New Era Bali Kerthi Economic Roadmap A Transformative Green, Resilient and Prosperous Path

Bali was at the epicenter of the global fallout from the pandemic. Tourism and related activity accounted for 60% - 80% of Bali’s economic activity. This tourism activity fell to almost zero overnight with the onset of Covid 19. Bali’s economy experienced the deepest contraction and recovered the slowest compared to elsewhere in Indonesia. Bali’s less resilient economic structure called for a new strategy for Bali’s economy through economic transformation.

The pandemic has, however, opened the door to a new development path. On December 3rd 2021, Kura Kura Bali hosted at its Three Mountains bamboo pavilion, President Joko Widodo who announced the launch of the New Era Bali Kerthi Economic Roadmap and the 2022 G20. Kura Kura Bali – Island of Happiness is a 500-hectare property development located 15 minutes away from Bali’s Airport. Kura Kura Bali has worked closely with the Government to build a project aligned with Indonesia’s long term development goals. Collaborating on a regular basis with governmental agencies, Kura Kura Bali has been recognized as having the potential of becoming the prototype for technological transformation and sustainable development towards the New Era Bali.

Under its new strategy, Bali will pivot from primarily tourism to attracting and nurturing global and local enterprises in health, knowledge, digital, green and blue sectors, sustainable and blended finance, integrative infrastructure and quality tourism under a National Plan Roadmap. The Ministry of National Development Planning in collaboration with the Provincial Government of Bali prepared the Roadmap of Bali “Kerthi” Economy for A New Bali Era: Green, Resilient, and Prosperous. This roadmap reflects local traditions and especially the local wisdom and the spirit of the Hindu teachings of the Balinese Tri Hita Karana philosophy of balance between people, nature and spiritual peace.

Bali Economic Transformation is a process of economic development that includes six strategies.

Kura Kura Bali has worked closely with the Government to build a project aligned with Indonesia’s long term development goals. Collaborating on a regular basis with governmental agencies, Kura Kura Bali has been recognized as having the potential of becoming the prototype for technological transformation and sustainable development towards the New Era Bali.

2. Productive Bali, through a strategy of increasing workers’ productivity towards middle class workers, modernizing agriculture, modernizing marine and fisheries, increasing industrialization, strengthening the tourism sector, developing the creative economy and strengthening MSMEs and the tourism sector, Bali’s workforce productivity will increase by three times of the average productivity for 2015-2019.

3. Green Bali, through the scenario of implementing ambitious climate change mitigation and adaptation policies, so as to achieve a reduction in Green House Gases at the Net Zero Emission level by 2060 or faster, and employment growth in the green economy sector is predicted between 50,000 to 100,000 new jobs.

4. Integrated Bali, will focus on improving connectivity facilities and infrastructure, developing Bali as an air logistics hub, strengthening Bali-Nusra cooperation and developing innovative infrastructure financing schemes.

5. Bali Smart Island, will focus on strengthening digital infrastructure, increasing digitally skilled human resources, developing various digital public and private services and digitizing Bali’s economy, including digitizing MSME start-ups and the creative economy, and developing digital tourism services.

1. Smart and Healthy Bali, through the transformation of development of health and education that aims to increase the productivity of Bali’s human resources. Improving the quality of human resources through the strategy of realizing healthy and nutritious human resources, competitive human resources with strong character and creative as well as innovative human resources.

6. Conducive Bali, through strengthening enablers or long-term economic growth levers, i.e.: regional financial aspects, business financing aspects, from the ease of doing business, and aspects of bureaucratic reform, as well as improving governance and institutions.

Bali has always been a global destination of choice. It will now lead the world in a new direction; a direction that offers hope for our children and grandchildren.

Responding to the climate crisis, organisations around the world are making ambitious pledges to reduce carbon emissions in the coming decades. Massive amounts of financial capital are also being promised to fund decarbonisation. But, for a climate catastrophe to be averted, capital must be correctly allocated to truly green projects and organisations must actually deliver on their pledges. This requires rigorous, auditable, and dynamic corporate carbon accounting. The current global protocol for carbon reporting is focused on static, qualitative disclosures, not fluid, quantitative accounting. The E-liability Institute has been created to work with companies, regulators, and governments to advance easier, real-time carbon accounting and auditing.

THE PROBLEM:

The current global carbon standard, the GHG Protocol, was designed in the early 2000s to inspire organisations to action, but not to hold them to account. For instance, the standard allows companies to use industry-average metrics in reporting on their own climate performance, obviating any incentive to compete and deliver on climate excellence. The standard also permits multiple-counting of emissions and offsets, potentially misleading users and misallocating green capital to underproductive investments.

THE SOLUTION:

To address these shortcomings, we, two professors from Harvard and Oxford universities, developed a rigorous accounting approach, the E-liability method, for corporate climate reporting. The method uses a decentralized, recursive algorithm to calculate a product’s carbon footprints as it travels down a supply chain, from “cradle to gate.” The process is analogous to how the monetary cost of a purchased product reflects the prices of all the resources used in its production and distribution. The decentralized algorithm requires only local knowledge at each node of a value chain, in contrast to the top-down approach implicit in the current the GHG Protocol standards. Transparent assurance can be provided at each decentralized node through recent advances in IT, especially blockchain technology. The publication of the E-liability method in a 2021 Harvard Business Review article won the 2022 McKinsey Prize for “groundbreaking management thinking.”

The E-liability approach allows every purchaser – whether a company acquiring a batch of cement, a consumer buying a movie on their tablet, or a green investor looking for their next project – to see the total carbon emitted into the atmosphere in creating that specific product. For a product, that would include the emissions from mining all its raw materials, plus all further processing and transportation emissions, down to emissions from last-mile delivery.

An ASEAN-based company, Giti Tires, was the first to pilot the E-liability approach. It calculated the total emissions to produce a standard passenger-car tire, a product that is both crucial to the global economy and, given its high carbon-footprint, one where emissions-reduction excellence will be essential to fighting climate change. Going forward, as India assumes the G20 presidency, the Mumbai-based Tata Steel company has also initiated an E-liability pilot for both its domestic and European operations.

Unlike a standard and static product life-cycle emissions report, which some companies currently produce about every three years, the E-liability approach produces dynamic, real-time reports on all of a company’s products, based on its current processes, sourcing, and designs. The E-liability approach provides strong incentives for innovations in real-time carbon reduction. For instance, as part of its pilot, Giti Tires will now collaborate with its steel suppliers to learn how to source low-emission, high-durability steel cord that reduces fossil-fuel usage over a car’s lifetime operations.

Beyond Giti and Tata, other leading organisations in cement, energy, healthcare, and IT are also piloting the E-liability approach. To rapidly ramp up adoption of this method and to communicate learnings with corporations, universities, and the public sector, we have created the global, not-for-profit E-liability Institute. The institute will create an ecosystem for rigorous carbon accounting worldwide, which will enable the creation of well-functioning green-finance and carbon-sequestration markets. The institute will work with organisations that voluntarily embrace the method and with rule-makers, such as the GHG Protocol, the International Sustainability Standard Board, and the US Securities and Exchange Commission. The E-liability Institute was announced at the THK Forum Future Knowledge Summit as a G20 official side event with a partnership signing to collaborate with UID Bali Campus in the Southeast Asia Region.

GET INVOLVED:

The E-liability approach is the only known method that can encourage bold innovation in climate-friendly processes whilst also producing fully auditable carbon accounting reports, a necessary condition for holding organisations accountable for their NetZero pledges. Accurate and timely carbon

Production Process

accounting will motivate commercial companies, not-for-profits such as educational and healthcare systems, and government agencies to decarbonise their own operations and those of all their suppliers.

We ask each G20 member-state to designate one official as your principal liaison to the E-liability Institute, to ensure that leading organisations in your country receive this urgent

2022

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