in alphabetical order), Cecilia Briceno-Garmendia, Georges Darido, Jen JungEun Oh and Yi Yang. The team thanks Chris- tina Natalia for her diligent administrative support and Chris Stewart and Zubair Qamar for editing. The team is especially thankful to staff and officials from the Gov- ernment of Indonesia for their review, comments, and suggestions including to the Technical Assistance Reports, namely (in alphabeti- cal order by agency): the Ministry of National Planning and Develop- ment: Ikhwan Hakim, Director Transport and other staff; the Ministry of Transport: Suharto, Director Road Transport and other staff, the Di- rectorate General Land Transport; Coordinating Ministry of Maritime & Investment Affairs; and staff from the Ministry of Public Works. Financial support for this report was generously provided by the Aus- tralian Government through the Australia-World Bank Indonesia Part- nership (ABIP). Financial support was also provided by the Climate Support facility Whole-of-Economy Program, administered by the World Bank. 01 P. 1 P.1–18 DECARBONIZING URBAN PASSENGER MOBILITY IN 1 Prepared by Nupur Gupta (Senior Urban Transport Specialist). INDONESIA1 P. 2 Key Urban Mobility Issues and Climate Change t 25 percent of energy emissions, transport is one of the major contributors to greenhouse A gas (GHG) emissions in Indonesia (Figure 1). Land transport, comprising road and rail transport, contributes 91 percent of the over- all transport sector emissions. Road transport is responsible for over 86 percent of overall oil consumption (BPS, 2021) and the growing con- centration of GHG emissions and other pollutants (Sukarno, et al. 2016), and dominates the mobility of people and goods serving ap- proximately 85 percent of passenger transport and 90 percent of freight (Leung, 2016) and is, therefore, the dominant contributor of transport emissions. FIG 1 INDONESIA ENERGY GHG EMISSIONS IN MT CO 2 ENERGY LINEAR (TRANSPORT) TRANSPORT 700 639 596 600 562 536 538 500 400 300 200 147 155 158 129 136 100 0 2015 2016 2017 2018 2019 Source: Ministry of Environment and Forestry (MoEF) emissions data (2019). P. 3 The rapid growth in vehicle fleet‒personal passenger vehicles in particular‒is driving road transport emissions. The total vehicle fleet in Indonesia grew at over 10 percent compound annual growth rate between 2000-20. Personal passenger vehicles constitute the bulk of the vehicle fleet and are driving these high growth rates. During the same period, motorcycles grew at 11.3 percent and passenger cars at 8.5 percent, to constitute 84 percent and 12 percent of the total fleet respectively in 2020.2 With over one-half of the population resid- ing in urban areas and projected to grow to three-quarters by 2045, emissions from urban areas deserve special attention. Furthermore, the motorization rate in Indonesian cities exceeded the national aver- age by 44 percent at 690 vehicles per 1,000 inhabitants.3 This rapid urbanization presents a huge opportunity to shape the urban form in growing cities in a way that is conducive to public transport and non-motorized transport. Indonesian cities are suffering from severe congestion, air quality issues, and increasing numbers of road accidents and fatalities. Too many motorized vehicles for too little road space are the source of increasingly intolerable congestion. This leads to significantly re- duced travel speeds and, consequently, average commuting times in Indonesian cities, especially for the poor are high. Congestion makes it harder for metropolitan areas to function as cohesive entities and raises the cost of all goods and services, thereby reducing the eco- nomic competitiveness of the entire country. Traffic accidents and air pollution are the biggest by-products‒leading to a high health cost burden‒while GHG emissions contribute to climate change and as- sociated geophysical, agricultural, and health issues. Private transport dependence is increasing in Indonesian cities. The growth in Indonesia’s urban population has led to a growth in urban area boundaries, suboptimal spatial patterns, and increased travel distances. Residents need motorized transport to reach jobs, education facilities, and social activities as the coverage and quality 2 World Bank analysis based of public transport provided does not offer a credible alternative to on vehicle fleet data from Statistics Indonesia (source data: link and motorcycles and cars. Together with the growth in purchasing power, link). this has resulted in high growth in car and motorcycle ownership and 3 World Bank analysis based on consequently a high level of motorization of 480 per 1,000 inhab- data from Statistics Indonesia (link) and varied sources for population. itants (58 cars per 1,000 people; and 422 motorcycles per 1,000 4 World Bank analysis using people in 2019).4 Excessive use of personal modes of transport re- Statistics Indonesia data. P. 4 sults in a much higher (per person per kilometer) consumption of fuel compared to public transport or walking and cycling and inefficient utilization of road space leading to congestion. The availability and quality of public transport is highly deficient and largely left to fragmented unorganized players with old and poorly maintained minivans (angkot). Overcrowding during peak hours, safety, long commute time, lack of reliability and cleanliness are some of the common issues plaguing the system and are the reason for the rapid shift of commuters to personal modes as the income levels increase and more attractive ride-hailing services ap- pear. As a result, the share of public transport compared to private modes has been on the decline and is currently at low levels. Of the roughly 16 cities in Indonesia with a population of one million and more, only two have a mass rapid transit system. The cities that have invested most in mass transit‒Jakarta and Bandung‒achieve a low public transport modal share of around 10 percent,5 although it is worse for other Indonesian cities (see Figure 2). By contrast, large and rapidly growing cities in China generally attract 20-30 percent modal share for public transport while other Asian cities with well-de- 5 See Systra (2017) “Bandung Low Carbon Mobility Plan” and veloped networks, such as Seoul, Singapore, Tokyo, Hong Kong SAR Japan International Cooperation Agency (2019) “Jabodetabek China, Mumbai, and Kolkata achieve modal shares for public trans- Transportation Policy Integration port of more than 50 percent. Project Phase 2.” FIG 2 TRANSPORT MODE SHARE IN INDONESIAN CITIES, 2019 PUBLIC TRANSPORT % PERSONAL MODE % 90% 80% 78% 72% 73% 67% 70% 69% 70% 60% 57% 55% 50% 40% 30% 20% 14% 10% 10% 7% 6% 4% 3% 2% 2% 0 JAKARTA BANDUNG MEDAN PALEMBANG SEMARANG SURABAYA YOGYAKARTA DENPASAR Source: World Bank analysis of SAKERNAS data 2019 for work trips. P. 5 Users, especially women users, find public transport and streets unsafe. According to surveys6 conducted in the Medan metropolitan area, 76 percent and 57 percent of public transport users found the streets and angkot respectively to be unsafe. There was a high level of dissatisfaction with the quality of the pedestrian environment ow- ing to issues of continuity, cleanliness, and safety. Among users a larger proportion of women than men felt that the streets and angkot were unsafe. The main reasons for the severe underinvestment in urban mobility relate to issues of local capacity and the absence of a conducive policy environment. After the decentralization of government admin- istration in 1999, responsibility for addressing urban transport in In- donesian cities has shifted to cities, but cities continue to lack the technical and fiscal capacity to develop and manage urban transport systems. World Bank analytics7 show that the cost of implementing a Light Rail Transit of 20 kilometers (km) exceeds the borrowing ca- pacity of all the Indonesian cities except for Jakarta, and only seven cities have sufficient borrowing capacity to meet the costs of a Bus Rapid Transit (BRT) system of 30km. Moreover, based on data of the budget plan of large Indonesia cities in 2015, only between 0.13 per- cent to 1.53 percent of their budgets were allocated to public trans- port capital expenditures. The institutional structures are also not appropriate to manage transport demand within fast expanding met- ropolitan areas which typically involves a cluster of cities or regen- cies. A city may only plan and regulate services within its boundaries, and Provincial Transport Agencies are responsible for developing and operating inter-district transport services but have no authority over services within cities and regencies. The Government of Indonesia (GoI) has identified public transport as a priority. The World Bank technical assistance program in 2016- 19 supported the GoI to identify international best practice and op- tions for the development of an Indonesia Mass Transit Program 6 World Bank (2021). "Gender (IMTP). The National Medium-Term Development Plan for 2020- Equality and Social Inclusion (GESI) Assessment for Mebidang Mass 2024 identified public transit as an area for priority attention, used Transit 2021" using data from Egis. 2021. "Mebidangro Sustainable IMTP selection criteria, and proposed mass transit in six metropoli- Urban Mobility Plan, Survey & tan areas, namely Jakarta, Surabaya, Medan, Bandung, Makassar, Diagnosis Report." and Semarang. 7 IDSUN Multi-Donor Trust Fund - Development of Urban Transport Support Platform: Program Design. P. 6 The World Bank-funded project (MASTRAN) is supporting imple- mentation of the first phase of the IMTP including institutional and capacity development, and investment in road-based mass transit systems in Bandung and Medan. Initial implementation in Bandung and Medan will create a foundation for mass transit imple- mentation in other cities. Electric vehicle mobility has been identified as a major prospec- tive area of development for Indonesia. In 2019, Presidential Reg- ulation No. 55/2019 was issued to enact the Electric Vehicle (EV) National Program for Road Transport, which laid out the framework for the development of an EV industry and sector in Indonesia. Since then, many policies and programs to facilitate the development of manufacturing as well as the market have been initiated by stake- holder ministries (Transport, Energy, Environment, Industry, Finance, National Planning, Home Affairs). The GoI targets 30 percent domes- tic production of two- and three-wheelers, and 20 percent of cars by 2035, 90 percent electrification of bus fleets by 2030, and 11,800 battery-swapping charging stations and 88,000 EV charging points by 2025. E-mobility also forms an important part of the GoI’s strategy for climate mitigation. The market response has been timid so far and, despite the gov- ernment electrification plans, the EV market uptake as a fraction of total vehicle sales is small. According to the Ministry of Transpor- tation (MoT) registration numbers8, the number of EV sales in 2022 were 23,261 motorcycles, 5,081 passenger cars, and 11 buses. This is a small fraction of the 1 million cars and 5.2 million motorcycles that were sold in the country. The supply of EV models for passen- ger cars and buses is limited. The reduced number of e-bus options may be driving up their cost which is 1.8 to 2.0 times higher than a similar diesel bus‒compared to 1.4 to 1.5 times in some Latin Amer- ican countries where four or five e-bus companies are competing per country (ICCT, 2020). The product offer for electric two-wheelers (e-2W) and electric three-wheelers (e-3W) is more robust, reaching up to 16 manufacturers and 27 different models, however, issues such as limited financing options and charging infrastructure avail- 8 Directorate General of Land ability are affecting the e-2W uptake (IFC, 2022). A review of the Transport, Presentation on Public Transport Electrification on 21 June 2023 at the World Economic Forum “Moving Indonesia” Task Force 2 Meeting. P. 7 policy framework relative to international experience suggests that fine-tuning current policies and adopting new ones may be needed to accelerate e-mobility adoption. Large gains in both economic development and climate mitigation benefits are possible through a more structured approach towards urban mobility. High traffic congestion in Indonesian cities costs at least US$5.6 billion nationally per year (equivalent to 0.5 percent of national GDP) in terms of excess travel time, fuel consumption, and GHG emissions.9 Congestion is most severe in the Greater Jakarta area where congestion costs exceed US$4 billion per annum and amount to nearly 2 percent of regional GDP. Efficient urban mobility is key to ensuring economic competitiveness of cities and continued growth momentum within the country. Faster commutes and reduced congestion can help increase productivity, but this requires ensuring equitable use of road space by giving priority to higher occupancy vehicles‒that is, public transport systems that carry more people per unit of space and fuel‒and limiting the use of low occupancy vehicles such as cars and two-wheelers. Avoid-Shift-Improve Framework for Transport Decarbonization he broad framework to address decarboniza- tion in urban mobility is defined by the Avoid- T Shift-Improve (ASI) Framework. ‘Avoid’ refers to strategies involving integrated land use and transport planning that can result in an overall reduction in unnecessary travel of people and goods either through fewer trips or shorter trips. These are long-term solutions and take sever- al decades to show results. ‘Shift’ involves the shift of passengers and goods from more GHG-intensive modes to less GHG intensive, such as shifting from personal modes to public transport or walking 9 World Bank staff estimates and cycling. Finally, ‘Improve’ points to improvements possible on ac- based on analysis of weekday count of adoption of more efficient transport operations, better man- traffic data in 28 metropolitan areas in Indonesia. P. 8 agement practices and cleaner vehicle or fuel technologies‒such as from diesel to compressed natural gas (CNG) or electric, improved fuel standards, or efficiency improvements such as optimization of transit operations or urban freight loading that can help reduce fuel consumption. Shift and Improve strategies can be effective strate- gies for showing results in the short to medium term. In the developing country context, where cities are growing and demand for transport rapidly increasing, all three strategies can form important cornerstones of decarbonization strategy. By con- trast, in the developed world where urbanization levels have stabi- lized and travel preferences are well entrenched, ‘Avoid’ and ‘Shift’ strategies may be much harder to implement and show results‒lead- ing to a greater emphasis on ‘Improve’ strategies. Interestingly, in the wake of the COVID-19 pandemic and growing concerns of contami- nation and health, there has been a major shift in emphasis towards carbon-free non-motorized transport options (walking and cycling) in both the developed and developing world. Indonesian cities need to focus on a combination of A-S-I strategies to achieve a slowing down in the growth of GHG emissions. A set of proposed strategies to slow the growth in GHG emissions are outlined below in order of priority‒these can be achieved through a combination of policy, institutional, and funding initia- tives to support sustainable urban mobility in urban areas. • Shift Strategies: The deployment of shift strategies in the form of: (i) priority to public transport; (ii) priority to non-mo- torized transport; and (iii) demand management to increase the attractiveness of public transport and, concurrently, provide disincentives for private vehicle use, can be effec- tive in reducing the rate of growth of GHG emissions from transport. The extremely low public transport mode share and the overwhelming dependence on personal modes points to a major opportunity which could be exploited by: (a) addressing the major supply gap in terms of the availability of reliable, integrated, and good-quality public transport in urban areas in- cluding both mass rapid transit in densely trafficked areas and conventional public bus transport in the rest of the city; (b) im- proving the pedestrian and cycling environment as that forms the first and last mile of any journey and can help improve ac- P. 9 cess to public transport; and (c) adoption of demand manage- ment tools such as parking policies and charges to incentivize the use of public transport and personal modes where good quality transit exists, low emission zones, steeper personal vehicle taxes, and gradual removal of fuel subsidies. World 10 The estimates are based on data for urban cores of 29 large Bank analysis10 of potential savings from the deployment of urban agglomerations in Indonesia, combined with typical trip rates and shift strategies shows that targeted strategies to improve pub- mode splits between public and private transport. These have been lic transport supply and quality and achieve mode shares of projected year-by-year for the next 25 percent by 2034 could lead to reductions of 14 percent in twenty years, taking into account potential changes in vehicle urban transport GHG emissions11 by 2040 (Figure 3). These ownership, vehicle electrification, and electricity carbon emissions. could be scaled up to 24 percent through 100 percent electrifi- 11 The estimates in this section cation of public transport and implementing more sophisticat- assume the BAU electricity ed and high-performance mass rapid transit systems. emission factors described in the CCDR energy model. FIG 3 REDUCTION IN URBAN TRANSPORT GHG WITH PT MODE SHIFT 25% TRANSIT MODE SHARE 25% TRANSIT MODE SHARE WITH 25% TRANSIT MODE SHARE+MRT+100% 100% ELECTRIFICATION ELECTRIFICATION 2021 2025 2030 2035 2040 0% -5% -10% -15% -20% -25% -30% Source: see footnote 10. • Improve Strategies: These cover a gamut of tools: (i) clean- er fuels for vehicles such as electricity; (ii) adoption of im- proved vehicle fuel efficiency/emission standards; and (iii) other efficiency improvements such as reorganization and rationalization of existing angkot routes and public trans- port services (Ardila-Gomez, et al. 2021). Electric mobility has been identified as an area of development by the GoI and a regulatory framework has been provided for the develop- ment of battery electric manufacturing, markets, and supply. While electric mobility offers great potential for decarboniza- P. 1 0 tion of transport, two major factors require attention to exploit this opportunity: (i) the predominance of coal as the energy source for electricity generation leads to suboptimal impacts HIGH ELECTRIFICATION ONLY in 25% TRANSIT terms MODE SHARE of clean tailpipe 25% TRANSIT emissions but high overall source- MODE SHARE+MRT 2021 2025 to-tank emissions; 2030 and (b) the much EVs higher initial cost of 2040 2035 0% compared to internal combustion engine (ICE) vehicles points -10% to the need for subsidies and innovative contracting models for reducing costs of ownership and usage, but also a consid- -20% ered strategy for focusing on specific segments such as public -30% fleets and e-2Ws and e-3Ws. It should be noted that a clean -40% fuel strategy alone is not sufficient to address urban mobility problems. As can be seen in Figure 4, the short-term impact of partially electrifying the vehicle fleet is limited until electricity becomes significantly decarbonized‒which is forecast to be in the mid-2030s. Nevertheless, combining an electric mobility strategy with the urban mobility ‘shift’ strategy leads not only to a more sustainable solution (in terms of reduced congestion and road accidents and fatalities) but also potentially greater climate impacts. The high electrification scenario graph (Figure 4) confirms that vehicle electrification alone results in lower emission reductions of 18 percent in 2040, while combining electrification with an improved public transport mode share of 25 percent and implementation of mass rapid transit sys- tems would lead to reductions of 31 percent and 36 percent respectively. FIG 4 REDUCTION IN URBAN TRANSPORT GHG FROM BAU (ASSUMING SIGNIFICANT VEHICLE ELECTRIFICATION BY 2034) HIGH ELECTRIFICATION ONLY 25% TRANSIT MODE SHARE 25% TRANSIT MODE SHARE+MRT 2021 2025 2030 2035 2040 0% -10% -20% -30% -40% Note: Significant vehicle electrification means public transport 100%, car 25%, and motorcycle 50%. Source: see footnote 10. P. 1 1 Indonesia is behind most other countries in Asia and East Asia in transitioning to Euro 6 fuel standards. Indonesia transitioned to diesel passenger cars and heavy-duty vehicles to Euro 4 standards in April 2022.12 Euro 4 standards can potentially reduce average CO2 emissions per km by 5 to 16 percent depending on the technology of the vehicle it replaces and other aspects of motorization manage- ment that affect vehicle performance and maintenance (World Bank, 2021). • Significant reductions in urban passenger mobility emis- sions are possible through development of attractive transit solutions (shift strategies) and they can be secured without dependence on a transition to clean energy sources. Fur- thermore, reorganization of public transport services can cre- ate operational efficiency and reduce further emissions. It is suggested that these be aggressively pursued by GoI in the short to medium term while preparing for the energy transition which can afford the next big impetus to decarbonization. • Avoid Strategies: Reduced travel distances are possible with the development of compact cities and adoption of integrat- ed land use and transport planning principles. The use of strategies for densification, mixed land uses, urban form and access improvements have proven to reap significant gains in terms of efficient mobility and consequent GHG reductions in cities around the world such as Singapore, Hong Kong SAR China, and Tokyo. This often requires addressing the land use regulations. Overall, change in urban form is a gradual process spanning decades. 12 The Indonesian Government implemented Euro 2/II-equivalent vehicle emission standards for light-duty and heavy-duty vehicles in 2009 and 2010, respectively, and Euro 3-equivalent standards for motorcycles in 2013 (MoEF Decree No. 4/2009 and MoEF Decree No. 10/2012). The country is now implementing Euro 4/ IV-equivalent emission standards for light-duty and heavy-duty vehicles. The Euro 4/IV standard has applied to all gasoline vehicles since 2018 and was due to apply to all diesel vehicles beginning in 2021, however due to market uncertainties, the government postponed its implementation by one year. P. 1 2 TABLE 1 ASI FRAMEWORK FOR INDONESIAN CITIES Strategy Sub-strategy Key Action Timeline Shift Priority to Public Transport Increase supply of quality public transport, with priority Medium term measures to improve the speed of public transport. Priority to Non-motorized Improve the walking and cycling environment and its Transport (NMT) integration with transit. Demand Management Parking policies, low emission zones, pricing tools such as taxes and subsidy. Improve Cleaner Fuel Promote EV through targeted mandates (public fleets), direct Medium term incentives, innovative business models for e-bus, e-2W and e-3W where direct incentives may not be required, cleaning of grid. Vehicle fuel efficiency & Advance adoption of efficiency and emission standards. emission standards Other Angkot route rationalization, traffic management, freight load optimization. Avoid Integrated land-use and Transit-oriented development strategies covering: (i) Long term transport planning density; (ii) diversity; and (iii) design, addressing regulatory constraints. Recommendations ecarbonizing urban transport emissions in In- donesia can be catalyzed in the short to medi- D um term through a combination of ‘shift’ and ‘improve’ strategies focusing on: (i) according priority to transit; and (ii) adoption of e-mobil- ity within the framework of the shift strategy. The main recommendations in this regard are outlined below. A Create a Comprehensive Enabling National Urban Mobility Policy (NUMP) Framework to re-direct sector development to a low car- bon trajectory and ensure the development and implementation of sustainable mobility solutions in urban areas (Figure 5). The proposed framework would guide actions of all stakeholders includ- ing national government, subnational governments (province, city, district), private sector, and communities related to the fulfillment of mobility needs in a sustainable manner13 and seek to address the 13 See EuroClima+ for lessons on developing natural urban mobility observed technical, planning, institutional, and funding constraints policies (link). P. 1 3 that are inhibiting the sector’s development. This can be done by en- suring the development of: • A statement of objectives, goals, and targets with timelines, highlighting the national priority towards public transport and NMT development. • A long term Sustainable Urban Mobility Strategy and Action Plan for each urban/metropolitan area of a certain size. • Integrated institutional arrangement to plan, fund, and man- age sustainable urban mobility in a metropolitan area. • A long-term sustainable Funding mechanism. FIG 5 KEY COMPONENTS OF THE PROPOSED URBAN MOBILITY POLICY FRAMEWORK LONG TERM METROPOLITAN METROPOLITAN TRANSPORT STRATEGIC PLAN AUTHORITY LONG-TERM FUNDING • Sustainable Urban Mobility Strategy and Plan (SUMP). This involves requiring local authorities in metropolitan areas to de- velop 10-year Sustainable Urban Mobility Strategies support- ed by 3-5 year Action Plans per the following principles: • Governing all modes as an integrated system, covering all public transport modes as a minimum. • Priority for public transport and NMT: (i) based on road space equity; and (ii) reflecting a long-term vi- sion consistent with public transport and NMT priority, including adoption of demand management policies and strategies. • Covering the entire metropolitan area beyond institutional and spatial boundaries of local entities. P. 1 4 • Consistent with applicable regulations and land use plans. • Integration among existing and new infrastructure and services. • Constrained by existing and expected financial resources in the identification of investments. • Provisions for ongoing monitoring and evaluation. • Consultative and transparent. • Approved and adopted by local authorities and the basis for urban mobility investments. • Institutional arrangements for planning, implementation, and operation of urban mobility initiatives. Each metropoli- tan area of a certain minimum size (for example, with a popu- lation in excess of one million) should create and/or designate a permanent, legally created entity or Metropolitan Transport (or Transit) Authority (MTA) with: • Statutory authority over all modes (at a minimum all public transport modes) and the entire metropolitan area for major investment planning, priority setting, strategic management/ operations policy setting; • Independent, dedicated funding sources for planning, implementation, operations, and maintenance assistance; • Permanent staff with superior skills, and technical and data resources; • Positive, cooperative relationships with all relevant public, private sector, labor and citizen stakeholders; • Necessary funding and human resources for continuity; and • Regulation and operation could be with other agencies but under the oversight of the MTA. • Long term Funding Mechanism. To ensure the independence of the MTA, there should be a dedicated source of funds for MTA operations, as a minimum. Provincial and city governments need to identify long-term sources for funding the investments and improvements identified and approved in the SUMP as well as their operations and maintenance (O&M). Globally, P. 1 5 there are cities, regions and countries that have created urban transport funds with dedicated sources of funding from linked taxes, fees, and levies to support urban mobility initiatives. In Indonesia, regulation allows provincial governments to allocate 10 percent of transport tax revenues towards public transport development and management, however, this option has not been exploited. B Accelerate the adoption of E-mobility through public fleet man- dates, targeted monetary incentives, and innovative business models. • Mandates for the procurement of e-buses and taxis have been successfully adopted in leading EV markets. For in- stance, China is leading on e-bus adoption via mandates in combination with direct incentives. California and Colombia have also promulgated ambitious mandates for public transit bus fleet electrification over the next decade. Adopting man- dates for EV purchases in public mass transit systems could be considered by GoI to accelerate the EV transition in the country. In principle, this could be focused on public buses and government vehicles and be designed with a clear and realistic timetable for increased EV adoption over time. Having a timed schedule of e-bus and government fleet electrification adoption would allow for better planning of the infrastructure needs. This would facilitate coordination with the utility and equipment providers. In addition, clear mandates for buses and government fleets would also provide a strong signal to EV manufacturers on the demand for EVs in the country. • Direct monetary incentives make EVs more cost competi- tive‒playing an instrumental role in spurring EV sales. Chi- na, India, and California are examples of jurisdictions that have generous purchase subsidies to spur e-bus deployments. The subsidies cover between 30 to 60 percent of the price. Furthermore, it is advisable to make the vehicle taxes low in the initial 3-5 years for e-buses including on their imports as has been done in other countries to provide a real impetus to public transport electrification. California funds several ze- ro-emission vehicle programs and charging infrastructure de- P. 1 6 velopment programs with carbon tax and cap-and-trade pro- grams (CARB, 2022). One immediate carbon tax source could come from the revenue generated by the implementation of a Low-Carbon Emission Vehicle (LCEV) Program that could in- crease the tax value proportionally to vehicle CO2 emissions, exempting zero emission vehicles. In this regard, the cap-and- trade program formally launched in Indonesia through Law No. 7 of 2021, Law No. 4 of 2023, following Presidential Regula- tion No. 98 of 2021 on “The Economic Value of the Carbon” may be useful. It has provisions for channelizing monetary in- centives towards EVs and charging infrastructure, leveraging funds from the carbon tax and cap-and-trade programs. • Deploy innovative business models for public bus services. Revise business models for public bus services to: (i) address the short contract duration (of up to three years), which makes it difficult to recoup the large e-bus capital expense; and (ii) actively explore fleet aggregation/leasing and charging-as-a- service models, through an enabling regulatory environment, for the private sector to innovate (Rubiano, 2018). • Facilitate the uptake of the e-2W and e-3W market. The To- tal Cost of Ownership (TCO) for e-2W has, in general, reached near parity with ICE vehicles, therefore, given the pre-domi- nance of the 2W segment in Indonesia, transitioning it to elec- tric may be an easily adopted initiative for Indonesia. This will, 14 Based on ICF Infrastructure Upstream (Asia Pacific) workshop however, require a review of the existing constraints in terms presentations: “Electrical Vehicles Demand Mapping in Indonesia” of: (i) awareness levels; and (ii) financing options and terms; (November 2021), and “Electrical and (iii) aggressive growth in charging and battery swapping Vehicles Regulations and Policies,” by Deloitte, January 2022. facilities.14 C Launch a National Assistance Scheme for Funding Mass Transit & E-Transit Service. Several countries such as Mexico, Colombia, Unit- ed States, China, and India have national programs to support cities in developing transit systems and other urban mobility interventions. Such a national assistance program to support public transit projects in Indonesia could help unlock the constraints inhibiting the develop- ment of sustainable urban mobility solutions in Indonesian cities in alignment with the NUMP. A national assistance program for capital intensive mass transit projects could ensure that each urban area of a certain size: (i) develops and formally adopts a SUMP through P. 1 7 a transparent process that then becomes the basis for mass transit projects proposed for national assistance; (ii) that the SUMP is devel- oped through an entity designated to plan, implement, and manage all transit modes in the metropolitan area, and a transit management entity is created/designated to manage the system’s O&M and con- tract private operators; (iii) that while capital expenditure be wholly or substantially supported by the national government, the subna- tional government agencies in the metropolitan area be responsible for the O&M of the transit system including the operating phase defi- cits; and (iv) the proposed project undergoes a systematic process for establishing its economic, social, and environmental viability in- cluding through adoption of transit-oriented development principles and demand management strategies. Along similar lines, a national scheme to provide cash grant transfers to subnational governments to partially supplement the deficits during O&M phase accruing on account of formal high quality transit operations (regular city bus op- erations or bus rapid transit) could act as a major catalyst for the much-needed scale-up of transit service supply in urban areas, and could also be designed to spur e-bus deployment. Key requirements for O&M deficit support could include, (i) adoption of a Public Trans- port Improvement Plan derived from the SUMP; (ii) a transit manage- ment entity for managing the O&M and contracts with private oper- ators; (iii) deployment of e-buses; (iv) development of sustainable local funding sources to support service deficits etc. Promulgation of a Presidential Regulation for a national assistance program (since urban mobility is a subnational subject) would go a long way in catalyzing much needed planning and investments in urban mobility. The regulation, as a prerequisite to accessing nation- al funding support, would require provinces and cities to: (i) develop and adopt a sustainable urban mobility plan (as the basis for their mass transit projects) and other plans as required; (ii) create met- ropolitan transport authorities and transit management entities for ensuring integrated planning, development, and management; and (iii) commit resources for supporting the O&M phase. P. 1 8 TABLE 2 SUMMARY OF RECOMMENDATIONS: DECARBONIZING URBAN PASSENGER MOBILITY Suggested Recommendations Implementation Responsible Timeframe Stakeholder Issue a NUMP outlining a consistent policy framework requiring: Short MoT • Objectives, goals, and targets with timelines (i.e., targeted public transport mode share by 2030/2040); • A long-term Sustainable Urban Mobility Strategy and Action Plan for each urban/metropolitan area of a certain size; • Integrated institutional arrangement to plan, fund, and manage sustainable urban mobility in a metropolitan area; and • A long-term sustainable funding mechanism. Accelerate the adoption of electric mobility within the larger urban mobility Short to Medium CMMIA, MoT, strategy through adoption of: MEMR, MoF, MoHA • Public fleet mandates; • Direct fiscal incentives including targeted subsidies, tax concessions for transit; • Expedite the mechanism for channelizing funds from cap-and-trade program for supporting EVs and charging infrastructure; • Deployment of innovative business models for e-buses; and • Address constraints to e-bus, e-2W and e-3W market offtake. Launch the national assistance program for mass transit supported by Medium MoT, Bappenas, necessary regulation. MoF, MoHA Note: MoF: Ministry of Finance; MoHA: Ministry of Home Affairs; CMMIA: Coordinating Ministry for Maritime and Investment Affairs; MoEMR: Ministry of Energy & Mineral Resources. "Large gains in both economic development and climate mitigation benefits are possible through a more structured approach towards urban mobility." 02 P. 1 9 P.19–34 E-MOBILITY ADOPTION FOR 15 Prepared by Nupur Gupta (Senior Urban Transport Specialist) DECARBONIZATION OF MASS TRANSIT IN INDONESIA15 and Tomás Herrero Diez (Transport Consultant) with contributions from ITDP and ICCT. P. 2 0 Introduction ndonesia transport system is a major contribu- I tor of GHGs. The transport sector is responsible for around 25 percent of national CO2 emissions from the use of fossil fuels‒second only to the power sector (35 percent). The transport energy mix relies heavily on oils (93 percent) with biofu- els representing 7 percent of the mix. The growth in fuel combustion comes from the rapidly growing ve- hicle fleet in Indonesia which is dominated by private cars and motorcycles. The growth in passenger vehicles is driven by the rapid urbanization process and unreliable and unsafe public transport ser- vices. Over one-half of the population lives in urban areas and this is projected to reach three-quarters by 2045. Urbanization is increasing the importance of cities as a living space for people and as economic hubs. Much of the growth in Indonesia’s urban population has been in urban areas remote from centers of employment and commerce. With travel distances growing, residents need motorized transport to reach jobs, education facilities, and social activities. As the coverage and quality of public transport does not offer a credible alternative to personal modes, however, there has been an unsustainable growth in car and motorcycle ownership (8.5 percent and 11.3 percent per annum respectively, from 2000 to 2020) and consequently a high level of motorization (480 per 1,000 people in 2019 of which 422 were motorcycles).16 This has led to high levels of congestion and serious air quality issues. As described in Policy Note 1, the broad framework to address decarbonization in urban mobility is defined by the Avoid-Shift-Im- prove (ASI) Framework. ‘Avoid’ refers to strategies involving integrat- ed land use and transport planning that can result in an overall reduc- tion in the travel of people either through fewer trips or shorter trips. ‘Shift’ involves a shift from more GHG-intensive transport modes to less GHG-intensive ones‒such as shifting from personal modes to public transport or walking and cycling. Finally, ‘Improve’ points to 16 World Bank analysis using improvements possible on account of adoption of cleaner fuel tech- Statistics Indonesia data (“Number nologies, such as from diesel to compressed natural gas (CNG) or of Motor Vehicles by Types, Indonesia 1949-2017”). P. 2 1 electricity, improved fuel standards, or efficiency improvements that can help to reduce fuel consumption. Adoption of electric mobility (e-mobility) can be an important ‘Im- prove’ strategy for achieving reductions in global and local emis- sions. Countries around the world, such as China, United States, In- dia, Chile, and countries in Europe have initiated targeted policies and programs for the early adoption of e-mobility with objectives ranging from energy security, industrial development, and air quality in addition to climate change. E-mobility has been identified as a ma- jor area of development by the Government of Indonesia (GoI). In August 2019, Presidential Regulation (Perpres) No. 55/2019 was issued to enact the Electric Vehicle (EV) National Program for Road Transport. The regulation established an ambitious national agenda promoting domestic EV production, reducing the country’s re- liance on fossil fuels, reversing the worsening air-quality trends while providing mobility solutions, and enabling Indonesia to maximize its abundant nickel reserves (the largest in the world)‒a key material for making lithium-ion batteries. In 2020, the share of EVs in vehicle sales was 0.15 percent,17 however, GoI expects that EVs will make up at least 20 percent of total domestic sales by 2025 (with 90 per- cent of buses expected to be e-buses by 2030). Furthermore, Indo- nesia’s Long-term Strategy for Low-Carbon and Climate Resilience 2050 (LTS-LCCR 2050) includes the target to have 30 percent of EVs 17 Data from Climate by 2050. Transparency (2021). P. 2 2 The electrification of the transport sector in Indonesia can provide environmental benefits if developed in parallel with a decarbon- ization of the power sector. The current electricity generation matrix reflects the fact that the country is the fifth-largest producer of coal and the 12th largest producer of gas in the world. By government ac- counts, in 2021 about 87 percent of the installed power capacity was fossil fuel based, whereas 13 percent was from renewable sources. Coal represents two-thirds of the total. The GoI is taking steps to- wards power generation decarbonization with the development of a strategy to reach a renewable energy share of 23 percent by 2025 (MoEMR, 2021). Over the decade to 2030, the government plans to increase by nearly threefold the generation capacity of renewable en- ergy, including hydropower, geothermal, solar, and wind. World Bank analysis of the GHG emission savings18 from rapid electrification of the vehicle fleet (25 percent cars, 50 percent motorcycles, 100 per- cent buses by 2034) shows that emission savings are marginal in initial years owing to the predominance of coal in the energy mix and only begin to improve by the mid-2030s with the addition of cleaner energy sources. The savings relative to the business-as-usual (BAU) scenario are 2 percent in 2030, 6 percent in 2035, and 18 percent by 2040 (Figure 1). As evidenced by the experience of other countries in the deploy- ment of electric mobility, transitioning to electrics has a learning curve and it takes time for the overall eco-system to develop. Elec- tric mobility has the potential to not only reduce emissions, but also improve air quality, reduce noise pollution particularly in densely pop- ulated locations, and provide an opportunity to develop an efficient and more sustainable transport system (Alam, et al. 2021). Finally, given the relatively low motorization levels in Indonesia and the po- tential for growth, an early transition to electric mobility might offer a leapfrogging strategy to cleaner fuels without getting locked into conventional technologies. 18 The estimates are based on Decarbonization impacts can be significantly enhanced by promot- data for urban cores of 29 large urban agglomerations in Indonesia, ing e-mobility adoption in combination with public transit friendly combined with typical trip rates and mode splits between public ‘Shift’ strategies. The introduction of e-mobility within the framework and private transport. These have of a larger urban mobility ‘Shift’ strategy under the aforementioned been projected year-by-year for the next 20 years, taking into account A-S-I framework can reap significant gains both in terms of enhanced potential changes in vehicle ownership, vehicle electrification climate impacts but also in terms of ensuring sustainable and livable and electricity carbon emissions. P. 2 3 cities‒that is, cities without congestion and long commutes and with safer roads. This means promoting e-mobility in combination with a shift to public transport and non-motorized transport (NMT) that would lead to more sustainable outcomes than its promotion in isolation. According to the World Bank analysis, the GHG emission reductions in the high electrification scenario discussed above could be signifi- cantly enhanced to 31 percent and 36 percent respectively by 2040 by targeting an increase in transit mode share and further investment in sophisticated mass rapid transit systems in larger cities (Fig 4). FIG 6 REDUCTION IN URBAN TRANSPORT GHG FROM BAU (ASSUMING SIGNIFICANT VEHICLE ELECTRIFICATION BY 2034) HIGH ELECTRIFICATION ONLY 25% TRANSIT MODE SHARE 25% TRANSIT MODE SHARE+MRT 2021 2025 2030 2035 2040 0% -10% -20% -30% -40% Note Figure 6 is the same as Figure 4, reproduced for reader convenience The Indonesia Mass Transit Project (MASTRAN), supported by the World Bank, will contribute to the decarbonization of urban mobil- ity. This US$224 million investments aims to improve urban mobility and accessibility on high-priority corridors in selected urban areas of Indonesia and strengthen institutional capacity for mass transit development. MASTRAN is supporting the development of Bus Rapid Transit (BRT) systems in the Bandung Basin Metropolitan Area (BBMA) and in Mebidang covering Medan, Binjai, and Deli Serdang. The World Bank has mobilized grant resources19 to support GoI with the imple- mentation of e-mobility and has undertaken a technical assistance (TA) to, among other things, review the e-mobility global trends and conduct a market and regulatory assessment of e-mobility in Indonesia 19 This TA is co-financed by the Mobility and Logistics Trust Fund to advise GoI on bridging the e-mobility policy gaps identified based and the Energy Sector Management Assistance Program and on the lessons emerging from global case studies. In addition, this TA executed HIGH through the Institute ELECTRIFICATION ONLYfor has 25% supported TRANSIT MODE SHARE the preparation of a roadmap for the electrification of 25% TRANSIT MODE SHARE+MRT Transportation and Development Policy (ITDP) and the International 2021 the BRTs proposed 2030 2025 in BBMA and Mebidang. 2035 2040 Council on Clean Transportation (ICCT). 0% P. 2 4 Findings on the Current E-mobility Context in Indonesia he GoI is paving the way to expediting the T adoption of e-mobility by strengthening the related regulatory framework. Its battery elec- tric vehicle (BEV)-promoting policies address not only BEV demand, supply, and climate change mitigation but, industry development, energy security, and air pollution. The electrification of the transport sector in Indonesia is being led by the GoI and, in par- ticular, by the Coordinating Ministry for Maritime and Investment Af- fairs (CMMIA). With the issuance of the abovementioned Perpres No. 55/2019, the President’s Office has committed to accelerating the adoption of BEVs and their manufacturing in the country. The Perpres provides the statutory grounds for the existence of BEVs, the industry around them, and their implementing regulations which have been and continue to be developed by concerned line ministries. Some subnational governments have also issued policies and regulations to support the adoption of e-mobility. Most of them are leaning toward specific BEV segments, for example e-two- and three-wheelers (e-2W and e-3W), e-cars, or e-buses. Bali has launched a more comprehensive policy package, which covers indus- trial and demand incentives, while DKI Jakarta and the provinces of West Java and East Java have established vehicle electrification targets and fiscal policies in support of EV adoption. 20 PLN (Perusahaan Listrik The basic regulatory framework has also been developed for EV Negara) is the Indonesian state- owned enterprise (SoE) responsible charging infrastructure. This enables the sale of electricity via a for electricity generation, public private partnership (PPP) between PLN20 and the private sec- transmission, and distribution. tor. There is also a regulatory structure for the sale of electricity and 21 Minister of Energy and Mineral Resources Regulation No. 13/2020 battery swapping for EVs.21 Furthermore, PLN is offering competitive on the Provision of Infrastructure for the Charging of BEV Vehicles. electricity rates for these types of business ventures. In 2021, there (Peraturan Menteri ESDM were 187 EV charging stations dispersed across 155 locations in Nomor 13 Tahun 2020 Tentang Penyediaan Infrastruktur Pengisian Indonesia. There were also 153 active EV battery swapping stations Listrik untuk Kendaraan Bermotor Listrik Berbasis Baterai (link). spread across 86 locations in Jakarta and Tangerang.22 A target of P. 2 5 11,800 battery swapping stations and 88,000 EV charging points by 2025 has been established. Grid-level and local distribution network impacts are currently neg- ligible at this initial stage of e-mobility but may require attention with a pickup in uptake. The review of the impacts on account of the full implementation of BBMA and Mebidang BRT projects through e-bus deployment suggest that the current grid infrastructure down to the local substation level is sufficient to supply the electricity de- 22 IDN Financials. 2021. “187 mand for BRT electrification. Table 3 highlights the main institutions, EV charging stations are fully operated” (link). scope, and regulatory actions in support of e-mobility in Indonesia: TABLE 3 KEY E-MOBILITY STAKEHOLDERS AND REGULATORY ACTIONS Stakeholder Scope Regulatory Actions The President Government Perpres No. 55/2019 issuance – EV National Program for Road Transport. This policy regulation offers clear guidance to the automotive industry on EV development and provides opportunities for local governments and universities to become involved. This regulation has four objectives: (i) identify responsible and leading ministries/agencies for implementation; (ii) set an EV definition and develop technical specifications; (iii) create EV manufacturing capacity; and (iv) facilitate the market transition from internal combustion engine (ICE) vehicles to EVs. Ministry of Industrial • Develop strategic plans for EV and component manufacturing in the country Industry (MoI) development (Roadmap of Automotive National Industry). of EVs and • Foster the development of mining and manufacturing consortiums for battery charging components manufacturing between SoEs and international companies. infrastructure • Issue technical regulations on EV manufacturing and standards. manufacturing • Issue regulation defining domestic content levels on EVs: manufacturers should increase local manufacturing content from 40 percent in 2019 to a minimum of 80 percent in 2030 for four-wheelers (including passenger cars and heavy-duty vehicles). Ministry of EVs Focus its planning and regulatory agenda in two main areas: public transport and Transportation technical regulations for EV deployment on Indonesian roads. (MoT) • Set ambitious targets for electrification of public transit fleets (90 percent by 2030). • Develop and implement the public transit bus promotion program: Buy the Service (BTS)23 or similar, which can be used in support of e-bus deployments. • Issue technical regulations for EV roadworthiness certification and components tests. Define what is an EV and provide legal framework for on-road use. Cover all electric-powered vehicles, including e-2W, e-3W, e-cars, e-buses, and e-trucks. 23 BTS is a subsidy scheme, launched in early 2021 by MoT, to pay a bus operator for providing public transport services on selected route services. There are five cities in Indonesia that currently operate the BTS program: (i) Palembang; (ii) Surakarta; (iii) Denpasar; (iv) Yogyakarta; and (v) Medan; and four additional cities plan to adopt it soon: (vi) Bandung; (vii) Surabaya; (viii) Makassar; and (ix) Banjarmasin. P. 2 6 Stakeholder Scope Regulatory Actions Ministry of Charging Responsible for setting policies in the energy sector in support of EV deployments. Key Energy and infrastructure areas that fall under its authority and responsibility are: Mineral and electricity • Charging infrastructure: This includes expansion of public EV charging stations Resources including gas stations, offices, shopping centers, and parking areas. (MoEMR) • Electricity sale business: Redefine the legal framework behind the sale of electricity creating opportunities for private parties to cooperate with PLN to run the electricity supply business for EV charging stations (battery swapping and point chargers). • E-tariffs: Define the electricity tariffs for EV charging business. • Standards and safety: This includes charging stations that are obliged to comply with electricity sales safety requirements, certificates of operation acceptance, and conformity of production standards. Standards are in place for power supply, connectors, and battery safety, with potentially some gap in terms of the plugin connector standards. • High-level coordination on infrastructure development with PLN. • Electricity generation decarbonization policy and access to it: Allow for users to enter into contract agreements with PLN to procure renewable energy. Opens the door for renewable only-EV electricity sale contracts. The MoEMR has issued regulations and established development goals with PLN. The BEV program has been included in the National Medium-Term Development Plan 2020- 2024 and is focused on charging infrastructure development, and the development of the battery industry in Indonesia. Ministry of Fiscal MoF has issued the largest number of regulations in support of EV adoption in the Finance (MoF) instruments country. These fiscal incentives target supply and demand creation. and financing • MoF provided a “tax holiday” to eligible pioneer industries, which include EV mechanisms manufacturers and their components. It includes a deduction of corporate income tax, which can amount to 100 percent of the total corporate income tax payable for a period of 5 to 20 years depending on the level of investment. • Hybrid, flex fuel engine vehicles (that use 100 percent biofuels), and EVs can receive a 0 percent luxury tax rate.24 if the vehicle meets domestic content requirements (in the case of imported units, the luxury tax rate is 15 percent, which applies to small conventional vehicles). By comparison, ICE vehicles are subject to a luxury tax rate that ranges from 15 to 95 percent of the vehicle value. • The GoI has introduced several regulations to support the implementation of a cap- and-trade system and a carbon tax. The Financial Services Authority (OJK) officially launched the carbon market in September 2023. While power generation has been chosen as the first subsector (IESR, 2023) to implement mandatory carbon trading, other subsectors are under review. Provincial Locally Local governments in Bali, Jakarta, West Java, and East Java implemented lower governments managed vehicle and transfer taxes for EVs, including for e-buses, under the ministerial fiscal framework. For instance, in Jakarta the transfer tax has been reduced from 10 percent measures for ICE vehicles to 0 percent for EVs. In West Java, ICE vehicles are levied higher transfer taxes (12.5 percent for 4-wheelers, and 12.5-15 percent for 2-wheelers), vis-à-vis EVs (10 percent for 4-wheelers, and 2.5 percent for 2-wheelers). In East Java, transfer tax for ICE vehicles is 12.5-15 percent vis-à-vis 10 percent for EVs. 24 All motor vehicles sold in Indonesia are subject to several taxes, including: (i) luxury tax (this only applies to cars); (ii) value-added tax (VAT); (iii) annual circulation tax; and (iv) transfer tax. The luxury tax and VAT are regulated by the central government, while the annual circulation tax and transfer tax are regulated by provincial governments. P. 2 7 The available regulatory framework has enabled the implementa- tion of pilots to electrify different public transport means. Since 2019, TransJakarta (the BRT system transporting more than 1 mil- lion inhabitants of Jabodetabek daily)25 has been piloting e-buses on existing routes (six e-buses have been piloted, and 100 e-bus- es are proposed to be piloted in 2022-2023) and aims to transition 100 percent of its fleet to e-buses by 2030. In addition, MoT initiated e-bus pilots in Bandung (West Java) and Surabaya (East Java) using the BTS subsidy scheme. Indonesia’s largest private taxi company, Blue Bird Group, is operating 150 e-taxis and planning to expand to 500 EVs by the end of 2023 (Kumparan, 2023). Ride hailing trans- port provider Grab claims to have deployed 8,500 EVs as of Decem- ber 2022, consisting of e-scooters and e-taxis (Hidayat, et al. 2022). The current regulatory framework may fall short in attracting a wider range of EV suppliers and manufacturers to Indonesia. Over- all, the country faces a lack of supply of EV models for passenger cars and buses‒as of 2021, there are only five passenger vehicle brands, and three e-bus manufacturers. Compared to other countries/re- gions, the availability of EV models of passenger cars is especially low‒for example, in Europe, passenger car consumers can choose between 17-43 different EV models, depending on the country (Wap- pelhorst, 2020). The reduced number of e-bus options may be driv- ing up their cost which is 1.8 to 2.0 times higher than a similar diesel bus‒compared to 1.4 to 1.5 times in some Latin American countries where four or five e-bus companies are competing per country (ICCT, 2020). The availability of e-2W and e-3W is more robust, reaching up to 16 manufacturers and 27 different models. The market has nine EV supply equipment (EVSE) providers registered with the MoEMR as of February 2021. The issues constraining the e-2W market relate more to the financing options and conditions and driving license re- quirements.26 Current regulations in Indonesia constrain the adoption of innova- 25 Jabodetabek is an acronym of Jakarta-Bogor-Depok- tive business models that enable leveraging private sector partic- Tangerang-Bekasi and refers to the metropolitan area of Greater ipation and favor the deployment of e-buses. In Indonesia, current Jakarta. business models that govern public transit bus fleet services present 26 “Electrical Vehicles two key limitations: (i) the contract period is too short, which could Regulations and Policies.” Presentation by Deloitte at work with conventional buses but makes it very difficult to recoup Infrastructure Upstream (Asia Pacific), January 2022, organized the large capital expenses of e-buses (the usual contract period is by IFC. P. 2 8 up to three years);27 and (ii) the current business model that bun- dles fleet and fuel/charging infrastructure with the operations and 27 The TransJakarta operator maintenance (O&M) of the buses, would require a significantly higher gets a contract period of 10 years, capital investment than what traditional operators face today‒which but this has been possible through a special decree. may be out of reach for most of them. Recommendations he timid market response suggests that T fine-tuning current policies and adopting new ones may be needed to accelerate e-mobility adoption. A set of recommendations to bridge the policy gaps identified based on global good practice are proposed below. These recommen- dations provide an opportunity to improve the current regulatory framework and adopt new measures that have proven successful in EV leading cities and countries. Transport electrification can be fomented through mandates re- quiring the procurement of EVs when renewing public fleets. Man- dates for the procurement of e-buses and e-taxis have been success- fully adopted in leading EV markets. For instance, China is leading on e-bus adoption via mandates, in combination with direct incentives. P. 2 9 California and Colombia have also promulgated ambitious mandates for public transit bus fleet electrification over the next decade. Adopt- ing mandates for EV purchases in public mass transit systems should be considered by GoI to accelerate the EV transition. In principle, this could be focused on public buses and government vehicles and be designed with a clear and realistic timetable for increased EV adop- tion over time. Having a timed schedule for e-bus and government fleet electrification adoption would allow for better planning of the infrastructure needs. This would facilitate coordination with PLN and EVSE providers. In addition, clear mandates for buses and govern- ment fleets would also provide a strong signal to EV manufacturers on the demand for EVs. Securing the demand would reduce the risk of investing in EV manufacturing and better align the GoI’s industrial development strategies for this sector. It is recommended to provide strong direct monetary incentives to reduce costs and create demand with a clearer focus on fleets. Direct monetary incentives make EVs more cost competitive and play an instrumental role in spurring EV sales. For Indonesia, the following direct incentives could be considered: • Purchase subsidies for EVs for public transit systems. China, India, and California are examples of jurisdictions that provide generous purchase subsidies to spur e-bus deployments. The subsidies cover between 30 to 60 percent of the price. A sim- ilar range of subsidies could be considered for Indonesia and channeled through ongoing national schemes for bus service support or similar, covering a proportion of the e-bus capital costs. These subsidies can be prioritized for mass public tran- sit at the beginning and be phased out over time as battery prices will drop. • National harmonization and maximization of fiscal incen- tives for EVs. Tax rate concessions for EVs can be a major source of fiscal incentives. Fiscal incentives for EV vehicle and transfer taxes are managed in Indonesia by the local govern- ments and vary significantly from very generous (for example, in Jakarta, the transfer tax for an e-bus is 0 percent vis-à-vis 12.5 percent for an ICE bus) to no incentives (for example, North Sumatra Province has the same transfer tax for e-buses and ICE buses). The same case applies with EV taxes. It would P. 3 0 be recommended to harmonize the incentive across the Indo- nesian provinces and maximize the value in favor of EVs. It is advisable to make the vehicle taxes low in the initial 3-5 years for e-buses, including for their imports, as it has been done in other countries to provide a real impetus to public transport electrification. • Expedite adoption of a cap-and-trade program and carbon taxes to fund direct incentives. The direct incentives to implement mass public transit e-mobility programs and electric charging infrastructure could be financed via a cap-and-trade program and carbon tax revenue streams. For instance, California funds several zero-emission vehicle programs and charging infrastruc- ture development programs with carbon tax and cap-and-trade programs (CARB, 2022a). One immediate carbon tax source could come from the revenue generated by the implementation of a Low-Carbon Emission Vehicle (LCEV) Program, which could increase the tax value proportionally to vehicle CO2 emissions, exempting zero-emission vehicles. Another option for the near future is making use of carbon tax revenue under the Indonesian cap-and-trade program which was recently launched, following the approval of Presidential Regulation 98/2021 on the Carbon Economic Value. According to MEMR, the carbon tax for above- cap pollution ranges from US$ 2 to US$ 18 per tonne of CO2 for coal-fired power plants.28 The current regulations in Indonesia should be updated to enable the adoption of innovative business models. As flagged above, the current regulatory framework limits the adoption of innovative business models that have proved to be very useful to mobilizing private capital and expediting the adoption of e-mobility in other cities. For instance, Bogota and Santiago in Chile implemented innovative procurement and business arrangements to deploy hundreds of e-buses in a couple of years in the absence of significant state financing. The business model used for the implementation of e-buses in these cities consists of a concession scheme established be- tween the state and private companies. Power utility companies and other private investors became new players in this model, providing strong financial backing and, thereby, reducing the 28 Reuters. 2023. “Indonesia Begins Trading Carbon Dioxide public financial burden. The model is built around separation Emissions Credits.” September 26, 2023. (link). of bus and charging infrastructure ownership and fleet O&M. P. 3 1 Private investors and power utility companies tend to become e-bus and infrastructure owners, while traditional bus operators continue fulfilling that role. In addition, e-bus concession con- tracts were set for 14 to 15 years, which is 4-5 years more than for ICE buses. This ensures that the operational savings from e-buses, due to lower maintenance and energy costs, compen- sate the higher upfront cost of procuring e-buses. Based on the Latin American case studies analyzed, the following reforms and actions to enable the adoption of innovative business models for e-bus deployment are recommended for Indonesia: • Extend the contract period for e-bus concessions when ten- dering bus routes in Indonesian cities. Ideally the duration of the contract would be longer than 10 years to better account for the battery replacement cost that happens at around eight years of the e-bus operation. This can also be implemented under a revamped BTS program, which can include a longer period of subsidy support for operators of e-buses beyond the originally planned three years. • In the short term, mainstream the business models already being adopted for public charging and battery swapping stations into public transit charging infrastructure develop- ment. The regional-owned enterprise (RoE) for public transit bus fleets could assume the cost of charging infrastructure development in partnership with PLN or private companies. This would reduce the capital cost of electrification for the bus operator-cum-owner who will be contracted under the traditional bus transit business model. • In the medium to long term, explore the possibility of adopting more sophisticated business models for bus transit systems ownership and operation. Coordinating new actors in the pub- lic transit business space would likely require an independent institution that can govern tendering and operations across geographic boundaries as BRT systems tend to extend beyond single city limits. It is recommended to consider the adoption of models that facilitate the public transit RoE operating as the Government Contracting Agency (GCA). The RoE offers some benefits over other typical governing bodies: it is a non-gov- ernment bureaucracy that can be set up for profit and have P. 3 2 access to regional budget allocations, grants, and loans and can acquire long-term loans. This is very relevant for infrastruc- ture development, fare collection systems, and monitoring of performance services. The RoE could access several financial facilities offered under the current PPP regulatory framework to moderate the costs and risks pertaining to e-bus deployments, such as value gap funding from MoF and project guarantees from the Indonesia Infrastructure Guarantee Fund. • Land provision for depot development should be covered by subnational governments. Provision of expensive land in ur- ban centers for depot facilities by subnational agencies can be another form of reducing the risk and financial burden on private operators. Cities such as Santiago in Chile have taken over depot ownership to better manage these risks and ensure proper depot and charging facilities for the transit fleets. For BBMA and Mebidang BRTs, it is recommended that both the provincial and city governments provide these facilities. Establishing a Public Transport Electrification Committee com- prising key stakeholders for the Development of a E-Bus Roadmap can help inform and streamline electric bus fleet transition and scale-up in the country. A comprehensive roadmap which considers, policy and regulatory aspects including monetary and non-monetary incentives, to help develop the public transport electrification market but also upstream supply and industry, address the service contract- ing and funding and financing issues can be a major enabler and ensure an integrated approach across the multiple ministries of MoT, MoEMR, MoI, MoHA and MoF. P. 3 3 Table 4 provides a summary of the proposed recommendations, implementation timeframe, development goals each measure will contribute to, and the responsible stakeholder. TABLE 4 SUMMARY OF RECOMMENDATIONS: E-MOBILITY ADOPTION Recommendation Implementation Development Goals Stakeholder Timeframe Promulgate public mandate for the Short • Support MoT’s goal of 90 CMMIA, MoF, Public Mandates electrification of public buses and percent electrification of public MoT government vehicles transit fleets by 2030. • Increase demand for locally manufactured EVs and components. Establish purchase subsidies for Short (high- • Support MoT’s goal of 90 CMMIA, MoF, EVs to be used in public transport value subsidy) percent electrification of public MoT systems Medium (low- transit fleet by 2030. value subsidy) • Increase demand for locally Provide Direct/monetary incentives manufactured EVs and components. National harmonization and Short • Increase demand of EVs to meet CMMIA, MoF maximization of fiscal incentives for GoI EV production targets. EVs Expedite the adoption of the cap- Short to long • Support MoT’s goal of 90 CMMIA, MoF, and-trade program and carbon taxes percent electrification of public MoT to fund direct incentives for EVs transit fleets by 2030. procurement • Increase demand of EVs across all segments to meet EV production targets. Extend e-bus contract period Short • Support MoT’s goal of 90 MoT, MoHA, percent electrification of public Local transit transit fleets by 2030. authorities • Increase demand for locally Adoption of Innovative manufactured EVs and Business Models components. Mainstream the business models Short • Support MoT’s goal of 90 MoEMR, MoT already being adopted for public percent electrification of public charging and battery swapping transit fleets by 2030. stations into public transit charging • Support MoEMR goals to reach infrastructure development 88,000 charging points by 2025. • Increase demand for locally manufactured EVs and components. P. 3 4 Recommendation Implementation Development Goals Stakeholder Timeframe Explore the adoption of more Short to • Support MoT’s goal of 90 MoF, MoT, Business Models sophisticated business models for medium percent electrification of public Subnational Adoption of Innovative e-bus contracts that facilitate the transit fleets by 2030. governments public transit RoE operating as the • Increase demand for locally GCA manufactured EVs and components. Establish a Public Transport Short to • Support MoT’s goal of 90 CMMIA, MoT, Coordination Electrification Committee to develop medium percent electrification of public MoHA, MoI, Stakeholder the Roadmap for E-Bus Scale-up, transit fleets by 2030. MoEMR, improve stakeholder coordination, MoF, and design policy recommendation Subnational (including industrial policy) governments Note: MoHA: Ministry of Home Affairs. "Decarbonization impacts can be significantly enhanced by promoting e-mobility adoption in combination with public transit friendly ‘Shift’ strategies." 03 P. 3 5 P.35–43 STRENGTHENING CLIMATE RESILIENCE OF ROAD AND BRIDGE INFRASTRUCTURE IN INDONESIA P. 3 6 Context ndonesia’s geographical location on the Pacif- I ic “Ring of Fire” and archipelagic nature ren- der it highly susceptible to natural disasters. The nation grapples with many disasters, such as earthquakes, tsunamis, floods, and land- slides, positioning it as one of the most disas- ter-prone countries globally. Historical data paint a somber picture; for instance, disasters between 2007 and 2018 claimed 7,375 lives and displaced 55 million people29, resulting in annual economic losses ranging from US$2.2 to US$3.0 billion30. Climate change further aggravates the severity of natural disas- ters such as flooding and landslides, resulting in significant dam- age to infrastructure like roads and bridges. Over the past two de- cades, natural calamities have ravaged hundreds of kilometers of roads, with floods alone accounting for nearly 65 percent of the de- struction, while earthquakes and tsunamis combined have contrib- uted over 30 percent. About 30 to 34 percent of the road network is highly susceptible to these disasters. Any disruption or failure on this critical network severely impacts connectivity and accessibility, which in turn, affects households and businesses. The consequences echo indirectly through the loss of jobs and income sources and directly impact people’s health and well-being (Hallegatte, et al. 2019) and access to markets. Sea-level rise poses a substantial risk to Indonesia’s transpor- tation infrastructure, especially in coastal regions. Due to global warming, sea levels around Indonesia are projected to rise between 52-115 cm by the end of the century (Nicholls et al. 2007). This es- calation threatens to inundate roadways, bridges, and other critical 29 Based on EM-DAT and Badan transport assets, undermining their structural integrity, causing corro- Nasional Penanggulangan Bencana (National Disaster Management sion, and exacerbating the risks of natural disasters like storm surges Authority) data and flooding. The vulnerability of transport infrastructure to sea-level 30 National Disaster rise is particularly acute in low-lying urban areas, where significant Management Authority, Head of Data and Information, 2018; and portions of the road and bridge networks could be submerged, dis- World Bank/GFDRR (2012). Among the ASEAN countries, Indonesia rupting essential transportation services, impeding economic activi- faces particularly high expected ties, and causing the isolation of communities. annual economic losses from floods and earthquakes. P. 3 7 Adaptation measures are imperative to strengthen the resilience of Indonesia’s infrastructure against the changing climate. De- spite the urgent need, systematic consideration of climate resilience principles has yet to be considered in developing transport infrastruc- ture. To support the country’s swift economic advancement, the gov- ernment has prioritized rapid transport infrastructure development, allocating limited focus towards fortifying it against disasters and the impacts of climate change. A proactive approach will ensure that in- frastructure evolves resiliently, aligning with both current demands and future uncertainties. Key Issues Affecting Resilience of Road and Bridge Infrastructure hile Indonesia’s national policies are funda- W mentally robust, offering a comprehensive framework for improving the road and bridge infrastructure resilience, there are opportuni- ties to strengthen planning, design, operation and maintenance, and rehabilitation or recon- struction practices. Most of the Directorate General of Highways (DGH)31 guidelines and technical specifications used for road and bridge design were found to address key resilience improvement aspects. They also include prescriptions for conducting special analyses adapted to local circumstances. However, there are discernible gaps, primarily concerning rockfall protection, soil slope stabilization, and road drainage systems—critical areas that warrant immediate attention and enhancement to uphold the integrity of the infrastructures against natural calamities. Some gaps were ad- dressed under the World Bank technical assistance that developed technical notes drawing from good practice to reinforce the resilience of roads and bridge infrastructure across Indonesia, guiding them towards enhanced durability and sustainability. 31 The Directorate General of Highways comes under the Ministry of Public Works and Public Housing The DGH guidelines and technical specifications have undergone (MPWPH) and is responsible for the management and improvement of a comprehensive review, pinpointing the need to address roadside national roads. P. 3 8 slope failures. Such roadside slope failures often occur due to insta- bilities driven by water seepage and erosion, exacerbated by a lack of optimal design slopes. Recommendations for mitigating these issues are threefold. Firstly, they were introducing new design methods and rock characteristic parameters to develop solutions better adapted to local conditions. Adoption of innovative technical solutions to deal with steep slopes, such as soil nailing with slope surface protection of geotextiles, hydro-seeding technology, wire meshing, or pile walls, is essential. Finally, a pronounced emphasis must be placed on con- structing effective drainage systems and conducting special mainte- nance and monitoring for critical sites. Boosting awareness and using natural disaster risk maps coupled with enhanced information systems is essential for identifying critical vulnerabilities along the road and bridge network. A short- fall exists in the practical understanding and appreciation of natural disaster risks pertinent to the nation’s road network. In practice di- saster risks may be known, but gaps persist in translating this knowl- edge into actionable mitigation strategies aimed at infrastructure resilience. A well-developed framework for disaster management led by the National Disaster Management Authority (Badan Nasional Penanggulangan Bencana: BNPB) has been prepared. However, it is designed mainly to inform communities about disaster risks and to increase their preparedness rather than to improve resilience and quality of infrastructure. A paradigm shift towards a well-structured and strategic approach to disaster management is imperative. Optimal knowledge of locations predisposed to more severe dam- age from disasters would help plan preventive resilience improve- ment interventions and reduce damage to infrastructure in the long-term and post-disaster rehabilitation costs. Efforts should be intensified to heighten awareness regarding the significance of di- saster risk maps in safeguarding the road network. Enhancing the quantity and quality of data on disaster impacts on roads and bridges is essential. Initiatives have been deployed by the DGH to gather per- tinent data at subnational levels, focusing on damage induced by var- ious disasters. A more synergized collaboration between the National Disaster Management Authority (BNPB) and the DGH could further bolster these efforts, optimizing strategies to enhance the resilience of roads and bridges against flood and landslide hazards. P. 3 9 Post-disaster evaluations are pivotal in offering deep insights and a knowledge base on the impact of natural disasters and climate change on road and bridge infrastructure. The Western Indonesia National Roads Improvement Project (WINRIP)32 supported the reha- bilitation and reconstruction of roads and bridges damaged by the 2018 Central Sulawesi earthquake and tsunami. The post-disaster assessments were informative in guiding better planning, design, and reconstruction practices. The Government of Indonesia (GoI) ac- knowledged the reconstruction priorities and effective resilience im- provement measures were provided through WINRIP. Consequently, it is advisable to embrace further detailed post-disaster evaluations, such as hydraulic studies of bridge foundations and heightened anal- ysis of high-risk scenarios. While the GoI significantly increased investments in building in- frastructure33, limited funding for maintenance, monitoring, and emergency response operations is a significant constraint in its decentralized government administration. This financial constraint impacts various essential activities and forces subnational authori- ties to prioritize resources, which can lead to a mismatch between actual needs and traditional annual budget allocations, especially concerning disaster response. Enhancing Balai-level34 budget plan- ning and funding could introduce much-needed flexibility, allowing for a swift and effective response to disaster situations and prioritizing crucial maintenance and monitoring activities. The DGH should lever- age disaster-impact data to evaluate and allocate budgets strategical- ly across each Balai, focusing resources on regions most susceptible to disaster risks. Adopting this targeted strategy fosters enhanced mitigation and preparedness, preventing severe repercussions from natural disasters. 32 WINRIP was funded by the World Bank and implemented by DGH from 2011–21. The project The Balai offices should be encouraged to intensify their focus on objective was to increase the effective use of selected sections of disaster management activities. To foster this, developing incentive national roads along the Western mechanisms in collaboration with national and local authorities would Sumatra corridor by reducing road user costs. be helpful. Such a mechanism would “reward” more responsive re- 33 11 The government spending gions and disincentives for regions exhibiting less engagement. Also, increased from US$13 billion in 2014 to US$27.2 in 2019, leading a performance monitoring system could be used to measure how well to the construction of o 3,432km of different offices spend resources toward emergency response and roads, 1,852km of highways, and 41.1km of bridges. preventive measures in their region. Lastly, it is recommended that 34 Balai refers to a subnational DGH hires financial experts to assess implementation options and office at the provincial level. P. 4 0 initiate discussions to develop dedicated funds to be included in an- nual budgets or pools of funds for Balai office priority interventions. This could include key national stakeholders such as the Ministry of Finance (MoF), the BNPB, and international development partners. This approach would optimize the allocation of resources, ensuring that regions more susceptible to disasters are aptly prioritized and equipped for preventive and responsive actions. Due to Indonesia’s vast size and geographic diversity, baseline di- saster risk information‒primarily related to individual asset vul- nerability, is limited. While the BNPB has increased efforts to up- date hazard and exposure mapping across the country,35 there is further opportunity for technical line ministries to utilize such risk information when planning, prioritizing, and designing critical assets and infrastructure. Sector-specific investment prioritization tools also need to be developed to inform decision-making on resilience-build- ing options, helping governments to spend money more wisely and in a more targeted way (especially due to the large size of Indonesia and limited subnational resources). Spatial plans and building codes at the subnational level also need to incorporate climate and disaster resilience when being updated so that governments can reduce the vulnerability and exposure of assets and people to natural hazards and climate risks. Moreover, a revamping of investment planning and asset management practices is imperative, promoting the institution- alization of risk-informed approaches, enhancing climate resilience criteria, and guiding systematic routines of operations and mainte- nance. This necessitates the allocation of adequate resources and the enhancement of the capacities of planning departments, ensur- ing the development of infrastructure projects with robust quality and resilience attributes. A discernible implementation gap exists despite the presence of good technical guidelines. Such shortfall is evident in the subopti- mal quality of civil works in road projects, irrespective of their financ- ing by the national budget or funds from the development partners. The road managers and engineers recognized the construction su- pervision capacity gap as one of the main constraints behind the outcome. It is, therefore, recommended to improve the effectiveness 35 For example, the Indonesia of construction supervision activities by (i) mobilizing additional re- disaster risk platform InaRISK provides exposure data at the sources to provide intensive and independent technical supervision subnational level. P. 4 1 of civil works and (ii) adopting a supervision-friendly design (for ex- ample, implementing a corridor approach, whereby segments are grouped and located in sequence, thereby easing technical supervi- sion and third-party monitoring). The main impediment to tackling regulatory and policy challeng- es is the non-mandatory adoption of resilience stipulations infra- structure such as the Indonesian National Standard 2833:2016 for bridges. This shortfall is partially attributable to limited enforcement and the absence of incentives to adopt such standards. In addition, there are institutional challenges relating to technical and financial capacity. The need for qualified professionals to carry out high-quali- ty constructions and consider disaster risk aspects in the building of roads and bridges results in built infrastructure that is less resilient. Resilient infrastructure requires high financial investment, and al- ternative financing options to fully fund resilient infrastructure will be necessary. To manage these fiscal constraints, the Public-Private Partnership (PPP) emerges as a pivotal strategy. Enhancing coordina- tion and establishing structured PPP schemas can serve to invigorate investor interest and facilitate the financing of resilient infrastructure projects (Riefky, et al. 2021). Strengthening Resilience of the Road and Bridge Network he GoI recognizes the vulnerability of its road T and bridge network and the need to adapt it to a changing climate. In 2011, the MPWPH cre- ated a Disaster Risk Management (DRM) Unit36 36 The name of this unit was under the DGH to provide technical assistance the Subdirectorate of Road Environment and Safety or to strengthen disaster risk mitigation in the road Lingkungan dan Keselamatan and bridge sectors. Since then, that unit has Jalan (LKJ) in Bahasa Indonesia. In June 2020, following an extensive been growing, receiving more visibility within DGH, and implementing reorganization in DGH, LKJ was re- named the Subdirectorate of Road DRM-related technical assistance and capacity building, including and Bridge Safety and Security. The DRM-related responsibilities preparing the Natural Disaster Risk Analysis on Roads and Bridges and functions remain under that subdirectorate. Guideline 2014. The National Medium-Term Development Plan (Ren- P. 4 2 cana Pembangunan Jangka Menengah Nasional: RPJMN) for 2020– 2024 has among its priorities not only “improving infrastructure to support economic development and basic services”, but also “de- veloping the environment, and increasing resilience to disaster and climate change” (Bappenas, 2020). The World Bank has been supporting GoI to address climate change impacts on road infrastructure to increase its resilience to natural disasters. This collaboration is aligned with the GoI’s Long-Term National Development Plan (2005–2025) that aims to build resilience by reducing the impact of disasters.37 The Contingen- cy for Disaster Risk Response Component of the recently closed38 WINRIP (P090990) was triggered in 2018 following the devastating earthquake and tsunami in Central Sulawesi. This supported the post-disaster rehabilitation and reconstruction of more than 70km of damaged roads and bridges. In addition, MPWPH and the World Bank partnered on technical assistance, with grant support from the GFDRR, to promote the systematic inclusion of disaster and climate resilience principles into all stages of road and bridge projects. In particular, the main objective of that assistance was the review and enhancement of existing DGH guidelines and technical specifications 37 Republic of Indonesia Law No. 17/2007 on Long-term National relevant to disaster and climate resilience. This focused on address- Development Plan of 2005-2025. (link) ing the most prevalent risks on the road network, such as slope ero- sion and landslide protection, drainage system improvements, and 38 WINRIP was closed on June 30, 2021. other priority areas. P. 4 3 Recommendations The table below provides a summary of the proposed recommenda- tions, implementation timeframe, and the responsible stakeholder: TABLE 5 SUMMARY OF RECOMMENDATIONS: STRENGTHENING CLIMATE RESILIENCE FOR ROAD AND BRIDGE INFRASTRUCTURE Suggested Recommendations Implementation Responsible Timeframe Stakeholder Improve data, analytics, and planning, including across jurisdictions Increase the amount and quality of DRM-related information on roads and bridges Medium GoI, BNPB, (including the criticality of this infrastructure) by enhancing data collection systems MPWPH, and and practices and strengthening the collaboration between the BNPB and the DGH. DGH Increase awareness of the usefulness of natural disaster risk maps. Short MPWPH and DGH Intensify post-disaster investigation to better understand the impact of natural Short-Medium DGH and Balai disasters and climate change on road and bridge infrastructure. offices Line ministries to incorporate existing hazard risk information into the planning and Short-Medium DGH, MPWPH, design of critical assets and infrastructure. and Balai offices Improve technical guidelines, standards, and practices Revise DGH technical guidelines and specifications by incorporating most of the Short DGH and enhancements proposed under the abovementioned technical assistance to MPWPH address roadside slope failures along the road and bridge infrastructure. Incorporate climate and disaster resilience into spatial plans and building codes to Short-Medium BNPB, MPWPH, reduce risks of assets and people to hazards. and DGH Strengthen construction supervision practices by (i) mobilizing additional resources Medium-Long MPWPH, DGH, to provide intensive and independent technical supervision of civil works and (ii) and MoF adopting a supervision-friendly design. Develop sector-specific investment prioritization tools to better inform decision- Medium-Long DGH, MPWPH, making and funding. MoF, and Balai offices Implement a systematic regime of regular upkeep and maintenance (with adequate Medium-Long DGH, MPWPH, budget allocations) based on asset vulnerability and level of deterioration. and Balai offices Create business incentives and establish strict monitoring mechanisms to yield Medium-Long DGH, MPWPH, compliance with regulations and policies. MoF, and Balai offices Improve funding for enhancing resilience Enhance Balailevel budget planning and funding to provide flexibility to respond to Medium-Long MoF, DGH, and disaster situations and to high-priority maintenance and monitoring activities. Balai offices Establish PPP schemes to increase investment by private entities in resilient Medium-Long MoF, DGH, and infrastructure. Balai offices P. 4 4 References Alam, M.M., and Y. Lee (2021). “Cleaner Vehicles and Charging Infrastructure: Greening Passenger Fleets for Sustainable Mobility.” The World Bank, Washington, D.C. Ardila-Gomez, A., B.B. Alves, and J. Moody (2021). “Decarbonizing cities by improving public transport and managing land use and traffic.” The World Bank, Washington, DC. California Air Resources Board (CARB) (2022). “On Road Heavy-duty Funding Opportunities” (link). 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