VZCZCXRO9868
RR RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2611/01 2610119
ZNR UUUUU ZZH
R 180119Z SEP 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 6307
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 0811
RUEHBJ/AMEMBASSY BEIJING 4320
RUEHBY/AMEMBASSY CANBERRA 1190
RUEHUL/AMEMBASSY SEOUL 4200
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 002611 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR A/S HILL, EAP/MTS AND EB/IFD/ODF 
DEPARTMENT FOR OES/IET and OES/ETC 
USAID FOR CBARBER, MMELNICK 
DOE FOR A/S HARBERT, CUTLER/PI-32, GILLESPIE/PI-42 
NSC FOR CEQ CONNAUGHTON, VAN DYKE 
DEPT PASS USTR FOR DBHATIA AND DKATZ 
 
E.O. 12598: N/A 
TAGS: SENV KGHG EAID ECON PGOV ID
SUBJECT: U/S DISCUSSES INDONESIA'S ROLE IN COP 13, CLEAN ENERGY, 
BIOFUELS DEVELOPMENT 
 
 
¶1. (SBU) Summary.  During his visit to Indonesia September 10-12, 
U/S Jeffery held a roundtable lunch on September 10 with GOI 
officials, donor representatives ad private sector representatives. 
The head of Indonesia's COP 13 steering committee said that the GOI 
would await the outcomes of the U.N. and Major Economies meetings 
later this month before finalizing a non-paper on COP 13 agenda 
items, and expressed interest in advanced clean energy technologies. 
 U/S Jeffery, Ambassador Hume, and other roundtable participants 
agreed on the importance of renewable energy and affordable clean 
technologies in addressing climate change.  Participants 
acknowledged the challenge of balancing palm oil expansion and 
biofuels development plans with forest conservation and other 
environmental concerns.  End Summary. 
 
Indonesian Expectations for COP 13 
---------------------------------- 
 
¶2. (SBU) U/S for Economic, Energy, and Agricultural Affairs Reuben 
Jeffery discussed energy security, climate change, and 
deforestation, with a group of GOI officials, donor representatives 
and members of the private sector on September 10.  Agus Purnomo, 
Executive Director, Indonesian National Steering Committee for the 
Conference of Parties 13 (COP 13), described the four main agenda 
items for the COP 13: a post-2012 mitigation strategy, an adaptation 
funding mechanism, reducing emissions from deforestation and 
degradation, and technology transfer. He noted that the Ministry of 
Environment (MOE) would circulate a non-paper on these items for 
discussion at the pre-COP 13 ministerial in Bogor, October 24-25. 
The MOE will wait until early October to finalize the non-paper, 
because the upcoming U.N. meetings and Major Economies Meeting (MEM) 
will be influential in shaping the debate.  Purnomo stated that, as 
host to COP 13, Indonesia intends to adopt a publicly neutral 
approach to all proposals, whether on mandatory versus 
"aspirational" emissions reduction goals or new carbon trading 
schemes.  Indonesia wants to see a consensus forged at Bali on a 
post-2012 agreement that includes ideas from both developed and 
developing countries. 
 
¶3. (SBU) Responding to a question from Purnomo about how to 
negotiate practically on energy intensity levels, U/S Jeffery 
emphasized that one of the foci of the MEM would be the issue of 
measurement and standards.  He agreed that Bali's outcome would be a 
package of solutions that included both intermediate steps and 
long-term goals.  Purnomo stressed the need for new mechanisms 
besides the Clean Development Mechanism for a post-2012 world, 
noting that existing alternative market-based mechanisms are 
incipient and far too small.  U/S Jeffery affirmed the importance of 
renewables in the climate debate, and emphasized that all these 
issues would be discussed at the U.N. and MEM. 
 
Indonesia Prefers Non-Nuclear Energy Alternatives 
--------------------------------------------- ---- 
 
¶4. (SBU) Luncheon participants discussed Indonesia's policy on 
renewable energy, including geothermal, hydropower, nuclear energy 
and advanced coal power technology.  Purnomo noted that the 
government is pursuing a nuclear power facility in central Java.  He 
added, however, that the government also places a high priority on 
developing its vast potential for renewable energy, such as 
geothermal.  He expressed the GOI's interest in advanced coal 
technology - "clean coal" and carbon capture and sequestration -- 
but raised concerns about the high cost of the technology, asking 
about affordable financing mechanisms. 
 
¶5. (SBU) The head of the National Biofuel Development Team, Alhilal 
Hamdi, noted that GOI energy pricing policy, which subsidizes fossil 
fuels, has been an impediment to development of renewables.  He 
asserted that the GOI is in the process of improving the incentive 
structure and refining mandatory biofuel use requirements to 
encourage growth in this area.  In response to the question whether 
palm oil profitability depended upon the clearing of forested land, 
Hamdi emphasized that profitability was high without any timber 
sales.  Thus, there is ample opportunity for the industry to expand 
in already degraded land and be highly profitable, addressing 
 
JAKARTA 00002611  002 OF 002 
 
 
concerns about the environmental impact of oil-palm plantation 
expansion into forest land.  He highlighted the importance of 
biofuel's advantages in job creation and poverty reduction.  A World 
Bank representative and a biofuel private sector executive in 
attendance also acknowledged the tension between oil-palm plantation 
expansion and forest conservation, and pointed to ongoing efforts to 
develop a biofuels certification that addresses these concerns. 
Hamdi also highlighted the opportunities to develop jatropha-based 
biofuel in arid soils, explaining that Indonesia needs assistance in 
research and development to scale up and maximize yields, similar to 
past efforts devoted to oil palm. 
 
¶6. (U) U/S Jeffery cleared this cable. 
 
HUME