Ecba 2 ksn mamminasata technical report by Green Growth Program

Green Growth Assessment of Kawasan Strategi Nasional Mamminasata, South Sulawesi Technical Report

Component 1B: Green Growth Assessment of Capital Projects Government of Indonesia -GGGI Green Growth Program

September 2014

Table of Contents EXECUTIVE SUMMARY .................................................................................................................................. 4 GLOSSARY.................................................................................................................................................... 14 1 INTRODUCTION .............................................................................................................................. 15 2 THE KSN MAMMINASATA DEVELOPMENT .................................................................................... 23 3 OPTIONS FOR DELIVERY ................................................................................................................. 27 4 METHODOLOGY ............................................................................................................................. 31 5 SCOPE OF ANALYSIS ....................................................................................................................... 38 6 RESULTS ......................................................................................................................................... 46 7 POLICY IMPLICATIONS ................................................................................................................... 62 APPENDIX 1: TECHNICAL NOTES FROM STAKEHOLDER VALIDATION WORKSHOP .................................... 66 APPENDIX 2: DISCOUNTED COST BENEFIT ANALYSES ................................................................................ 67

GoI-GGGI Green Growth Program Our joint Government of Indonesia (GoI) and Global Green Growth Institute (GGGI) goal “To promote green growth in Indonesia that recognizes the value of natural capital, improves resilience, builds local economies and is inclusive and equitable”. To achieve this, GGGI provides technical support, research and capacity building that is in line with GoI’s vision and direction Our objectives The specific objectives of the GoI-GGGI Green Growth Program are: 1. To ensure the green growth vision matches or exceeds existing development targets; 2. To track the green growth priorities of Indonesia by providing relevant targets and indicators; 3. To evaluate the implications of the country’s current development path against green growth targets and indicators and assessing projects and potential policy and investment interventions against this baseline; 4. To identify the key sectors and high potential green growth projects and investment interventions that will help deliver green growth development; 5. To harness private sector engagement and investment in support of delivering green growth opportunities in Indonesia; 6. To undertake economic modeling to analyze each project showing their financial returns and identifying any gaps in the incremental spend required to secure green projects. How GoI and GGGI will meet these objectives The program has three complementary work components: “To mainstream green growth within Indonesia’s economic and development planning processes”

Greening the planning process

REDD+ for green growth

“To support the development of a funding mechanism that disburses REDD+ finance to catalyze green growth”

Regional engagement

“To support key provincial governments in prioritizing and implementing green growth.

“To increase the use of green technology and increase capital investment in green industry” (GIMS)

The combined work of these components will help to achieve the objectives and the overarching goal of GoI and GGGI.

Executive Summary The Government of Indonesia (GoI)-Global Green Growth Institute (GGGI) Green Growth Program for Indonesia aims to promote green growth in Indonesia that recognizes the value of natural capital, improves resilience, builds local economies and is inclusive and equitable. A fundamental part of this will be mainstreaming green growth within Indonesiaâ&#x20AC;&#x2122;s economic and development planning processes. To this end, GGGI with GoI are developing a framework and suite of tools that can be used by GoI to help embed green growth concepts into existing planning and investment appraisal instruments. Full details of the framework can be found in an accompanying report1, but the essence of the framework is to make Green Growth measurable along the five outcomes outlined in Figure 1 below. These outcomes are interrelated and a positive contribution to one can often simultaneously provide benefits to others. Only by making progress along all of these outcomes can Indonesia plan for inclusive and equitable growth that is sustainable over the course of generations. Figure 1: The 5 Outcomes of Green Growth developed with key stakeholders in Indonesia

Similarly, full details of the range of tools needed to embed green growth within planning processes can be found in accompanying reports2, but at the heart of the suite of tools lies a comprehensive and integrated assessment of the monetary Costs and Benefits of capital projects in Indonesia. This includes, but is not limited to, those projects contained in the Master Plan for the Acceleration of Economic Development (MP3EI).

1 2

GGGI (2015, forthcoming) Delivering Green Growth in Indonesia: A Roadmap for Policymakers. GGGI (2015, forthcoming) Delivering Green Growth in Indonesia: A Roadmap for Policymakers.

This green growth assessment must not only look at financial costs and benefits but economic, social and environmental costs and benefits as well: an Extended Cost Benefit Analysis (eCBA). An eCBA can be used by decision makers in government and the private sector to answer key questions such as:  What is the green growth performance of the project as it is currently designed?  What is the value to the economy, society and the environment of this performance?  How can one re-design a project to improve its green growth performance?  What are the synergies and trade-offs among the different outcomes of green growth in doing this?  How much capital investment is required to achieve this improved performance?  What policy instruments are needed to drive investment and behavioral change? Thus, an eCBA can be viewed as an analytical tool that governments can use to identify the monetary values of public goods, environmental externalities and social returns associated with many projects. In this sense, results of an eCBA can be used as a base of evidence to determine the size of public and private investment flows needed to maximize these values over time. This report is the second in a series performing eCBA on selected capital projects across Indonesia. KSN Mamminasata Project KSN Mamminasata was selected for analysis because it provides the potential to show how the development of a metropolitan area can be undertaken in a more sustainable way. KSN Mamminasata is considered one of the spatial development priorities for National Strategic Zones by the Ministry of Public Works. It has become important since Makassar New Port development under MP3EI was planned to be developed in 2014 under Ministry of Transportation authority with total investment IDR 3,600 billion3. Therefore, for this analysis, we4 have selected KSN (Kawasan Strategi Nasional) Mamminasata. KSN Mamminasata is located in the province of South Sulawesi and covers four areas, including the city of Makassar, and the Gowa, Takalar, and Maros Districts. It is aimed as a growth and service center for the Eastern part of Indonesia as well as for encouraging the development of trade, service, and other investments. Activities in the zone are diverse and include infrastructure development (road, rail, water supply), solid and liquid waste management, reforestation, new settlement construction, industrial and maritime zones, a new university campus and a land reclamation projects (“Center Point of Indonesia”). Stakeholder engagement An important aspect of the e-CBA approach has been the engagement process with key stakeholders involved in the planning and delivery of the project, both locally in South Sulawesi and in Jakarta (eg: Ministry of Public Works). This engagement process has involved a scoping phase to map out and agree the key interventions that could improve the green growth performance of the project, gather data and information that underpin the robustness of the eCBA, and help validate the findings.

Report on MP3EI Implementation Progress in 2013, Coordinating Ministries of Economy, p 64

Throughout this document “we” refers to the project team under the GoI-GGGI Green Growth Program

Figure 2: Overview of Zones of Strategic National Importance in Indonesia, and KSN Mamminasata

In conducting this analysis, several activities were carried out by the project team including:  Identifying the project baseline with the help of project representatives and stakeholders in South Sulawesi  Identifying options to improve Green Growth performance with the help of national and local stakeholders and Green Growth experts  Mapping out impact pathways, linking changes in investment to monetizable impacts on stakeholders  Gathering primary, secondary and international data in order to conduct the eCBA  Validating the assumptions and results with national and local stakeholders. Therefore, a Focus Group Discussion was conducted with government officials in Makassar on the 20th of November 2013 to identify suitable interventions which can support the achievement of a more sustainable metropolitan development. This process was followed up with a number of one to one meetings with key agencies involved in the project planning and implementation, as well a validation process to discuss key findings from the analysis. Methodology While the principles of the methodology are well-established, the application is experimental and this is only the second pilot analysis in a series of analyses to be refined with stakeholders. Despite the best efforts of the team to validate all assumptions and findings with stakeholders, inevitably the results are subject to a degree of uncertainty and many data gaps had to be filled with international proxies. Lastly, the analysis is not meant to be exhaustive, but rather touch on

a number of high impact themes – it is highly likely that further environmental and social enhancement/protection measures could be put in place at KSN Mamminasata.

Based on the scope of the analysis agreed, this green growth assessment includes consideration of three scenarios as follows: 

Baseline Scenario – which is the current position of the Mamminasata Metroplitan Development Plan and likely implications of future development as planned (ie: Business as Usual)



Green Growth Scenario – the anticipated impacts of a number of interventions aimed at improving the green growth performance of the project, based on an assessment of the incremental net benefit of these interventions against the baseline / BAU measured in monetary terms



Green Growth Aspirational Scenario – consideration of a number of additional interventions that could further improve the green growth performance over and above the green growth scenario, but have not been explicitly included in the eCBA due to data and information deficiencies.

In this e-CBA we have sought to improve the Green Growth performance of KSN Mamminasata. This is in order to develop national and sub-national policy recommendations, and is not in any way an opinion on the overall Green Growth performance of the project. That is to say, KSN Mamminasata may or may not be “green” overall, even with the proposed green growth interventions listed here, but it will certainly be “greener”. The specific results of this analysis are therefore not, by themselves, suitable for investment decision making. While effort has been made to use local information wherever possible, data has not been universally available, and international proxies have been used in the analysis. Business implications are drawn without specific reference to the method of financing, tax/subsidy regimes, and construction timelines and capital cost escalati0n. Reference has been made to specific limitations at various points throughout this report. Results Notwithstanding these caveats, the results of the eCBA provide a rich and diverse set of insights. Priority ecological assets provide valuable services to communities, for which there is rarely a market price. Therefore, private individuals deplete the stock too quickly, not accounting for the value of these ecosystem services, and/or not accounting for the rate of natural regeneration of the stock. Over time, these stocks can no longer provide the valuable flows and so become degraded or fully depleted. If these market imperfections were corrected, natural capital would be as stewarded as carefully as financial capital, and the socially optimal amount would be preserved. We estimate the aggregate net benefit generated across the three identified green growth interventions is $355m in Net Present Value terms. In context, this is equivalent to 6% of South Sulawesi’s GRDP, or 19% of government spending in 2012, and represents a benefit-cost ratio of over 6.9.

Table 1: Summary Matrix for Green Growth Policy Interventions and Expected Benefits for KSN Mamminasata

Project Activity

Green Growth Intervention

Net Benefit

BenefitCost Ratio

Landfill Waste Management Takalar Maritime Zone

Municipal Solid Waste (MSW) to Energy through methane gas capture from municipal waste landfill Generating higher value-add fish products through better utilization of fish processing waste to generate higher value added products such as fishmeal and fish oil

$109m

8.9

$96m

6.5

Go Green Program / Reforestation of Jeneberang watershed Clean Water Supply

$150m

6.1

Total

$355m

6.9

These results are the aggregation of more than fifteen different categories of benefit, spread out over the five outcomes of green growth. Some benefit categories are particularly pronounced in the overall results; GHG emissions from the large quantity of avoided methane emissions and carbon absorption from reforestation ($255m); and, Social Development from community income generation from fish processing, stand out in particular ($71m). No single Green Growth intervention dominates the results. Reforestation of the Jeneberang watershed contributes significantly to green growth in this province. Healthy and functioning forested ecosystems in the upstream area contribute to the flow of a variety of ecosystem services such as timber and NTFP provision, firewood and biodiversity as well asthe contribution to climate change through green house gas emission reduction. Reforestation is also responsible for â&#x20AC;&#x201C;important provisioning and regulatory services relevant to the soil-water interface, nutrient cycling, and waste treatment. The downstream water regulation and erosion control to the Bili-Bili dam significantly benefits from this intervention as to reduce dredging costs of sedimentation in the Bili-Bili dam. MSW to energy through greenhouse gas capture provides another win-win green growth example. GHGs are prevented from entering the atmosphere which mitigates against the effects of climate change. Energy is produced from a non-fossil fuel source, which improves energy independence in the local economy and reduces GHG emissions from burning fossil fuels for energy â&#x20AC;&#x201C; the likely alternative. MSW to energy plants clearly need local management which is a driver of the local economy. Higher value added fish products makes better use of natural capital stocks and aligns with an economic growth model of moving down the value chain towards more processing, bringing more of the sector within Sulawesiâ&#x20AC;&#x2122;s borders. See Chapter 6 for a full list of possible impacts. We note that many of the forest related GHG emission reduction could equally be categorized as benefits derived from ecosystem services, as they relate to the carbon sequestration function of standing forests. In turn these forested ecosystems contributes to the resilience of KSN Mamminasata in mitigating soil erosion and system shocks including climate change. In addition, there are a number of other positive contributions which can be derived from these interventions above. These benefits were not captured in the eCBA because data was 8

unavailable. These include: reduced depletion of fragile fish stocks, improved resilience of water system to environmental stress, avoided leachate from landfill waste, job creation and the knockon income-generation and poverty reduction benefits for farmers and fishermen. Figure 3: Investments into three specific interventions can significantly contribute to to the 5 outcomes of Green Growth

Landfill Waste Management: Municipal Solid Waste (MSW) to Energy

Takalar Maritime Zone: Generating higher value-add fish products

Go Green Program / Clean Water Supply: Reforestation of Jeneberang watershed -50 Economic growth

GHG Emissions

0 Ecosystems

100

Social development

150 200 Million USD (2013) Resilience

Note: The Green Growth Framework (5 outcomes) is an evolving document, and will be updated after the publication of this report. This is to allow feedback between the micro-level project analyses occurring over 2 years and the macro-level framework. This eCBA report on KSN Mamminasata may be updated in future to reflect this changes. Outcome of Green Growth

GHG Emissions

Economic Growth

Social Development

Ecosystems

Resilience

Total

Net Benefit

$255m

$22m

$71m

$4m

$2m

$355m

We believe that these results provide a valuable contribution to the evidence base for informed green growth planning, policy and investment decision making in Indonesia, both at national and sub-national levels. We hope that the analysis provides a tangible example of how to quantify and monetize a broad range of impacts at the project-level, and provides inspiration for the practical embedding of the green growth approach into practical planning processes. All feedback and comments are gratefully received by the project team. Policy implications In this e-CBA we identified three interventions whose benefits to society exceed their costs. These interventions may not in practice be undertaken due to a range of market distortions such as externalities, short-termism etc. This is why many of the interventions do not appear to be an attractive proposition for investors when only private cash flows are considered and a more conventional project hurdle rate used (15% for illustrationâ&#x20AC;&#x2122;s sake in our analysis). The specific results of this analysis are therefore not, by themselves, suitable for investment decision making. While effort has been made to use local information wherever possible, data has not been universally available, and international proxies have been used in the analysis. Business implications are drawn without specific reference to the method of financing,

tax/subsidy regimes, and construction timelines and capital cost escalati0n. Reference has been made to specific limitations at various points throughout this report. Although we have not conducted financial appraisals on these potential Green Growth interventions, it is possible to draw broad implications for how these interventions might, or might not, become “investable”. The policy matrix in Table 2 below shows the main barriers to make green growth interventions investable and potential policy remedies. To strengthen the business case a range of potential instruments might be needed, including:     

Green taxes and charges Green subsidies Electricity Feed-in Tariffs Financial guarantees and preferential financing Payments for Ecosystem Services

These will need to be supported by practical policy enablers too, such as education, streamlined permitting processes, inter-Ministerial cooperation and provision of high-quality data for decision making. In some cases it might need to be acknowledged that the Green Growth intervention, while good for society, the economy and/or the environment, is fundamentally financially unviable. In such cases it is important to bear in mind the option for the intervention to be directly and fully financed by the public sector, as crucial Green Growth infrastructure whose long-term benefit outweighs the costs. We believe that these results provide a valuable contribution to the evidence base for Green Growth policymaking in Indonesia, both at national and sub-national levels. We hope that the analysis provides a tangible example of how to quantify and monetize a broad range of impacts at the project-level, and provides inspiration for the practical embedding of green growth theory into practical planning processes. All feedback and comments are gratefully received by the project team.

Table 2: Matrix on Policy Barriers and Enablers of Green Growth Interventions

Activity Landfill waste management

Intervention Waste to energy

Barriers to investability - No market for electricity produced -

Potential enabling measures - Government should guarantee that PLN will take up electricity generated from private IPPs

High tipping fee, making it uneconomical once transport costs taken into account

Reform of energy pricing system (e.g. reform of fossil fuel subsidies / carbon tax / trading scheme)

Insufficient amount of waste due to scavengers waste utilization or 3R programme

Set tipping fee rate by government

Government regulations related to waste management must be clear in order tohave a correct prediction for the amount of waste generated. Scavengers must be appropriately compensated or alternative livelihoods found. Guidance and knowledge sharing on feasibility studies for waste to energy plants. Tax relief for investment in waste to energy equipment Incentives for decentralised power provision Investment in infrastructure Collaboration between planners and PLN Implement Law 41/1999 on Forestry and Public Work Ministerial Decree No 02/PRT/M/ 2013 on Guidelines for Water Resource Management Plan.

Lack of scale. Power company investors may be looking for larger projects such as opportunities for hydropower plants linked to smelters.

Lack of connectivity and infrastructure.

Go Green Program/Clean Water Supply

Forest rehabilitation

Incompatibility of programs related to land use between sectors Opportunity/income loss from forest/land use Land law â&#x20AC;&#x201C; differences between ownership and management parties leads to weak incentives to act Lack of understanding of the forest as a priority ecological asset which contributes to important provisioning and regulatory services relevant to the soil-water interface, nutrient cycling, and waste treatment.

Land use plan must be clear and as intended in Spatial Plan

Incentives/disincentives related to rehabilitation, conservation, management of forest ecosystem services

Takalar Maritime Zone

Fish waste

Competition among fish waste users Lack of equipment to retrieve and process fish waste Lack of capital to invest in equipment Lack of understanding of the possible direct (economic and social) and indirect (e.g. poverty alleviation depending on possible ring fencing of funds) benefits.

Government subsidy per unit waste/pollution reduced

Financial support for local fish meal industry Knowledge and training is needed to improve understanding of the opportunity. East Lombok should be used as a case study where rotting fish is turned into 80 tons per month of feed pellets for fish and chicken. Support for equipment is required to get kick start the program â&#x20AC;&#x201C; ideally aid should provide equipment. Tax reliefs can also be offered for investment in waste to energy equipment. In Lombok, 60% of profit is used for supporting 5 underprivileged children . This kind of ring-fencing of funds can help spread the benefits across green growth outcomes.

USAID, Fish powder production generates income and promotes zero waste in East Lombok, 2014

Glossary Acronym

Explanation

c.i.f

Cost insured freight

CO2

Carbon Dioxide

DED

Design Engineering Document

eCBA

Extended Cost Benefit Analysis

f.o.b

Free on board

GGA

Green Growth Assessment

GGAP

Green Growth Assessment Process

GGF

Green Growth Framework

GGGI

Global Green Growth Institute

GHG

Green House Gas

GoI

Government of Indonesia

Hectare

KIMA

Industrial Zone Mamminasata

KSN

Kawasan Strategi Nasional (in this context, National Strategic Zone)

LCOE

Levelized Cost Of Electricity

MCA

Multi Criteria Analysis

MSY

Maximum Sustainable Yield

Megatonne (1 million tonnes)

Cubic meters

NPV

Net Present Value

PDAM

Perusahaan Daerah Air Minum (Water Utilities)

PDD

Project Design Document

PwC

Pricewaterhouse Coopers

TPA

Landfill waste site

SCBA

Social Cost Benefit Analysis

SDR

Social Discount Rate

SOC

Social Opportunity Cost

1 Introduction Indonesia Green Growth Program The Government of Indonesia and Global Green Growth Insittute (GGGI) have developed a program of activity that is aligned and wholly supportive of achieving Indonesia’s existing vision for economic development planning. The aim is to show, using real examples of Indonesia’s development and investment plans at national, provincial and district levels, how economic growth can be maintained while reducing poverty and social inequality, maximizing the value of ecosystem servces, reducing GHG emissions, and making communities, economies, and the enviroment more resilient to economic and climate shocks. The over-arching goal of the Government of Indonesia (GoI)-Global Green Growth Institute (GGGI) Green Growth Program for Indonesia is to promote green growth in Indonesia that recognizes the value of natural capital, improves resilience, builds local economies and is inclusive and equitable. The program has a number of specific objectives (see inside front cover), and three complementary components: 1.

Greening the Planning process. Aim: “To mainstream green growth within Indonesia’s economic and development planning processes” and “To increase the use of green technology and increase capital investment in green industry”

2. REDD+ for green growth. Aim: “To support the development of a funding mechanism that disburses REDD+ finance to catalyze green growth” 3. Regional engagement. Aim: “To support key provincial governments in prioritizing and implementing green growth” This report supports Component1 in mainstreaming green growth in planning processes. As part of this component, the GoI and GGGI are developing a framework and suite of tools that can be used by GoI to help embed green growth principlesinto existing planning and investment appraisal instruments and processes. Mainstreaming green growth in planning processes Currently there is no single, internationally accepted analytical framework or set of indicators to monitor green growth performance6. As a starting point, GoI and GGGI have initiated a discussion with key stakeholders on what represents an appropriate framework to define what green growth means to stakeholders in Indonesia. Green growth planning needs to be undertaken in an integrated manner and on a comprehensive basis. It is important to understand the interdependencies between the country’s economic competitiveness drivers and their implications for social development and environmental performance.

A Green Growth Framework (GGF) is being developed which brings together a set of social, economic and environmental indicators across 5 outcomes of green growth. These are all quantifiable and measurable, and provide a relevant framework for Indonesia to think about

Green Growth Knowledge Platform, 2013

what Green Growth means to the country and the desired outcomes to be achieved through Green Growth. These indicators serve 3 purposes for government: 1.

Diagnostic indicators: designed to assess the overall sustainability of Indonesia and to identify key issues that should be considered in the mainstreaming of the green growth Planning process;

2. Planning indicators: designed in accordance with the Pressure-State-Response approach and so useful for assessing the cause-effect linkages between sustainability issues highlighted by diagnostic indicators and their pressures and impacts; 3. Monitoring and Evaluation indicators: designed to help track green growth progress and performance of Indonesia. Indicators can either measure stocks (capital, output or quantity of an asset, such as human or natural capital that a country has at a given point in time) or flows (measures how the stocks in a country are being used, such as GDP). Indicators can be applied at different levels too, including at the national, regional, sectoral and micro (project) levels (see Figure 4). All indicators within this report fall under the category of â&#x20AC;&#x153;project-levelâ&#x20AC;? indicators. In a number of cases, an activity may contribute positively to multiple outcomes of Green Growth (synergies), or improve one at the expense of another (trade-offs). For example, investment in expensive renewable technologies may be a drag on economic performance but reduce GHG emissions (trade-off). Similarly, preservation of natural capital boosts ecosystem service functions and may also contribute to inclusive growth for local communities (synergy).

Figure 4: The 5 Dimensions of Green Growth developed with key stakeholders in Indonesia Macro indicators can draw data from micro, project level indicators

Macro, national / province level

Micro, project level

Greenhouse gas emission reduction Social, economic and environmental resilience

Inclusive and equitable growth

Green Growth

Sustained economic growth

Indicators

Healthy and productive ecosystems providing services

National, province and district level indicators for monitoring, evaluation and target setting

Project indicators improve awareness of breadth of project impacts and can be used for monitoring and evaluation

This Green Growth Framework can support decision making and prioritization of economic planning instruments, across national and sub-national government. A key part of decision making in this context is the selection and improvement of capital projects, such as those found in the Master Plan for the Acceleration of Economic Development (MP3EI). The GOI together with the GGGI is developing a tool to help operationalize the GGF within government and measure the green growth performance of investments. This tool is called the Green Growth Assessment Process (GGAP). GGAP is a 9-step process using indicators specific to projects, sectors, districts, provinces and Indonesia as a nation, as well as a range of other tools, and can be used by government:   

To allocate resources to the projects with the highest green growth potential; To re-design and optimize publicly-funded projects; and, To build a business case for projects with green growth benefits in order to attract private investment.

A full overview of the GGF and GGAP is available in an accompanying report7, but in brief the GGAP is fed with proposed capital projects from different government economic development strategies and sectoral development plans, and applies indicators under the GGF to prioritize those that contribute most to Green Growth. Different design options for this shortlist of prioritized investments undergo a Green Growth Assessment. For the purpose of capital project assessments we apply an Extended Cost Benefit Analysis (eCBA) methodology. The eCBA is intended to provide a holistic and comprehensive understanding of the impacts of investments through a focus on the measurement and valuation of their green growth implications in rigorous, economic terms. It is

GGGI, Green Growth Assessment Methodology Paper, January 2014

often used in the application of Multi Criteria Analysis (see page 14), providing the social, economic and environmental valuations needed to make decisions. Based on the results of the eCBA, and ongoing monitoring of Green Growth performance, aspects of these investments can potentially be re-designed. The identification of potential project re-designs can help inform policy developments and other enablers. This paper is the second in a series of papers conducting Green Growth Assessments on a range of individual capital projects. For this reason, it is subject to revision as the results of the series influence the macro framework for assessment. Green Growth Assessment Within the Green Growth Assessment of Capital Projects, eCBA is the key methodology used to value social, economic and environmental costs and benefits. Cost Benefit Analysis (CBA) is a toolkit used by economists and other decision makers to evaluate the desirability of a policy or project by systematically comparing costs and benefits. These costs and benefits are measured in terms of “social welfare”. Social welfare is a technical term used by economists to measure the ‘utility’ of a population, as opposed to “private welfare” which is just the utility of the individual. Social welfare includes all economic (material goods), social (community cohesion), and environmental (ecosystem services) benefits that an economy, society and nature provide. In practice, calculating social welfare entails focusing on measurable economic costs and benefits, and including social and environmental factors not accounted for in market prices. We use the term Extended CBA (eCBA) to emphasize that our methodology assesses these nonmarket, social and environmental externalities as much as is practical (in this context, eCBA is similar to Social Cost Benefit Analysis (SCBA), but extended to take account of redesign options for the project to improve its green growth performance). An eCBA provides evidence for decision makers to inform decisions on whether a project should go ahead. In terms of the eCBA, if the total benefits exceed the total costs, then the project can be considered to be justified in net social welfare terms although the decision to proceed will inevitably be subject to a wider range of considerations (such as affordability). But, private investors will usually only take forward projects where the private benefits exceed the private costs. Due to the presence of market imperfections and “missing” markets (e.g. ‘public goods’ such as clean air), private incentives are not always aligned with achieving optimal social outcomes. Therefore, a key objective of the eCBA is to cast light on the difference between these and suggest policies to help align them. Many OECD-nation governments (e.g., the US, UK8) as well as multi-lateral institutions (e.g., the EU, World Bank, European Investment Bank9) require a Cost Benefit Analysis to justify substantial public expenditure outlays and/or policy action.

HM Treasury (2003) Green Book Guide to Appraisal and Evaluation in Central Government. Shapiro (2010) The Evolution of Cost-Benefit Analysis in U.S. Regulatory Decision making 9

European Investment Bank (2013) The Economic Appraisal of Investment Projects at the EIB. World Bank Operational Manual (1994) OP 10.04 - Economic Evaluation of Investment Operations. EU regional Policy (2008) Guide to Cost Benefit Analysis of Investment Projects [Projects applying for more than €10-50m (depending on project type) of financial assistance from the EU Cohesion Policy funds are subject to a mandatory CBA.]

The practical process of conducting an eCBA requires 6 stages as outlined in Figure 5: Stages in conducting eCBA below. The production of the eCBA contained in this report has involved all of these stages over a 3-month period, for the KSN Mamminasata development in South Sulawesi. Figure 5: Stages in conducting eCBA Stage 1

Identify project baseline

Stage 2

Identify Green Growth options

Stage 3

Stage 4

Map Impact Pathways

Collect data

Stage 5

Cost Benefit Analysis

Identify and consult project stakeholders

Consult project stakeholders

Identify outputs, outcomes and impacts

Collect data from project documentation

Value costs and benefits of green growth interventions

Review project documentation

Consult experts

Assess materiality

Collect local market data

Consider implications of results for policy

Literature review

Identify scope for eCBA

Collect international technology data

Consider implications for project re-design and investment

Establish project rationale and need

Stage 6

Validate Findings

Validate findings with stakeholders

The Mamminasata Development KSN (Kawasan Strategi Nasional, National Strategic Zone) Mamminasata is located in South Sulawesi Province and covers four areas, including the city of Makassar, and the Gowa, Takalar, and Maros Districts. It is aimed as a growth and service center for Eastern part of Indonesia as well as for encouraging the development of trade, service, and other investments. A detailed overview of the development is provided in Section 2. KSN Mamminasata was selected for analysis because it provides potential to show how the development of a metropolitan area can be undertaken in a more sustainable way. KSN Mamminasata is considered one of the spatial development priorities for National Strategic Zones by the Ministry of Public Works. It has become important since Makassar New Port development under MP3EI was planned to be developed in 2014 under Ministry of Transportation authority with total investment IDR 3,600 billion10.

Report on MP3EI Implementation Progress in 2013, Coordinating Ministries of Economy, p 64

Figure 6: Map of Sulawesi, highlighting Mamminasata Metropolitan Development in the province of South Sulawesi

Mamminasata Metropolitan Development

Understanding the Results In this report we identified interventions which could significantly contrube to green growth. We calculated the costs and benefits of different interventions for the Mamminasata Development which if invested in, could improve its green growth performance benefiting society in a variety of ways. The scope of analysis considers the incremental benefits, relative to the existing baseline scenario for KSN Mamminasata as set out in the Masterplan and Engineering documents. The baseline itself has not been subjected to an eCBA). Therefore, the headline number does not say anything about whether KSN Mamminasata overall is positive or negative, only that through investment in a range of interventions, the KSN can improve its green growth performance. While we provide recommendations on “greening” the project, it is ultimately a policy decision whether a project is “green enough”. Figure 7: Scope of this report – incremental costs and benefits

Greening the project appraisal process with eCBA Cost Benefit Analysis is part of a broader project appraisal process. A stylized overview of a typical current project appraisal process in Indonesia is outlined in Figure 8: Steps in the project appraisal process, and explained underneath. Figure 8: Steps in the project appraisal process

Stage 1

Feasibility and options analysis • Market appraisal • Technical appraisal

• Simple financial and/or economic CBA

Stage 2

Financial analysis • Appraisal of financial costs and benefits

Stage 3

Cost Benefit Analysis

Stage 4

Multi Criteria Analysis

• Integrating and scoring qualitative and quantitative • Complementary Socio- data Economic Impact Assessment • Appraisal of social costs and benefits

Stage 5

Environmental Assessment

• AMDAL / RKL / RPL

• Complementary Strategic Environmental Assessment

There is a ‘natural home’ for eCBA in Indonesia, to take place after the financial appraisal of a project and before the AMDAL. For maximum impact, the eCBA should be combined alongside other Green Growth tools such as Green Project Prioritization tools, Strategic Environmental Assessment and impact assessment techniques. The aim of the eCBA in this report is to test the tool in development on a real life project and to contribute to the evidence base for Green Growth policy in Indonesia, highlighting potential options for improving Green Growth performance but more importantly demonstrating that valuing the wider implications of decision making, and internalizing them into the project appraisal process, can lead to improved policy outcomes. The eCBA does not substitute for a full feasibility analysis and financial appraisal. The specific results of this analysis are therefore not, by themselves, suitable for investment decision making. While effort has been made to use local information wherever possible, data has not been universally available, and international proxies have been used in the analysis. Business implications are drawn without specific reference to the method of financing, tax/subsidy regimes, and construction timelines and capital cost escalati0n. Reference has been made to specific limitations at various points throughout this report. Investment in the suggested green growth interventions would require additional analysis to validate the financial viability of these interventions at a site-specific level, based on primary data, as well as the need to consider detailed social, economic and environmental implications of implementation at site-specific level.

Structure of this report The rest of this report is structured as follows:

Section 2 provides an overview of KSN Mamminasata

Section 4 provides details of the methodology and reporting framework used in this report

Section 5 provides a detailed overview of the scope of analysis

Section 3 provides different options for delivery and introduces the Green Growth scenarios

Section 6 presents the quantitative results of the Cost Benefit Analysis Section 7 outlines some policy implications of the results Appendix 1 provides technical feedback from a workshop with local stakeholders Appendix 2 provides detailed calculations from the eCBA model

2 The KSN Mamminasata Development Background and strategic rationale KSN (Kawasan Strategi Nasional) Mamminasata Metropolitan Development is aimed at stimulating economic, social, and cultural development, defense and security, and the integration of spatial organization of national, provincial, district/city in Eastern part of Indonesia. KSN Mamminasata is located in the province of South Sulawesi and covers 4 regions namely the City of Makassar, and Maros, Gowa (Sangguminasa), and Takalar districts. It is being developed based on Mamminasata Spatial Plan (2003-2012) covering an area of 246,230 hectares. The implementation is regulated under the Presidential Decree No. 55 of 2011 on Spatial Planning of National Strategic Importance Mamminasata. As a regional driver of the Eastern part of Indonesia, Mamminasata already has adequate infrastructures such as an international airport, international sea port, and transport infrastructures that connects nodes residential areas, industrial areas, and office building (including the new town development planned for the center of Makassar). Several strategies have been developed to realize the development of the KSN Mamminasata. These are manifest in 12 priority development programs, outlined in Table 3 below. Table 3: Mamminasata Priority Development Program

No 1

3 4

5 6 7 8 9 10

Project Activity Description Mamminasata Metropolitan Development of arterial roads including the Trans-Sulawesi Road Network Development highway, Hertasning, Abdullah Daeng Sirua, and Mamminasata Bypass Mamminasata Regional Regional waste management including the construction of Landfill Waste Management a sorting plant, landfill and composting (TPA Patallassang, heavy equipment, access roads, support facilities, and transfer stations Clean water supply Clean Water supply from Bili-Bili Dam and other rivers Liquid Waste Management The construction of a Waste Water Treatment Plant in Makassar (IPAL Losari) is expected to take place, with a capacity of approximately 3.65 million cubic meters of greywater year. This compares to an estimated 51 million m3/year of greywater currently generated in Makassar city alone.11 Go Green Program Promotion of green areas and parks with a target of increasing green areas to 25,000 ha New Town Development A New Town Development includes Gowa and Maros and covers 3,500 ha Drainage Drainage service area and flood prone areas in the East Makassar and Maros Industrial Zone Construction of Maros Industrial Estate (KIMA 2) in Maros area (566 ha) Hassanudin University (New Relocation of Technical Faculty to Bontomarannu, Gowa campus) (Mamminasata Education Zone) Takalar Maritime Zone Development of Takalar Maritime Zone including the

Estimated based on 70% of PDAM water supply capacity of 73 million m 3/year in 2010

development of fish catching facilities, research center, fish nurseries, fish product industrial zone and port. 11 Monorail Development Construction of a monorail in the Mamminasata area 12 “Centerpoint of Indonesia” There is a land reclamation project extending out from the center of Makassar, on which it is planned to construct government offices, recreational facilities, a Mosque, hospital, and green open spaces. Note: Activity 12, Center Point of Indonesia is not included on the list of 11 priority programs in the KSN Mamminasata Masterplan but is included in other project documents as a key project activity.12 These twelve programs are still at the preparatory stage and have been subject to planning efforts for some years. The Japanese International Cooperation Agency (JICA) has provided intensive assistance in developing Mamminasata since 2005. As a regional driver of the Eastern part of Indonesia, Mamminasata already has major infrastructure such as the international airport, international seaport, and industrial areas. But, supporting the broader success of the Mamminasata development in future are a variety of additional enabling infrastructure facilities, including: 

Transportation network system



Energy network system



Telecommunication network system



System of water supply networks which include: water supply system, drainage network system, sewerage system and waste management system

For this report, we have concentrated on the project activities for which we are able to obtain (reliable) information and with potential re-design and poicy interventions, could signficantly contribute to green growth. These core activities are outlined in Table 4 below. Table 4: Key project activities of the Mamminasata Development considered for analysis

Project activities Description Go Green Program / Clean The Go Green Program aims to re-forest primarily urban areas of Water Supply KSN Mamminasata.

Landfill Management

At the same time, Mamminasata is considering ways to boost the supply of clean water to residents, which is currently rationed to specific time slots during the day. The main source of water for Makassar is the Jeneberang river, on which sits the Bili-Bili dam (1,200m3 – 2,200m3/second). The dam is currently subject to serious sedimentation largely due to upstream deforestation. Waste The Pattallassang Regional Landfill covers an area of 98.2ha, and is planned to be built with a capacity of 5 million m3 of waste each year. It was designed to serve from 2012 to 2030, although construction has not yet begun. It is now expected to become

Source: EIA Center Point Of Indonesia, Public Works Agency of South Sulawesi

operational after 2016. TPA Pattallassang replaces TPA Tamangapa (a CDM-registered landfill site flaring waste, due to close in 201613). Takalar Maritime Zone

The Maritime Zone is expected to centralize fish landing and processing activities for South Sulawesi (which accounts for 32% of national fish production14). The Zone could process around 70,000 tonnes of fish each year, generating around 35,000 tonnes of byproducts. These are sometimes labelled â&#x20AC;&#x153;wasteâ&#x20AC;? but generally sold to local farmers as a low-value agricultural fertilizer15.

The map in Figure 9, along with the references below, shows the locations of each project in the Mamminasata development. 07:TPA Pattallassang 11,12,13,14: Go Green Program 18: Takalar Maritime Zone

Source: Ministry of Public Works, Jakarta, Cipta Karya

Ministry of Marine Affairs and Fisheries

Figure 9: Project Proposed in Mamminasata

3 Options for delivery The overarching objective of the Mamminasata Metropolitan Development - to build up an area that can accommodate the needs of the region and to encourage the development of an investment and economic growth hub in Eastern part of Indonesia - can be supported in several ways. In this section we outline alternative options for delivering the KSN Mamminasata development, relative to the baseline scenario. Based on the scope of the analysis outlined in Section 4 above, this green growth assessment includes consideration of three scenarios as follows: 

Baseline Scenario – which is the current position of the Mamminasata Metroplitan Development Plan and likely implications of future development as planned (ie: Business as Usual)



Baseline Scenario KSN Mamminasata Metropolitan Development Plan has been started since the formulation of KSN Mamminasata Spatial Plan in 2003, followed by various development programs. Therefore, we define the baseline as provided in the Spatial Plan, Design Engineering Document (DED), and Assessment Documents. This baseline (or "Business As Usual") scenario. Since all scenarios are relative to the baseline, it is not necessary for the purposes of this incremental analysis to quantify the costs and benefits of the baseline itself. Indeed, with the data available and with the project in the advanced planning stage, this would neither be possible nor useful. In technical terms, the scenarios that follow are based on an “incremental” costs framework, not the “total” costs framework. Therefore, we do not take a position on whether the baseline itself positively or negatively contributes to the five outcomes of Green Growth (see Section 3), but rather evaluate in economic terms the costs and benefits of investment in a range of interventions that can contribute to green growth. This eCBA focuses on the contribution to green growth from investing in a range of interventions that improves the green growth performance of the Development Plan as currently planned. However, it is worth noting that it is obligatory to give at least basic consideration to social, environmental and wider economic development objectives under Indonesian law. Specifically, the activities being undertaken state that they are planned in accordance with the relevant environmental regulation including: -

Law 32/2009 on Environmental Protection and Management

Government Regulation 37/2012 on Watershed Management 27

Government Regulation 81/2012 on Domestic Waste Management and Similar Domestic Waste

Government Regulation 27/1999 on Environmental Impact Assessment

Government Regulation 82/2001 on Water Quality Management & Water Pollution Control

Ministry of Environmental Decree No 6/2007 on Waste Water Quality Standard for business and/or fish processing activities

Green Growth Scenario The baseline scenario may not necessarily align with an optimal development path for Indonesia. Even with environmental regulations mentioned above, there can be a range of externalities and governance, policy and institutional factors that prevent the Mamminasata Development from attaining its optimum green growth performance. A Focus Group Discussion was conducted with government officials in Makassar on the 20th of November 2013 to identify suitable interventions which can support the achievement of a more sustainable metropolitan development. Following the discussion, stakeholders consulted provided us with key project documents including the Masterplan, the AMDAL, the DED. Based on these documents, a “Green Growth Scenario” was designed, highlighting three “Green Growth Interventions” for the core project activities outlined on page 19. Through consultation, the three interventions identified in Table 5 below were assessed under the Green Growth Scenario. The aim of these interventions are to improve the green growth performance of the Development compared to the current plans envisaged (ie: the Baseline position). These performance improvements are assessed in the eCBA through estimating the net benefits to society in monetary terms so that the potential benefits can be compared to the cost of the interventions to help inform the decision about how worthwhile these interventions are to society. Table 5: Interventions in the Green Growth Scenario

Project Activity Intervention Description Go Green Program / Reforestation of Rehabilitation of the upper region Clean Water Supply Jeneberang watershed Jeneberang watershed to avoid sedimentation to Bili-Bili Dam Landfill Waste Municipal Solid Waste Methane gas capture from municipal waste Management (MSW) to Energy landfill Takalar Maritime Zone Generating higher Utilization of fish processing “waste” to value-add fish products generate higher value-add products such as fishmeal and fish oil. Therefore, these interventions are hypothesized to have a net positive effect on relevant stakeholders in the Mamminasata Development. Each of them has been included in a quantitative, monetized scenario within the eCBA. Details of which stakeholders are affected and what impacts are considered within the eCBA are included in Section 4. Green Growth Aspirational Scenario In addition to those interventions outlined in the Green Growth scenario, there are a number of further interventions that have been discussed and identified during research. These are listed in Table 6 below. 28

These were considered to have the potential to significantly contribute to more than one of the five outcomes of Green Growth, given the interrelated nature of green growth development. Note that contribution to one often simultanously results in positive contribution to other outcomes. In practice, these interventions may involve substantial economic/financial costs especially in the near term without significant policy reform or may simply be operationally impractical. Others simply lack the data required for a credible analysis. For these reasons, as well as time and resource constraints, these interventions were not subject to the eCBA as in the case of the Green Growth Scenario. Table 6: Interventions in the Green Growth Aspirational Scenario

Project Activity Intervention Description Centerpoint of Re-design of Center Point of  Reduce land reclamation significantly Indonesia Indonesia and relocate non-essential facilities elsewhere in Makassar, which would otherwise impact negatively on the marine coastal environment  Acid sulfate soil management plan included in development plans, to avoid land contamination problems  Integrated plan for wastewater treatment to improve access to clean water and reduce water pollution  Identification of sustainable sources for “building aggregate” for land reclamation, which otherwise would exploit the use of natural resources and also create waste disposal problems relating to the construction process  Inclusion of highly resilient buildings only (earthquake/flooding vulnerability), to address adaptation climate change. Clean Water Responsible Mining  Controlled and responsible mining Supply practices in a Karst (Limestone) area, which could otherwise contaminate the clean water supply running though limestone areas. Liquid Waste Wastewater recycling  Wastewater recycling to reduce the Management net demand for drinking water (PDAM piped water) Wastewater treatment  Construction of additional greywater and sewage treatment plants (and supporting sanitation infrastructure) 16

We understand a monorail is being considered as part of the development. Monorail benefits could be significant, however, estimation is highly uncertain and therefore an assessment of its contribution to green growth has not been considered here. We would recommend however that further work on impacts that would drive large variances in results would be valuable, for example on potential for modal shift, occupancy levels, transport demand forecasts, fuel use, tunneling requirements and other factors.



Mamminasata Opening up markets Metropolitan Road Network Development Takalar Maritime Sustainable fishing Zone



to improve quality of river and maritime environment. Build paved feeder roads off TransSulawesi highway, to open up access for agriculture in Central Sulawesi to Makassar for consumption/export. Levels of fishing in line with Maximum Sustainable Yield

Since the interventions listed above may over time become economically viable, practical and/or “analyzable” over the longer term or under different circumstances, these have been included in the Impact Pathways. However, for this eCBA they have been excluded from the monetary analysis.

4 Methodology This section summarises the methodological approach used to evaluate the societal costs and benefits likely to be generated by the different green growth interventions. Introduction to Green Growth Assessment Within the Green Growth Assessment of Capital Projects, eCBA is the key methodology used to value social, economic and environmental costs and benefits, and underlies the results in this report. These costs and benefits are not always taken into account in decision making as individuals maximize their own private welfare, not necessarily social welfare. Private costs and benefits and social costs and benefits diverge due to the presence of market imperfections. For example, an investor does not always pay for the health damage that industrial effluent from their factory generates to communities downstream so the factory over-produces relative to what would be ‘best for society’, or does not pay for pollution-control technology even though this is cheaper than the health damages inflicted. These market imperfections include: 

Externalities (e.g. water pollution to a downstream user)



Public goods or bads (e.g. clean air or Green House Gas emissions)



Taxes and subsidies (e.g. fossil fuel subsidies, labor taxes, taxes on capital)



Knowledge spillovers (e.g. under-investment in human capital and training)



Asymmetric information and principal-agent problems (e.g. investor is not beneficiary of investment)

This concept can be equivalently thought of in terms of ‘stocks and flows’. Natural capital provides valuable ecosystem services to communities, for which there is rarely a market price. Therefore, private individuals deplete the stock too quickly, not accounting for the value of these ecosystem services, and/or not accounting for the rate of natural regeneration of the stock. Over time, these stocks can no longer provide the valuable flows and so become degraded or fully depleted. If these market imperfections were corrected, natural capital would be as stewarded as carefully as financial capital, and the socially optimal amount would be preserved. Principles of Cost Benefit Analysis It is necessary to consider a much wider range of prices than pure market prices to arrive at the social costs and benefits of a decision (the “social opportunity cost”). There are a number of principles to be followed when calculating social opportunity cost (SOC). We have outlined the logic behind each principle, along with a commentary on to what extent these are applicable to the analysis in this report17. We note that these principles are crucial in differentiating eCBA (similar to “social cost benefit analysis”) from “financial appraisal” or “financial cost-benefit analysis”, which only considers market costs and benefits from the perspective of a private investor. 17

For further details relating to the principles and application of Cost Benefit Analysis the reader is referred to The World Bank “Handbook on Economic Analysis of Investment Operations”, The European Investment Bank “The Economic Appraisal of Investment Projects” and United Kingdom HM Treasury “The Green Book: Appraisal and Evaluation in Central Government”.

Social discounting: Discounting is used to compare costs and benefits that occur in different time periods. Society generally prefers one dollar now to one dollar next year. This is partly due to intrinsic impatience in human nature and partly due to the expectation that society will be wealthier in future. It can also alternatively represent the fact that dollars invested now create new assets and income tomorrow, and therefore capital has an opportunity cost across time. The rate at which costs and benefits are compared across time (‘discounted’) is called the Social Discount Rate (SDR18). In general, the SDR will be significantly lower than a private sector discount rate used in financial appraisal since society can afford to take a longer term view of assets, risks are spread across entire populations not just one project, and there are no taxes to consider. We use a (real) SDR of 10% in our analysis, in line with the Asian Development Bank / World Bank range of 10-12% for developing economies19. We note that a corporate financial appraisal would be more likely to use a discount rate of 15% or higher in investment decision making. See Stern (2006)20 for a full discussion on the rationale for low and high discount rates in public decision making. Taxes and subsidies: If there are significant taxes or subsidies present, then market prices will not represent the SOC of a resource (since taxes/subsidies are simply a transfer payment to/from government). In practice, it is not necessary to remove taxes and subsidies from all market prices in the analysis, but only where it makes a material difference to decision making. This is generally where markets are highly distorted. In the context of KSN Mamminasata, the most relevant distortions are in the electricity market: 

Electricity purchased from the grid is also subsidized, heavily so for retail customers. This subsidy may amount to several US cents per kilowatt hour21, which is considered material. At the same time, renewable electricity sold to the grid is also priced at a governmentdetermined formula (“Feed-in Tariff”), which is linked to the cost of production. Clearly, neither of these represents the SOC of electricity. For this reason, we have used the Levelized Cost of Electricity (LCOE) of coal generation as the value of electricity production from waste-to-energy (evaluated at 15% discount rate).

Labour is also a highly taxed item, and also one where market distortions such as unemployment (or in the Indonesian case, under-employment) mean that the opportunity cost is less than the market wage. We have not adjusted market wages in our analysis, however, due to the small impact market wages have on overall results, the difficulty of separating labor from other input costs, and the unavailability of studies of the Sulawesi labor market. Trade-related taxes and import costs are covered under “tradable goods” below. Externalities: Where the social cost (which includes environmental costs) of the extraction or consumption of a resource differs from the private cost (or equivalently, the benefits), there is said to be an “externality”. Again the market price, determined solely by private costs and benefits, will not reflect the true SOC of the resource or activity.

Or: Social Rate of Time Preference. In the Ramsey (1928) model, SDR is defined as the sum of: the Pure Rate of Time Preference; and the Marginal Elasticity of Utility with respect to Income, multiplied by expected Income Growth. 19

Zhuang et al (2007) “Theory and Practice in the Choice of Social Discount Rate for Cost Benefit Analysis”

Stern (2006) The Economics of Climate Change

PwC (2011) “Electricity in Indonesia: Investment and Taxation Guide”

The presence of externalities is common in economies, including in South Sulawesi. This includes natural capital depletion without regard for knock-on loss of flow-benefits for downstream communities as well as under-provision of goods with positive externalities, and vice versa. In this analysis, we focus on the value of the many market and non-market provisioning and regulatory services attributable to Forest Ecosystems, particularly on the water regulation service that is having impacts on the Bili-Bili dam. We consider climate change induced by GHG emissions, through improved landfill waste management and forest rehabilitation. We also discuss qualitatively the “tragedy of the commons” externality of over-fishing and how this can be reduced. Market power: Similarly, if a market is distorted due to oligopolistic or monopolistic market structures, then the market prices will fail to reflect the true opportunity cost of a resource. In our quantitative analysis, we do not account for anti-competitive distortions. Tradable goods and Exchange Rates: Tradable goods must be valued as if there are no impediments to trade (i.e., no quantitative restrictions, no import/export tariffs or subsidies). In Indonesia, there is one relevant traded good: 

Fishmeal– Indonesia is a net importer of fishmeal, with 2011 imports from Peru alone exceeding annual production22. Since increased production displaces the need for these imports, the relevant SOC is the import price of fishmeal (which given shipping costs can be considerably higher than domestically produced fishmeal). We do not consider that there is a potential quality differential (due to higher sardine content in Peruvian exports), that means the products are likely not perfect substitutes, but in the absence of reliable data we have not adjusted for this.



Fish oil– as above.

In both cases we use c.i.f prices (pre-tariff) to exclude the impact of these taxes. We assume that the official exchange rate represents the true opportunity cost of foreign exchange. Although there has been intervention in the forex market by Bank of Indonesia (for example in 2013) and trade is to some extent distorted by the presence of tariffs and other restrictions, our analysis is almost entirely conducted in US Dollars anyway. All dollar values are uplifted as needed to a 2013 base year using the United States GDP Deflator. We have not taken a view on whether any capital machinery required for certain interventions is available locally or would have to be imported. In these cases, the costs are quoted in their original dollar terms. Costs relating to finance: The payment of interest and repayment of principal is often a key part of a financial appraisal. This is excluded from eCBA since the project is being assessed on its social costs and benefits, and its impact on resource use. Debt service represents a transfer from payer to payee, and does not affect use of resources or output. Also, the eCBA discounting process takes account of the opportunity cost of the project’s capital and operational expenditure incurred. The same argument applies to interest capitalized during construction. In our analysis, where identifiable, all costs relating to the financing of an intervention have been excluded. Key data and assumptions for this project The eCBA relies on a wide range of physical and monetary data. It is not always clear cut as to which value to use in a particular calculation due to the constant evolution of markets,

Statement by Chairman of Indonesian Feed Mill Association, April 2012

uncertainty about the future, missing or inaccessible data, unknown project operational details and so on. We have been fully transparent with the assumptions we have chosen. The full data set can be examined in the accompanying spreadsheet (available upon request), and we have included the key assumptions driving the overall results in the tables below. As a general rule, preference was given to data in the following order: 1) Project-specific data (e.g. from existing feasibility studies or local stakeholder engagement) 2) Province-specific data (e.g. similar projects in South Sulawesi, other experience from local stakeholder engagement) 3) Indonesia-specific data (e.g. forest valuations from Ministry of Forestry) 4) South / South East Asia-specific data (e.g. fishmeal production costs from case study in India) 5) Other comparable international technology or market data Primary data of type (1) above was often not available, and expert judgment was used in deciding whether data types (2) – (5) were appropriate and whether any major adjustments or caveats were required. Where we feel there are particular issues for consideration, we have included them in the write-up of results in the following section. Table 7 below outlines the key “top-level” assumptions used across multiple areas of analysis. In addition to quantitative assumptions, there were qualitative assumptions made across all areas of analysis. The first of these was that demand curves are inelastic. That is to say, none of the interventions assessed are expected to shift market prices, and so all prices were held constant in the baseline and Green Growth scenario. The second is that the relevant geographical scope of analysis is South Sulawesi only – costs and benefits to other provinces are excluded. The only exception to this was in relation to climate change. As this is considered a global problem, the valuations were made on the basis of the global damages attributable to one tonne of carbon emitted in Indonesia, not just the Indonesiaspecific damages. In terms of emissions accounting, the territorial principle was still followed; that emissions are only counted if resulting from activities in South Sulawesi (e.g. excluding the embodied carbon in coal exports). Tables of assumptions are presented below. Table 7: Key assumptions applied across all aspects of analysis23

Parameter Social discount rate Social cost of carbon

Value 10%

Source ADB Tol (2009) assuming 0% Pure Rate of Time Preference

80 USD/tCO2e

Note: In this table and the following table, units are generally quoted in their source year currency units. In the actual CBA calculations, all values were automatically adjusted for inflation using the US GDP deflator as published by the World Bank World Development Indicators.

Forest ecosystem valuation (secondary forest)

Direct - Timber - Non-timber forest products - Firewood - Water supply regulation Indirect - Erosion control - Carbon sequestration - Flood protection - Water transport - Biodiversity Non-use - Intangible: option & bequest - Social cost: conflict & safety

693USD/ha/yr 500USD/ha/yr 2 USD/ha/yr 5 USD/ha/yr Guideline Economic Valuation Ecosystem, KLH (2010)

518USD/ha/yr 14,300USD/ha 317USD/ha/yr 0

USD/ha/yr24

Forest

Note: Except, Carbon sequestration based on Social Cost of Carbon above and value for carbon stock in Table below. Carbon stock in forest after 20 years, not an ecosystem service flow ($/ha, not $/ha/yr)

71 USD/ha/yr

38USD/ha/yr

60USD/ha/yr

Error! Reference source not found. Outlines assumptions specific to individual green growth

interventions. Table 8: Specific assumptions applied during the analysis of each green growth intervention

Activity Intervention Parameter Landfill Waste ď&#x201A;ˇ Waste to Management Energy Opportunity cost of electricity

Value USD 0.08 kWh

Capacity 4.5 MW Waste generated 2,871 m3/day Proportion of organic waste used 50% for composting [i.e., not available methane capture]

Potential generation

PwC calculation of coalbased LCOE 2013 Assuming coal as BAU because it is current principle energy source. US EPA LandGEM model TPA Pattallassang DED

Assumption

for

CH4

CH4 generation rate

Source

129 m3/tonne 0.208 MWh/year

UNFCCC CDM, PT Gikoko Landfill Gas Flaring Project, Makassar, PDD

Since the Bili-Bili Dam prevents vessels from passing, we have conservatively estimated this value as zero.

Assumption on baseline treatment of CH4 Global Warming Potential factor for Methane Grid factor Go Green  Forest Program / rehabilitation Clean Water Supply

emissions

Cost of planting community forest (‘rebioization’) Cost of maintaining (year 1) Cost of maintaining (years 2-5) Annual dredging required at Bili-Bili due to oversedimentation Dredging costs Time taken for new forest to reach full natural capital value in Table above Carbon stock in forest after 20 years

Takalar Maritime Zone

 Generating

Capital costs of value from fishmeal plant fish waste Purchase price of fish waste Market price of imported fishmeal (c.i.f) Market price of imported fishoil (c.i.f) Proportion of waste convertible to fishmeal Proportion of waste convertible to fishoil Proportion of South Sulawesi catch processed in Takalar

To be validated by stakeholders

Released into atmosphere 25 755 gCO2/kWh USD 44/ha USD 271/ha/yr USD 77/ha/yr 1,200,000 m3/year

IPCC Fourth Report (2007)

Assessment

IEA (Indonesia average 2011) Peraturan Dirjen Bina Pengelolaan DAS dan Perhutanan Nasional No P6/V-SET/2011 tentang Ancar-ancar Harga Satuan Pokok Penganggaran Pembangunan Bidang PDAS&PS Tahun 2012

Ministry of Public Works, Balai Besar Wilayah Sungai

USD 2.64/m3 20 years

SME-based assumption

50 tC/ha

SME-based assumption

427,500 USD/100tonne-day 74 USD/tonne 1712 USD/tonne 2154 USD/tonne 18%

10%

33%

Central Marine Fisheries Research Institute, Kochi Tempo (March 2011)

Index mundi Based on 26% spread over fishmeal. Spread source: Hammersmith Ltd. Grain Trading Central Marine Fisheries Research Institute, Kochi Central Marine Fisheries Research Institute, Kochi

Assumption

Average product Takalar

“waste” from

35%

UK Department Environment, Food Rural Affairs.

for and

5 Scope of Analysis This section outlines the activities, outcomes and stakeholders considered as part of the analysis. Impact pathways and indicators In order to determine the contributions to green growth, i.e. net benefit that each of the “green growth interventions” will generate, we must first establish how each intervention is likely to affect the environment, the economy and society as a whole. We use ‘impact pathways’ to describe the linkages between interventions (activities), the expected outputs from those activities, and the positive and negative outcomes that are generated in both the short and longer term. The structure of an impact pathway is outlined in Figure 10 below. Beneath Figure 10 there is an example for KSN Mamminasata actually used in the Extended Cost Benefit Analysis. By explicitly outlining this “theory of change”, we make sure that each outcome is clearly defined and that they are derived from tangible activities and outputs. Outcomes must be expressed in monetary terms to ensure that they are compatible with a monetary Cost Benefit Analysis.

Figure 10: An impact pathway

Inputs  What resources have been committed?

Activities

Outputs

Outcomes

Impacts

 How are the

 What are the

 How are

 The net change

resources used?

direct results of those activities?

stakeholders affected as a result of the outputs?

to stakeholders as a result of outputs

Example for KSN Mamminasata: Capital and operational expenditure on reforestation

Planting and community forest maintenance

Increased forest cover

Increased timber and NTFP yield for local communities Water supply and disturbance regulation for downstream communities and businesses, including sedimentation at BiliBili Dam

n/a – outcomes relative to baseline of deforested area

Better erosion control, soil formation and nutrient cycling for downstream communities and businesses Biodiversity and intangible value to global stakeholders Social conflict avoided for local communities and businesses Better waste treatment for downstream communities and businesses Increased carbon sequestration benefit to global stakeholders

The next Table 9 overleaf sets out the impact pathways constructed for each of the nine Green Growth interventions. These impact pathways define the scope of our cost-benefit analysis and identify the key indicators and outcomes that we will seek to quantify in our approach, as well as to whom these accrue. It is worth noting that this is not an exhaustive list of impacts, but rather a selection of high-impact interventions as well as those explicitly suggested by project stakeholders. There is an additional column to identify which Green Growth Outcome we have classified for each impact.

Those quantitative impacts that are included in the eCBA (marked with a “”) are defined very strictly with respect to impacts and stakeholders as these have to be absolutely clear for the valuation to be robust. Those quantitative impacts not included in the eCBA, or those activities that were considered as part of the qualitative Green Growth Aspirational scenario not the Green Growth Scenario, are defined more flexibly (and marked with a “” - see also the key below). Monetary, additive indicators are: 

Marked with a “” in Column 4 of Table 9.



Included in the eCBA calculations



Discussed under the title “costs and benefits” in Section 5

Monetary, non-additive indicators, as well as non-monetary indicators are: 

Marked with a “” in Column 4 of Table 9.



Excluded from the eCBA calculations



Discussed under the title “wider impacts”, in Section 5

The costs and benefits associated with each impact have been “allocated” to one of the five Green Growth dimensions for reporting purposes. This does not affect the valuation methodology but it determines which outcome each cost or benefit is categorized as. This process is subject to uncertainty since many of the costs and benefits are cross-cutting; i.e., they contribute to more than one outcome of green growth In particular, resilience is a crosscutting outcome and interventions affecting resilience are likely to affect at least one of the other 4 outcomes as well. Open communication and stakeholder participation is the best way to achieve consistency in the allocation of costs and benefits to the different outcomes of Green Growth.

The symbol  also covers activities not analyzed quantitatively (i.e., those in the Green Growth Aspirational Scenario)

Key: Intervention A Intervention B  

Included in Green Growth Scenario Included in Green Growth Aspirational Scenario Included in Green Growth Scenario, and included in Monetary Cost Benefit Analysis Not included in Monetary Cost Benefit Analysis Table 9: Impact Pathways

ACTIVITY

BASELINE SITUATION

Upstream ecosystem degradation not helping with downstream supplydemand balance (already water rationing) CLEAN WATER SUPPLY

GG INTERVENTION

Reforestation of Jeneberang watershed

Increase in water demand from KSN Mamminasata will exacerbate situation Nearby planned mining activities will also disrupt supply of clean water

MONETISED IN CBA?

OUTPUT



Government

NEGATIVE OUTCOME / COST

Cost of reforestation

Increased forested area

Bili-Bili owners



 Wastewater recycling [industrial and residential use]

IMPACTED STAKEHOLDERS

 

Greater availability of clean water for residents of Makassar [given current water shortages, reduced demand for fixed supply of PDAM piped water]

Households and industrial users

Local communities Global impact

Financial cost of installing residential and industrial water recycling facilities

POSITIVE OUTCOME / BENEFIT Range of ecosystem services (timber, NTFP, firewood, water supply regulation, erosion control, carbon sequestration , flood protection, biodiversity, intangible: option & bequest, social cost: conflict and safety) Avoided dredging costs of sedimentation at Bili-Bili Dam

Reduced water bills

Avoided economic costs of boiling water Climate change mitigated

OUTCOME OF GREEN GROWTH

Ecosystems

Economic Growth

Social Development GHG emissions

 Responsible Mining

 

Greater availability of clean water for residents of Makassar [in long term as supply crunches]





 LIQUID WASTE MANAGEMENT

Most sewage and greywater untreated

Wastewater treatment



Cleaner water released into the larger watershed Cleaner water released into the larger watershed - increase in coral fish habitat Cleaner water released into the larger watershed - increase in coralbased tourism Cleaner water released into the larger watershed - increase in coastal protection from coral Cleaner water released into the larger watershed - improved human health reduced morbidity

Mining companies

Forfeited mining revenues Avoided economic costs of boiling water Climate change mitigated

Local communities Global impact

Investors

Economic Growth

Social Development GHG emissions

Financial cost of installing water treatment plant

Local fishing communities

Increased fishing revenues

Economic Growth

Local communities and businesses

Increased tourism revenues

Economic Growth

Makassar residents and businesses

Avoided damage from weather events

Resilience

Increased labour productivity

Economic Growth

Reduced healthcare treatment costs

Social Development



LANDFILL WASTE MANAGEMENT

Composting of solid waste

Municipal Solid Waste to Energy



Change in energy production



Change in GHG emission Change in other air pollutants Change in leachate from landfill and previously dumped waste (if methane capture combined with improved leachate management, which is typical)



TAKALAR MARITIME ZONE

Port and fish processing factory

Generating higher valueadd fish products

Cleaner water released into the larger watershed - improved human health reduced mortality Cleaner water released into the larger watershed - improved land quality



Increased fishmeal production

Local communities

Cost of technological investment and other operating expenses

Social Development

Increased land and property prices

Economic Growth

Value of energy generated

Economic Growth

Avoided climate change Health and quality of life impacts avoided

Global Local communities

Local communities

Avoided destruction of human capital

Cost of technological investment and other operating expenses

GHG Social Development

Impact on soil quality and optimal land use

Ecosystems

Value of fishmeal produced

Economic Growth and social development



 Over-fishing

Sustainable Fishing Yields

Security of supply for the local animal feed industry Levels of fish catch maintained at Maximum Sustainable Yield forever





Reduced land reclamation



 CENTREPOINT OF INDONESIA

Marine land reclamation to build public/commercial complex

Re-design of CoI 



MAMMINASATA METROPOLITAN

Planned toll road for major cargoes

Avoidance of acid sulphate soils in land reclamation

Opening up markets



More resilient buildings to flood and earthquake damage Cleaner water released in marine environment around CoI Reduced transport costs

Improved profitability of local agriculture

Resilience

Higher long-term income

Social Development

Marine ecosystems

Higher biomass volumes over time for feeding other marine life biodiversity value

Ecosystems

Global impact

Avoided destruction of marine ecosystem - biodiversity value

Local businesses and communities

Avoided destruction of marine ecosystem - avoided coastal erosion

Global impact

Avoided pollution of marine ecosystem biodiversity value

Local fishing communities

Avoided pollution of marine ecosystem fishing value

Local farmers

Local communities

Businesses

Lower shortterm income

Increased construction costs

Avoided damage to manufactured capital

Resilience

See wastewater treatment - above

Local famers (South / Central

Cost of upgrading

Increased production and

Economic Growth

ROAD NETWORK DEVELOPMENT

Sulawesi)





  

Increased access to education facilities

Increased access to health facilities - decreased morbidity and mortality

Local communities (South/Central Sulawesi)

feeder roads

profit Increased agricultural income

Social Development

Increased productivity and lifetime earnings

Economic Growth / Social Development / Resilience

Avoided destruction of human capital Reduced healthcare costs Increased labour productivity

Ecosystems

6 Results This section provides the Cost Benefit Analysis of each of the three green growth interventions, as well as analysis of their Wider Impact. Overall, the interventions assessed in this eCBA can demonstrate a positive contribution to improving the green growth performance of the project, and contributes through these interventions to the broader achievement of sustainable development in South Sulawesi in terms of economic development, poverty reduction, addressing climate change and improving the functioning of ecosystem services and better management of priority ecological assets. We also consider for each intervention whether there is a financial or business case for investing in the intervention. For many of these interventions, to achieve the estimated positive green growth impacts will require some adjustments to the enabling policy environment, which are briefly outlined later in this report. Aggregate costs and benefits Based on the methodological steps and assumptions outlined in the above section, we estimate that the aggregate net benefit generated across the three identified green growth interventions is $355m in Net Present Value terms. In context, this is equivalent to 6% of South Sulawesiâ&#x20AC;&#x2122;s GRDP, or 19% of government spending in 201227, and represents a benefit-cost ratio of over 6.9. Figure 11: Impact of interventions on 5 outcomes of Green Growth

Aggregate impact of green growth interventions

0 GHG Emissions

100 Economic Growth

200 Social development

300 Ecosystems

400 Million USD (2013) Resilience

South Sulawesi Global Regional Domestic Product (GRDP) was $4,280m in 2012 and government expenditure was $1,315m, according to World Bank, Improving Public Service Delivery and Financial Management in the Gateway to Eastern Indonesia, 2012.

Benefit: Cost Ratio

Economic Rate of Return

Net benefits

GHG Emissions

Economic Growth

6.87

n/a

$355m

$255m

$22m

Social Developm ent $71m

Ecosystem s

Resilience

$4m

$2m

The largest return in absolute terms comes from the Municipal Waste to Energy intervention, which generates $151m in GHG benefits and $4m of economic and social benefits. This result strongly influences the overall cross-portfolio results too, where the largest benefit category is GHG emissions. The largest return in relative terms comes from the Takalar Maritime Zone, where it is proposed to generate higher value-add products from fish waste. Here, the Economic Rate of Return (ERR) is above 1900% (this is flattered by the opportunity costs used for the products costs, but the return is likely to genuinely lie in the tripe-digit percentage range). In terms of Benefit-Cost Ratios, MSW-to-Energy is the most effective (8.9), followed by Fish waste processing (6.5) and lastly, reforestation of the Jeneberang watershed (6.1). Figure 12: Impact of each intervention on 5 outcomes of Green Growth

Landfill Waste Management: Municipal Solid Waste (MSW) to Energy

Takalar Maritime Zone: Generating higher value-add fish products

Go Green Program / Clean Water Supply: Reforestation of Jeneberang watershed -50

100

150

200

Million USD (2013) Economic growth

Net benefits $355m

GHG Emissions

Ecosystems

MSW-to-Energy

Social development

Fish processing $96m

$109m

Resilience

Reforestation $150m

As discussed in Section 4, the strict framework of e-CBA ensures that all costs and benefits on the following pages represent net additional impacts on social welfare and can be compared against each other. Other information that can be useful for policy making, such as qualitative and quantitative, but non-monetary, discussion of Green Growth opportunities and solutions has been included in text boxes throughout the following sections.

and Benefit Cost Ratios for the six areas of green growth intervention

2500%

2000%

1500%

1000%

500%

Benefit cost ratio

Economic rate of return

Figure 13: Economic Rates of Return (ERR)

0 Go Green Program / Clean Water Supply

Landfill Waste Management

Economic Rate of Return (LHS)

Takalar Maritime Zone Benefit Cost Ratio (RHS)

Note: Zero ERR values are indeterminate due to timing of cost and benefit flows.

It is also worth noting that the impact of the discount rate is significant (see Figure 15) , and implies that the subjective decision about how to measure future costs and benefits relative to the present will have a major impact on green growth decision making. Figure 14: Impact of the Social Discount Rate on the total net benefits of nine Green Growth Interventions

Net Green Growth Benefits (USDm)

500 400 300 200 100 0 Net benefits @ 5%

Net benefits @ 10%

Net benefits @ 15%

Net benefits @ 5%

Net benefits @ 10%

Net benefits @ 15%

$463m

$355m

$298m

Net benefits @ 20%

Net benefits @ 20% $266m

ERR is the interest rate at which the cost and benefits of a project, discounted over its life, are equal. ERR differs from the financial rate of return in that it takes into account the effects of factors such as price controls, subsidies, and tax breaks to compute the actual cost the project to the economy.

Reforestation of Jeneberang watershed Costs and Benefits Benefit: Cost Ratio 6.1

Economic Rate of Return n/a

Net benefits

GHG Emissions

Economic Growth

Social Development

Ecosystems

Resilience

$150m

$151m

-$12m

$4m

$2m

Figure 15 : Impact of MSW-to-energy on 5 outcomes of Green Growth

Go Green Program / Clean Water Supply: Reforestation of Jeneberang watershed

Million USD (2013) -50 Economic growth

GHG Emissions

0 Ecosystems

50 100 Social development

150 200 Resilience

Millions

Figure 16: Profile of costs and benefits over time

$20 $10 $0 1

9 10 11 12 13 14 15 16 17 18 19 20 21

-$10 -$20 Private cost

Total Cost

Private benefit

Total Benefit

Discounted Annual Net Benefit (Private)

Discounted Annual Net Benefit (Total)

The Go Green Program aims to plant 25,000 hectares of forest across the four districts that together comprise KSN Mamminasata. This is to compensate for historical deforestation in and around Makassar, for aesthetic and environmental reasons, in urban and rural areas. At the same time, part of the KSN Mamminasata priority plan is to increase the supply of clean water from the Jeneberang river (passing through the Bili-Bili dam) downstream, where it can be treated and increase the volume of piped water provided to households and businesses in and around Makassar. The water system in KSN Mamminasata is extremely complex and a detailed discussion of broader green growth issues has been outlined in Box 1 below. However, one feature of the system amenable to quantitative analysis is that the Bili-Bili dam has been suffering severe build-

up from sedimentation in its reservoir. Local stakeholders from the Ministry of Public Works29, are convinced from anecdotal evidence that the excess of sedimentation levels over optimal operating levels is due to deforestation in the Jeneberang watershed, upstream from Bili-Bili. This is supported by scientific study of the area in question in 2003 (the date is important since it excludes the impact of the recent collapse of Mount, which sharply increased sediment volumes). Table 10: Areas for reforestation under the Go Green Program (‘000 ha)

Makassar

Maros

Gowa

Takalar

Total

Urban area

190

230

Semi urban

400

800

1.4

300

2.9

Forest

1.75

21.75

Water front

120

Total

460

12.87

9.59

2.08

As an intervention, we propose targeting and expanding the reforestation program to combat water supply issues. Specifically, we propose reforesting around 20,000 hectares to return the Jeneberang watershed to normal (i.e., historical levels of) water supply functionality. We estimate that this intervention would generate $150m in net societal benefits. This figure is composed of avoided (site-specific) dredging costs from improved water supply regulation, and a range of generic ecosystem services provided by secondary forest, including social, resilience and carbon sequestration benefits. This is reflected in Figure 16. The gross benefits are derived from the ecosystem services. In monetary terms, the carbon sequestration function is largest, as 20,000 ha of forest, accommodating an assumed 50tC/ha after 20 years of growth, are valued at $78/tCO2 (i.e., $14,300/ha). Next most importantly are the benefits from improved water supply regulation. We estimate these at $1.5m annually, based on a dredging cost of $2.50-3.00/m3 and a required sediment removal of 530,000 million m3/year30. These figures are based on data provided by local stakeholders. The other ecosystem services can be split into three categories:   

Direct Benefits ($1,201/ha): Timber and non-timber products (at sustainable yields), firewood and water supply regulation (excluding sedimentation benefits). Indirect Benefits ($894/ha): Erosion control, soil formation, and biodiversity. Non-use value ($98/ha): The option and bequest value to stakeholders as well as improved conflict and safety outcomes.

Balai Pengelolaan Sumber Daya Air, Provinsi Sulawesi Selatan

This estimate is based on 40% of the total sediment dredged between 2005 and 2009. The 40% figure is derived from the independent estimate (preceding reference) on the potential reduction in annual sediment flows from conservation measures.

These figures are expressed here in stock terms. In the eCBA analysis, these stock figures were converted to ecosystem service flows31, which could be gradually increased as the new forest grows to each full stock potential. It was assumed that it takes around 20 years for secondary forest to acquire the full natural capital valuation above. The gross costs are limited to $12m reforestation cost (â&#x20AC;&#x153;reboisasiâ&#x20AC;? for community forest) and ongoing maintenance costs of $1.6m ($5m the first year). From a business perspective, this intervention will almost certainly require government support to succeed. In principle, the operators of Bili-Bili dam may be willing to make a contribution of up to $1.5m/year if it avoids future sedimentation build-up. However, as is clear, this will not cover capital costs and operational costs (accounting for discounting over time). A carbon sequestration incentive or Payments for Ecosystem Services may avoid the need for direct government funding, but in practice, direct funding is likely to be required to support community forestry. There are potential further opportunities for Payments for Ecosystem Services. For example, the water supply regulation may also reduce volatility of downstream water provision to PDAM plants, which can help with water shortage in dry season. However, it has not been possible to obtain robust data demonstrating a quantitative link, so we have not included this in the eCBA. Box 1 below provides more qualitative analysis of the water system as a whole in KSN Mamminasata. Box 1: The water sector in KSN Mamminasata During the research and consultation the project team undertook as part of this analysis, a number of significant issues in the water sector were uncovered. In short, these are short-term and potential long-term supply-demand imbalances for piped water, and insufficient treatment of wastewater. Addressing these will be fundamental to the success of Green Growth in KSN Mamminasata, which will contribute to increased water demand as well as increased wastewater production. Recognizing this, the government of South Sulawesi included Clean Water Supply and Liquid Waste Management as two of the priority programs for KSN Mamminasata, outlined in Section 2. We were not able to include these areas in our quantitative analysis due to the lack of available, and reliable, data around the potential interventions. However, our research has highlighted a number of potential Green Growth issues and interventions, which can only be understood in the context of the broader water system. We have therefore outlined in more detail qualitatively below the key messages emerging from the research, should these prove useful in developing the Green Growth Aspirational Scenario in future. The Water Sector: Consumption The current situation on piped water in Makassar and the surrounding areas is one of scarcity. Currently, piped water is rationed to certain hours of the day32. This is because average demand for PDAM piped water is above 90% of available capacity (73.9 million m3/year)33. 31

Based on reverse-engineering of the KLH Guidelines using a 10% discount rate and 40-year timeframe.

.www.antarasulsel.com 7 May 2013

CSIRO (2012) Modelling water supply and demand for Makassar City

It is recognised that demand will soon exceed supply on a permanent basis and therefore the Water Masterplan for KSN Mamminasata includes plans to double capacity by 2020 to around 145 million m3/year, which will comfortably exceed projections of demand, even as the population shifts from groundwater to piped water34. However, there are a number of barriers to realizing this objective. For one, there are disputes among the different districts about the sharing of water. Secondly, there is a major funding gap for water infrastructure at national level; the World Bank estimates this gap at around 37 trillion Rupiah35. This financing issue is likely exacerbated by regulation in the water sector. Data provided to us by the South Sulawesi government suggests that PDAM is only recovering 93% of its costs36, though estimates from other sources in Indonesia have shown cost-recovery rates as low as 55%37. If profits are negative on a per-unit basis there is clearly a limited incentive to invest in additional plants. In addition to these managerial and financial issues, our research has highlighted further environmental issues: (1)

Indonesia-wide studies on rainfall showed a declining trend38

(2) Upstream deforestation, especially in the Jeneberang watershed, is perceived to be disrupting downstream operations. The Bili-Bili dam has suffered increasing sedimentation, which local stakeholders blame on the absence of upstream forest to regulate water supply and protect against soil erosion. (3) Planned mining activities are likely to further disrupt the natural hydrological system. Planned mining of karst (limestone) areas in Maros is likely to disrupt water aquifers unless conducted extremely sensitively (this would affect the Lekopancing watershed that also supplies Makassar). Fundamentally, there is likely to be sufficient natural water to meet the needs of KSN Mamminasata population until 2030. But, given the managerial and financial issues at government and PDAM level, there is stress on the human system and environmental problems may these exacerbate short-run or long-run shortages. For this reason, we have highlighted the key interventions in the Green Growth Aspirational scenario outlined in Section 3, including wastewater recycling to reduce demand, responsible mining to avoid supply disruption, and upstream reforestation. The specific impacts of sedimentation we were able to quantify in the Green Growth scenario, but the impacts of disruption to water supply and demand were beyond the scope of this analysis given an absence of top-level, reliable data.

CSIRO (2012) Modelling water supply and demand for Makassar City

http://water.worldbank.org/sites/water.worldbank.org/files/publication/WATER-Indonesia-Water-InvestmentRoadmap-2011-2014.pdf 36

Estimate based on a retail price of 3,159 Rp/m3 and an production cost of 3,375/m3

http://pdf.usaid.gov/pdf_docs/PNADM102.pdf (2006 estimate, based on tariff of 2,008 Rp/m3 and cost of 3,605 Rp/m3). 38

CSIRO (2012) Modelling water supply and demand for Makassar City

The Water Sector: Disposal At the same time, the human impact on water quality is negative and substantial. 20% of urban, and 54% of rural households in South Sulawesi have unimproved sanitation. Both solid waste and wastewater from residential, commercial, industrial and agricultural users are discharged into the Jeneberang, Maros and Tallo rivers via canals.39 Pollution levels in the mid/downstream Jeneberang are rated as “heavy” in some parts.40 Current wastewater infrastructure, designed to ameliorate water quality until it is clean enough to be safely discharged into the environment, is inadequate; both for sewage and greywater. Yet, wastewater is projected to increase significantly by 203041. KSN Mamminasata contains plans for greywater treatment plant with a capacity of around 3.65 million m3/year. Although welcome, this is a drop in the ocean relative to the size of the issue. Increased wastewater treatment would significantly enhance Green Growth outcomes including to human health, productivity, and marine and land quality. Treated greywater could be used in selective applications in residential/industrial use, further reducing stress on the clean water supply. Despite not being able to robustly quantify these complex systems in the eCBA, we feel these are extremely important Green Growth issues for KSN Mamminasata and have included detailed impact pathways on them in Section 4.

CSIRO (2012) Modelling water supply and demand for Makassar City

WSP (2008) Economic Impact of Sanitation in Indonesia (2008)

Nippon Koei Co. Ltd and KRI International (2011) “Preparatory survey on Makassar water supply development project” Volume 2

Municipal Solid Waste to Energy Costs and Benefits Benefit: Cost Ratio 8.9

Economic Rate of Return 78%

Net benefits

GHG Emissions

Economic Growth

Social Development

Ecosystems

Resilience

$109m

$104m

$4m

Figure 17: Impact of MSW-to-energy on 5 outcomes of Green Growth

Landfill Waste Management: Municipal Solid Waste (MSW) to Energy

Million USD (2013) 0

Economic growth

GHG Emissions

60 Ecosystems

80 Social development

100

120 Resilience

Millions

Figure 18: Profile of costs and benefits over time

$10 $5 $0 1

9 10 11 12 13 14 15 16 17 18 19 20 21

-$5 -$10 Private cost

Total Cost

Private benefit

Total Benefit

Discounted Annual Net Benefit (Private)

Discounted Annual Net Benefit (Total)

As part of the Solid Waste Management pillar of the KSN Mamminasata development plan, a new landfill site is being constructed - TPA Pattallassang. This will accommodate the rapidly growing volumes of waste in Makassar and the surrounding districts (See Figure 17). Some of the (organic) waste is planned to be composted for local agricultural use, but much of the waste will decompose in TPA Pattallassang, producing landfill gas, which is primarily composed of methane. Methane is a particularly potent Green House Gas, with one tonne having the equivalent global 54

warming impact (over 100 years) of around 25 tonnes of Carbon Dioxide. Given the currently low price of carbon credits for the international Clean Development Mechanism, there is limited incentive to flare the methane.42

300,000

1,200,000

250,000

1,000,000

200,000

800,000

150,000

600,000

100,000

400,000

50,000

200,000

m3/year

Tonnes/year

Figure 19: Forecast waste volumes in TPA Tamangapa, Makassar

0 200120032005200720092011201320152017201920212023202520272029 Organic Content (tonnes/year)

Total Waste (RHS)

Source: Project Design Document, UNFCCC CDM Database

At the same time, Sulawesi still has a huge number of households not currently connected to the main electricity grid (87% is the current household electrification rate); in 2009 the number of households waiting for a PLN connection exceeded 150,00043. It is likely that this connecting these households and driving forward development will require additional electricity generation as well as just transmission/distribution infrastructure. Although the current electricity mix on Sulawesi is low-carbon relative to the rest of Indonesia (for example, more than half of all generation in North Sulawesi is hydro or geothermal), if coal is required to meet increasing demand Sulawesi will become dependent on the other islands in Indonesia and increase GHG emissions.

Current assumption is that under BAU methane is released into the atmosphere without being flared. Model is set up to assume flaring under BAU if stakeholders validate this is the case. 43

National Electricity Company (PLN), 2009

Figure 20: Electricity Peak Load and Capacity, Sulawesi, 2012

2500 2000

1713

1500 1000

1042

500 0

406

311 Peak Load

Rated Capacity

North Sulawesi

South Sulawesi

Source: RUPTL PLN 2013-2022

As a green growth intervention, we propose installing methane-capture and electricity generation technology at TPA Pattallassang. This would not only reduce GHG emissions from methane release, but also contribute to meeting the electricity needs of local communities without building additional coal power plants, further reducing potential GHG emissions. We estimate that this intervention would generate $106m in net societal benefits. This net figure is composed of strong positive GHG emissions and the economic value of the electricity. This is reflected in Figure 17. The gross benefits are driven by the avoided release of up to 9,000 tonnes CH4/year, and the carbon emissions associated with the avoided generation from coal-fired power plants of up to 40,000 MWh/year. These benefits are valued using the Social Cost of Carbon, a measure of how much one tonne of carbon dioxide (equivalent) contributes to climate change, and the estimated economic damage from climate change such as reduced agricultural productivity, damage to infrastructure and other manufactured capital, ecosystem failure and social unrest (simulated using computer models of climate change). These are inherently global in nature, and not restricted to Sulawesi or Indonesia only. The other key benefit is the value of the electricity itself, which although classed here as an “economic growth” benefit, contributes to broader development outcomes and electrification has been shown to act as a key driver of poverty alleviation, too44. As discussed in Section 4, electricity is not valued at the retail price or Feed In Tariff, but the opportunity cost – the levelized cost of generation in a sub-critical coal plant (0.08 USD/kWh)45.

PRODUSE (2013) The impact of electricity access on economic development: A Literature Review

The majority of power in terms of GWh in South Sulawesi comes from coal according to PLN RUPTL 2013-2022, so it is reasonable to assume the marginal electricity plant is coal. This estimate also lies comfortably in the range of external estimates. For example, depending on generation technology and coal quality, the levelized cost can range from 5c/kWh to 10c/kWh (Rozana et al (2011), Assessment of CO2 Reduction Potentials through Clean Coal Technologies for Future Power Plants in Indonesia, Dapice and Cunningham (2011), Squaring the Circle: Politics and Energy in Indonesia).

From a business perspective, this intervention is marginal and strongly dependent on the returns from carbon mitigation; the private Internal Rate of Return is around 15% based on a Feed-in Tariff of 850 IDR/kWh (0.07 USD/kWh)46, with no market price for carbon. A modest incentive for GHG reductions of $5/tCO2e could boost this return around five percentage points, depending on operating performance. As a rule of thumb, a 20% decrease in operational performance in terms of carbon mitigated (which might be due to varying waste volumes and composition, rate of decomposition, or other technological issues) will trim a percentage point of the private rate of return. The collection of waste in sufficient volume and of the right composition, and its transport to a site, has been shown to be viable in Makassar under a previous CDM project (which flared the methane, rather than generate electricity). But, other regulatory and legal issues such as clarity about the exact location of the site, and speedy permitting, will be important.

The following example cannot be considered a financial appraisal suitable for decision making and does not consider, inter alia, the role of taxes and subsidies on input and output prices, the mode of financing, construction timeframes and capital escalation costs.

Generating higher value-add fish products Costs and Benefits Benefit: Cost Ratio 6.5

Economic Rate of Return 1945%

Net benefits

GHG Emissions

Economic Growth

Social Development

Ecosystems

Resilience

$96m

$29m

$67m

Figure 21: Impact of MSW-to-energy on 5 outcomes of Green Growth

Takalar Maritime Zone: Generating higher valueadd fish products

Million USD (2013) 0

Economic growth

GHG Emissions

60 Ecosystems

80 Social development

100

120 Resilience

Millions

Figure 22: Profile of costs and benefits over time

$20 $10 $0 1

9 10 11 12 13 14 15 16 17 18 19 20 21

-$10 Private cost

Total Cost

Private benefit

Total Benefit

Discounted Annual Net Benefit (Private)

Discounted Annual Net Benefit (Total)

As part of the Takalar Maritime Estate, a series of activities are planned to make use of Sulawesiâ&#x20AC;&#x2122;s natural marine resources, including the development of fish processing, fish nurseries (aquaculture), research and development and upgraded catching facilities. The processing of fresh, raw, fish into products for wider retail distribution will be central to the Estate. However, this is often a wasteful process, with significant proportion of the by-products treated effectively as waste and sold cheaply to local farmers for use as fertilizer or even discarded entirely. If Takalar is to become a center for fish-product activity in South Sulawesi, the volumes of caught fish, and hence fish waste, will be significant (see Box 2 on next page). 58

As an intervention, we propose constructing industrial facilities to convert the fish ‘waste’47 into higher value-add products, which support the development of local agriculture and aquaculture industries, and at the same time reduce pressure on natural fish stocks and reduce fish discards. Specifically, we propose converting waste to fishmeal and fish oil, high-value, high-protein feed stocks. Fishmeal is too valuable to be used as fertilizer and instead can be used for poultry and pig rearing48. Along with fish oil, it is also suitable for use in aquaculture. We estimate that this intervention would generate $96m in net societal benefits over 20 years. This figure is composed of the profits from fishmeal/fish oil production, which assuming they accrue to local communities are primarily classified as Social Development benefits. This is reflected in Figure 21. The gross cumulative benefits are derived from $13m of annual (economic) profit. This is considered primarily a community scheme rather than an industrial one49, due to precedent from other schemes. For example, in Lombok, Indonesia, a similar scheme sponsored by USAID resulted in community income generation50, and funds for use in local poverty-reduction and educational initiatives. Similarly, a near-identical project in India (from which data for this intervention is drawn) resulted in skilled local job creation and community income. It follows that we classify fishmeal benefits as contributing to social development, and fish oil as economic growth in line with the USAID Lombok study. Other, non-quantified benefits, see Box 2 on next page include a reduction in fish discards at sea, avoidance of rotting fish on land, reduced pressure on fish stocks, income benefits to local fisherman, and the stimulation of local agricultural and aquaculture activity. The gross costs are limited to $580,000 capital investment and running costs of $2m (fully covered by annual revenues).These are classed as costs to “economic growth” due to the opportunity cost of capital investment. From a business perspective, this intervention is very attractive but the exact benefits will be sensitive to local market conditions. The Economic Rate of Return (1,945%) provides a rough proxy for the private Internal Rate of Return since all costs and benefits are private. However, financial and economic values are not equivalent (e.g. piped water is subsidized, reducing costs to the business). More importantly, we have used the c.i.f import price of Peruvian fishmeal as a proxy for the opportunity cost of the products. Given a quality differential is likely for fishmeal produced from local waste products, the financial value of fishmeal is likely to be lower. By way of illustration51, if the market price for fishmeal is $684/tonne and fish oil $889/tonne as in the Indian example the data was drawn from (down from $1,1712/tonne and $2,157/tonne 47

Waste includes trash fish, low-value fish, and waste from production.

http://www.fao.org/wairdocs/tan/x5926e/x5926e01.htm

Specifically, fishmeal revenues that benefit local farmers were counted as Social Development while fishoil revenues, more for use in commercial aquaculture, were counted as Economic Growth benefits. 50

http://www.imacsindonesia.com/v5/index.php/en/2014-01-09-03-34-46/220-fish-powder-production-generates-incomeand-promotes-zero-waste-in-east-lombok. This project differs from our intervention by using agricultural products in combination with fish waste, but is otherwise qualitatively similar. 51

respectively for the Peruvian c.i.f price), and a corporate discount rate of 15% is used, then the return falls to around 570%. This compares to an expected return of 246% in the case study this intervention is based on52. It seems that within plausible ranges for key parameter values, this is an attractive proposition. However, further market data and verification of sources of demand for these volumes would be required before implementation.

http://eprints.cmfri.org.in/9607/1/3.pdf

Box 2: Maximum Sustainable Yield: Ensuring the long-term success of Takalar As is implicit in the impact pathways in Section 4, our hypothesis is that the current stock of fish in South Sulawesi is subject to over-fishing. The more efficient use of fish waste could reduce pressure on fish stocks, as could measures targeted at the level of total fish catch. By catching at, or below, the Maximum Sustainable Yield (MSY), South Sulawesi could sustain the catch and community income over multiple generations. Unless the discount rate is unusually high, this can generally be considered to be a positive outcome for Green Growth. Our research sought to identify or estimate the MSY and underlying fish stocks. For some estimates of MSY (which also suggested overall under-fishing was occurring), we were unable to sensibly estimate fish stocks53. Based on more specific data on fish production from Ministry of Marine Affairs and Fisheries Statistics from 2002 to 2013, and contacts of ours were also unable to econometrically estimate the MSY or Maximum Economic Yield, due to the unreliability of the data. It remains probable that at least some species are being over-fished though in (South) Sulawesi. For example, the ADB has set out to reduce over-fishing on the Northern side of Sulawesi54. Boneka and Lasut (2004)55 agree with that finding that at least some species (large pelagic fish) are being currently over-fished. In addition, as Figure 22 demonstrates, the overall level of fish production has been falling in the past decade even as the price has been rising. Since overall levels of fish production in Indonesia have been rising, we suggest this is also indicative of declining stocks limiting supply (and not restrictive practices driving up the price).

400,000

70,000

350,000

60,000

300,000

50,000

250,000

40,000

200,000

30,000

150,000 100,000

20,000

50,000

10,000

Fish price (IDr/kg)

Production (tonnes)

Figure 23: Fish production and price in South Sulawesi

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Production (LHS)

Fish Price (RHS)

Source: Ministry of Marine Affairs and Fisheries Statistics from 2002 to 2013

Therefore, we highlight the important of further research into the state and trends of local fish stocks. This will enable Takalar Maritime Zone to grow and operate sustainably. The use of Green Growth policy instruments including fishing quotas, taxes, and fuel subsidy reforms may help to reduce levels of fishing to more sustainable levels.

For example, the utilization rates provided in IFW (2010) Aquaculture in Indonesia do not correspond to sensible levels of stock depletion and are likely to represent metrics other than MSY. 54 55

http://www.povertyenvironment.net/sites/default/files/pep-files/Project%20Summary-Sulu%20Sulawesi.pdf

Boneka and Lasut (2004) â&#x20AC;&#x153;Prospect on pelagic fisheries on Northern Sulawesiâ&#x20AC;? IIFET Japan proceedings

7 Policy implications In this section we consider the implications of the CBA results for policymakers. Making Green Growth investable In the previous section we identified three interventions whose benefits to society exceed their costs. As discussed in Section 4, these interventions may not in practice be undertaken due to a range of market distortions such as externalities, short-termism etc. This is why many of the interventions do not appear to be an attractive proposition for investors when only private cash flows are considered and a more conventional project hurdle rate used (15% for illustrationâ&#x20AC;&#x2122;s sake in our analysis). Green Growth fundamentally requires that welfare-positive measures such as those identified become investable for the private sector, or that government agrees to directly fund financially unfeasible projects. Making projects investable requires policy designed to increase project rewards and/or reduce project risk. In Table 11 below we have outlined for each intervention a bullet point summary of the key financial areas of concern from the government or investorâ&#x20AC;&#x2122;s perspective, drawn from the previous section. Then, in the right-hand column we have identified appropriate policy categories appropriate for improving the investability of each. Where specific existing GoI policy mechanisms have been identified in this area, we have referenced them. Table 11: List of policy categories for making green growth interventions investable

Activity Landfill waste management

Intervention Waste to energy

Barriers to investability - No market for electricity produced -

High tipping fee, making it uneconomical once transport costs taken into account

Insufficient amount of waste due to scavengers waste utilization or 3R programme

Lack of scale. Power company investors may be looking for larger projects such as opportunities for hydropower plants linked to smelters.

Lack of connectivity and infrastructure.

Potential enabling measures - Government should guarantee that PLN will take up electricity generated from larger private IPPs -

Reform of energy pricing system (e.g. reform of fossil fuel subsidies / carbon tax / trading scheme)

Set tipping fee rate by government

Go Green Program/Clean Water Supply

Takalar Maritime Zone

Forest rehabilitation

Incompatibility of programs related to land use between sectors Opportunity/income loss from forest/land use Land law â&#x20AC;&#x201C; differences between ownership and management parties leads to weak incentives to act Lack of understanding of the forest as a priority ecological asset which contributes to important provisioning and regulatory services relevant to the soilwater interface, nutrient cycling, and waste treatment.

Fish waste

Land use plan must be clear and as intended in Spatial Plan

Incentives/disincentives related to rehabilitation, conservation, management of forest ecosystem services

Government subsidy per unit waste/pollution reduced Financial support for local fish meal industry Knowledge and training is needed to improve understanding of the opportunity. East Lombok should be used as a case study where rotting fish is turned into 80 tons per month of feed pellets for fish and chicken. Support for equipment is required to get kick start the program â&#x20AC;&#x201C; ideally aid should provide equipment. In Lombok, 60% of profit is used for supporting underprivileged 56 children . This kind of ringfencing of funds can help spread the benefits across green growth outcomes.

power provision Investment in infrastructure Collaboration between planners and PLN Implement Law 41/1999 on Forestry and Public Work Ministerial Decree No 02/PRT/M/ 2013 on Guidelines for Water Resource Management Plan.

USAID, Fish powder production generates income and promotes zero waste in East Lombok, 2014

Making Green Growth possible Even theoretically investable Green Growth interventions are not necessarily practical. Indeed, some of them are expected to be profitable without any policy support, but are still not (fully) implemented. This is generally due to a range of operational and practical factors we collectively call here “implementation barriers”. Policy has an important role in providing an enabling environment to overcome these barriers, too, as well as just financial barriers. We have outlined for each intervention a bullet point summary of the key financial areas of concern from the investor’s perspective, drawn from the previous section. Then, in the righthand column we have identified appropriate policy categories appropriate for improving the investability of each. Where specific existing GoI policy mechanisms have been identified in this area, we have referenced them. Table 12: List of policy categories for enabling green growth interventions

Activity Intervention Landfill Waste Waste to Energy Management

Potential Investability issue Availability of skilled labor -

Availability of waste

Go Green Forest Program/Clean Rehabilitation Water Supply

Availability of non fossil fuel subsidy Knowledge on forest ecosystem function especialy related to water supply

Takalar Fish waste Maritime Zone

Availability of skilled labor

Knowledge on waste added value

Remedial policy category Government training on landfill and waste to energy Government restriction on waste disposal outside landfill Government subsidy program to support waste to energy use Government education program Scheme of community forest management and sustainable forestry Inter-departmental cooperation related to land use Government training on fish meal Government support on awareness raising of waste market value

Making Green Growth Feasible For National and Regional Planning The eCBA process has value beyond the approval and design of green projects, or the greening of brown projects. It can also be used at a micro and macro level to draw policy implications, and drive progress across the 5 outcomes of Green Growth. In particular, eCBA can be used in three broad ways to drive Green Growth policy and planning, in the context of this analysis: 1.

As a justification for public policy

2. As a tool for quantification of policy incentives. 3. As a tool for prioritization of policies Firstly, the results of an eCBA during the project appraisal process provide a strong evidence base for justifying public policy intervention. Green projects or the greening of existing projects 64

frequently generate significant social, economic and environmental benefits (positive externalities). However, conventional CBA and other conventional project appraisal tools usually do not measure these positive social returns and the private sector does not have any incentive to fund green policy interventions as long as the benefits of doing so are unclear i.e. are not monetized. Identifying these external costs and benefits provides a clear rationale for government action and strong evidence base for crafting policy interventions. For example, the results contained within this document suggest that there is a justification for subsidies for renewable energy (Palm Kernel Shell combustion) and/or carbon taxation, for subsidized finance to support tourist infrastructure development, and public support for ISPOtype Palm Oil certification or any other measure which encourages the implementation of Best Management Practices on plantations in East Kalimantan. Secondly, eCBA can help the specific quantification of policy incentives to help determine what the precise level of incentives should be. By valuing non-market externalities, this means that they can be levied as per-unit financial taxes or subsidies. This can be then used as a compensation fund for losers of negative externalities as well as an incentive to drive correct behaviors. While we have not specifically quantified policy incentives during the course of this analysis, it is possible to infer some broad quantitative conclusions for KSN Mamminasata. Thirdly, by providing a comparable methodology across projects, technologies and sectors, eCBA can help assess and compare the â&#x20AC;&#x2DC;size of the prizeâ&#x20AC;&#x2122; of different options; i.e., the total possible economic, social and environmental benefits. Therefore, eCBA not only makes the case for a particular intervention, and quantifies the policy resources required, but also helps prioritize which policies should be implemented given limited fiscal and economic resources. In this analysis the quantitative metrics suggest that policy efforts should be focused on either the largest absolute returns (Go Green Program/Clean Water Supply) or the largest relative returns (Takalar Maritime Zone), depending on the scalability of these projects.

Appendix 1: Technical Notes from Stakeholder Validation Workshop Stakeholder engagement on this project was undertaken at a number of levels. Focus Group Discussion (FGD) for eCBA scoping process for Kawasan Strategis Nasional (National Strategic Region or KSN) Mamminasata was held in Makassar on 27 November 2013. It was led by the Head of Spatial Planning and Settlement Agency, South Sulawesi Province and facilitated by the Directorate of Urban Planning, Ministry of Public Works57. Twenty participants from Spatial Planning and Settlement Agency, Fisheries and Marine Agency, Water Resources Management Agency, and Forestry Agency attended the event. During the FGD, GGGI explained the objective to perform eCBA analysis of KSN Mamminasata. The explanation includes the intervention process to embed Green Growth Assessment approach in KSN Mamminasata’s development plan to ultimately reach sustainable development. In his speech, the Head of Spatial Planning and Settlement Agency, who opened the FGD, presented the eleven priority programs to support KSN Mamminasata’s program. Further information was provided by the participants about the status of the following activities: development plan of Center of Point Indonesia, development plan of Maritime Takalar’s area, and development plan of land rehabilitation. They also shared their views on issues relating to water supply and waste management in Makassar. The basic data to build the baseline scenario and to allow green growth analysis in the eCBA was gathered through the FGD. The FGD was mainly attended by the government’s staff from public works agency; hence we only obtained technical data which were based on the elaboration of spatial plan. Following the FGD, we carried out one to one meetings with several related agencies to gather more data. However, most of them the data related to the period 2003 to 2008, with only limited data from 2011. Data related to the investment plan or budgeting activities could not be obtained. In order to manage expectations of local stakeholders, it was agreed with GGGI that the validation process of eCBA analysis was carried out with the Directorate of Urban Planning, Ministry of Public Work, in Jakarta. It was identified that apparently some of the information from the FGD’s participants needed to be better aligned, for example the ability to deliver development priorities by the agencies in Makassar such as the construction of roads, monorail, waste management, and provision of clean water. Therefore, the 11 priority activities could not be fully analyzed because of the lack of clear information from the local government. The eCBA of KSN Mamminasata therefore was validated based on inputs from the Ministry of Public Works, Jakarta, prior to more local validation.

Ministry of Public Works is one of the key agencies within GoI – GGGI Green Growth Program

Appendix 2: Discounted Cost Benefit Analyses

Reforestation of Jeneberang watershed Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

CAPITAL COSTS (£ 000s):

Cost of reforestation

11,629,592

A. Total Capital Costs (Annual) B. Total Capital Costs (Cumulative) REVENUE COSTS (£ 000s):

$ $

11,629,592 $ 11,629,592 $

$ $ $ $

11,629,592 11,629,592

Cost of maintaining forest C. Total Revenue Costs (Annual) D. Total Revenue Costs (Cumulative) E. Total Costs (Annual) (=A+C) F. Total Costs (Cumulative) (=B+D) BENEFITS (£ 000s):

Avoided dredging costs

$ 11,629,592 $

11,629,592

$ $ $ $ $

5,802,479 5,802,479 5,802,479 5,802,479 17,432,071

$ $ $ $ $

1,645,282 1,645,282 7,447,761 1,645,282 19,077,353

$ $ $ $ $

1,645,282 1,645,282 9,093,043 1,645,282 20,722,635

$ $ $ $ $

1,645,282 1,645,282 10,738,325 1,645,282 22,367,917

$ $ $ $ $

1,645,282 1,645,282 12,383,607 1,645,282 24,013,199

$ $ $ $ $

1,645,282 1,645,282 14,028,889 1,645,282 25,658,481

$ $ $ $ $

1,645,282 1,645,282 15,674,171 1,645,282 27,303,763

$ $ $ $ $

1,645,282 1,645,282 17,319,453 1,645,282 28,949,045

$ $ $ $ $

1,645,282 1,645,282 18,964,735 1,645,282 30,594,327

$ $ $ $ $

1,645,282 1,645,282 20,610,017 1,645,282 32,239,609

1,489,529

Other TEV of forest Use Value Direct use: - timber $ $ 79,465 - firewood $ $ 233 - non forest timber $ $ 57,390 - water supply regulation $ $ 630 Indirect use: - erosion control $ $ 59,402 - carbon sequestration - flood protection $ $ 36,310 - water transport $ $ - biodiversity $ $ 6,871 Non use value - intangible: option & bequest $ $ 4,363 - social cost: conflict and safety $ $ 6,871 G. Total Benefits (Annual) $ $ 1,741,064 H. Total Benefits (Cumulative) $ $ 1,741,064 NET UNDISCOUNTED COST* (=E-G) $ 11,629,592 $ 4,061,414 DISCOUNT FACTOR @ 3.5% p.a. 1.00 0.91 NET PRESENT COST* (Annual) $ 11,629,592 $ 3,692,195 NET PRESENT COST* (Cumulative) $ 11,629,592 $ 15,321,787 TOTAL NET PRESENT COST* = $ -51,904,719 TOTAL NET PRESENT VALUE = $ 51,904,719 ECONOMIC RATE OF RETURN n/a * A minus sign in these rows denotes a Net Present Value rather than a Net Present Cost.

$ $ $ $

158,930 $ 466 $ 114,781 $ 1,259 $

238,395 $ 699 $ 172,171 $ 1,889 $

317,860 $ 931 $ 229,561 $ 2,519 $

397,324 $ 1,164 $ 286,952 $ 3,149 $

476,789 $ 1,397 $ 344,342 $ 3,778 $

556,254 $ 1,630 $ 401,733 $ 4,408 $

635,719 $ 1,863 $ 459,123 $ 5,038 $

715,184 $ 2,096 $ 516,513 $ 5,667 $

794,649 2,328 573,904 6,297

118,804

178,207

237,609

297,011

356,413

415,816

475,218

534,620

594,022

$ $ $

72,621 13,741

$ $ $

108,931 20,612

$ $ $

145,241 27,483

$ $ $

181,551 34,353

$ $ $

217,862 41,224

$ $ $

254,172 48,095

$ $ $

290,482 54,966

$ $ $

326,793 61,836

$ $ $

363,103 68,707

$ $ $ $ $

8,727 13,741 1,992,599 3,733,663 -347,317 0.83 -287,039 15,034,748

$ $ $ $ $

13,090 20,612 2,244,134 5,977,797 -598,852 0.75 -449,926 14,584,822

$ $ $ $ $

17,453 27,483 2,495,669 8,473,467 -850,387 0.68 -580,826 14,003,996

$ $ $ $ $

21,816 34,353 2,747,204 11,220,671 -1,101,922 0.62 -684,207 13,319,789

$ $ $ $ $

26,180 41,224 2,998,739 14,219,410 -1,353,457 0.56 -763,991 12,555,798

$ $ $ $ $

30,543 48,095 3,250,274 17,469,684 -1,604,992 0.51 -823,615 11,732,183

$ $ $ $ $

34,906 54,966 3,501,809 20,971,494 -1,856,527 0.47 -866,084 10,866,099

$ $ $ $ $

39,270 61,836 3,753,344 24,724,838 -2,108,062 0.42 -894,024 9,972,075

$ $ $ $ $

43,633 68,707 4,004,879 28,729,718 -2,359,597 0.39 -909,727 9,062,348

$ $

Year 11

$ $

$ $ $ $ $

Year 12

$ 11,629,592 $

1,645,282 1,645,282 22,255,299 1,645,282 33,884,891

$ $ $ $ $

Year 13

$ 11,629,592 $

1,645,282 1,645,282 23,900,581 1,645,282 35,530,173

$ $ $ $ $

Year 14

$ 11,629,592 $

1,645,282 1,645,282 25,545,863 1,645,282 37,175,455

$ $ $ $ $

Year 15

$ 11,629,592 $

1,645,282 1,645,282 27,191,145 1,645,282 38,820,737

$ $ $ $ $

Year 16

$ 11,629,592 $

1,645,282 1,645,282 28,836,427 1,645,282 40,466,019

$ $ $ $ $

Year 17

$ 11,629,592 $

1,645,282 1,645,282 30,481,709 1,645,282 42,111,301

$ $ $ $ $

Year 18

$ 11,629,592 $

1,645,282 1,645,282 32,126,991 1,645,282 43,756,583

$ $ $ $ $

Year 19

$ 11,629,592 $

1,645,282 1,645,282 33,772,273 1,645,282 45,401,865

$ $ $ $ $

Year 20

TOTAL

$ $ $ $

11,629,592

$ 11,629,592 $

11,629,592

$ $ $

11,629,592

1,645,282 1,645,282 35,417,555 1,645,282 47,047,147

$ $ $ $ $ $ 1,645,282 $ 1,645,282 $ 37,062,837 1,645,282 $ 48,692,429

37,062,837 37,062,837

$ $ $ $ $

1,489,529

953,579 $ 2,794 $ 688,684 $ 7,557 $

653,425

712,827

772,229

831,631

891,034

950,436

$ $ $

399,413 75,578

$ $ $

435,724 82,448

$ $ $

472,034 89,319

$ $ $

508,344 96,190

$ $ $

544,654 103,060

$ $ $

$ $ $ $ $

47,996 75,578 4,256,414 32,986,132 -2,611,132 0.35 -915,186 8,147,162

$ $ $ $ $

52,359 82,448 4,507,949 37,494,081 -2,862,667 0.32 -912,134 7,235,028

$ $ $ $ $

56,723 89,319 4,759,484 42,253,566 -3,114,202 0.29 -902,074 6,332,954

$ $ $ $ $

61,086 96,190 5,011,020 47,264,585 -3,365,737 0.26 -886,304 5,446,650

$ $ $ $ $

65,449 103,060 5,262,555 52,527,140 -3,617,273 0.24 -865,946 4,580,704

$ $ $ $ $

$ $

1,191,973 $ 3,493 $ 860,855 $ 9,446 $

1,489,529

874,114 $ 2,561 $ 631,294 $ 6,927 $

$ $

1,112,509 $ 3,260 $ 803,465 $ 8,816 $

1,489,529

$ $ $ $

$ $

1,033,044 $ 3,027 $ 746,075 $ 8,186 $

1,489,529

$ $

1,271,438 $ 3,726 $ 918,246 $ 10,075 $

1,489,529

1,589,298 4,657 1,147,807 12,594

1,350,903 $ 3,958 $ 975,636 $ 10,705 $

1,430,368 $ 4,191 $ 1,033,026 $ 11,335 $

1,509,833 $ 4,424 $ 1,090,417 $ 11,965 $

1,009,838

1,069,240

1,128,643

580,965 109,931

$ $ $

617,275 116,802

$ $ $

653,585 123,672

$ $ $

689,896 130,543

69,813 109,931 5,514,090 58,041,229 -3,868,808 0.22 -841,965 3,738,739

$ $ $ $ $

74,176 116,802 5,765,625 63,806,854 -4,120,343 0.20 -815,188 2,923,551

$ $ $ $ $

78,539 123,672 6,017,160 69,824,014 -4,371,878 0.18 -786,321 2,137,231

$ $ $ $ $

82,903 130,543 6,268,695 76,092,708 -4,623,413 0.16 -755,965 1,381,266

$ $

$ $ $ $ $ $ $ $ $ $ $ $

48,692,429

1,188,045 353,606,513 726,206 137,414 87,266 137,414 360,126,742 $ 436,219,451 -358,481,460 $ 0.15 -53,285,985 $ -51,904,719

436,219,451 -387,527,022 -51,904,719

Municipal Solid Waste (MSW) to Energy NPV @ 10.0% p.a. TITLE: Waste to Energy - Methane Capture from solid waste and conversion to electricity YEAR : Year 0 Year 1 Year 2 Year 3 CAPITAL COSTS (£ 000s): Power plant Residual Value Grid connection costs

A. Total Capital Costs (Annual) B. Total Capital Costs (Cumulative)

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

8,893,695

$ $

8,893,695 $ 8,893,695 $

$ 8,893,695 $

8,893,695

485,922 $

485,922

REVENUE COSTS (£ 000s): O&M

C. Total Revenue Costs (Annual) D. Total Revenue Costs (Cumulative) E. Total Costs (Annual) (=A+C) F. Total Costs (Cumulative) (=B+D) BENEFITS (£ 000s):

$ $ $ $

Value of electricity generated Avoided CO2-equivalent emissions avoided

$ $

8,893,695 8,893,695

$ $ $ $

485,922 485,922 485,922 9,379,617

$ $

595,003 $ 3,436,210 $

G. Total Benefits (Annual) $ $ 4,031,214 H. Total Benefits (Cumulative) $ $ 4,031,214 NET UNDISCOUNTED COST* (=E-G) $ 8,893,695 $ -3,545,292 DISCOUNT FACTOR @ 3.5% p.a. 1.00 0.91 NET PRESENT COST* (Annual) $ 8,893,695 $ -3,222,993 NET PRESENT COST* (Cumulative) $ 8,893,695 $ 5,670,702 TOTAL NET PRESENT COST* = $ -108,621,427 TOTAL NET PRESENT VALUE = $ 108,621,427 ECONOMIC RATE OF RETURN 78% * A minus sign in these rows denotes a Net Present Value rather than a Net Present Cost.

$ $ $ $

$ $ $ $ $

485,922 971,844 485,922 9,865,539

$ $ $ $

1,078,269 $ 6,227,124 $

7,305,394 11,336,608 -6,819,472 0.83 -5,635,927 34,775

$ $ $ $ $

485,922 1,457,766 485,922 10,351,461

$ $ $ $

1,470,782 $ 8,493,924 $

9,964,706 21,301,314 -9,478,784 0.75 -7,121,551 -7,086,776

$ $ $ $ $

485,922 1,943,687 485,922 10,837,382

$ $ $ $

1,789,583 $ 10,335,035 $

12,124,618 33,425,932 -11,638,696 0.68 -7,949,386 -15,036,162

$ $ $ $ $

485,922 2,429,609 485,922 11,323,304

$ $ $ $

2,048,515 $ 11,830,399 $

13,878,914 47,304,845 -13,392,992 0.62 -8,315,994 -23,352,156

$ $ $ $ $

485,922 2,915,531 485,922 11,809,226

$ $ $ $

2,258,822 $ 13,044,943 $

15,303,765 62,608,611 -14,817,843 0.56 -8,364,286 -31,716,442

$ $ $ $ $

485,922 3,401,453 485,922 12,295,148

$ $ $ $

2,429,634 $ 14,031,405 $

16,461,039 79,069,650 -15,975,118 0.51 -8,197,761 -39,914,204

$ $ $ $ $

485,922 3,887,375 485,922 12,781,070

$ $ $ $

2,568,370 $ 14,832,616 $

17,400,986 96,470,636 -16,915,064 0.47 -7,891,002 -47,805,206

$ $ $ $ $

485,922 4,373,297 485,922 13,266,992

$ $ $ $

485,922 4,859,219 485,922 13,752,914

2,681,051 $ 15,483,365 $

2,772,572 16,011,909

18,164,417 114,635,053 -17,678,495 0.42 -7,497,408 -55,302,613

$ $ $ $ $

18,784,481 133,419,533 -18,298,559 0.39 -7,054,887 -62,357,500

Add Year Remove Year Year 11

Year 12

Year 13

Year 14

Year 15

Year 16

Year 17

Year 18

Year 19

Year 20

4,446,847

$ $

$ 8,893,695 $

4,446,847 13,340,542

485,922 $

485,922

$ $ $ $

485,922 5,345,141 485,922 14,238,835

$ $

2,846,906 $ 16,441,195 $

$ $ $ $ $

19,288,101 152,707,635 -18,802,179 0.35 -6,590,049 -68,947,549

$ $ $ $

$ $ $ $ $

485,922 5,831,062 485,922 14,724,757

$ $ $ $

2,907,281 $ 16,789,865 $

19,697,145 172,404,780 -19,211,223 0.32 -6,121,288 -75,068,837

$ $ $ $ $

485,922 6,316,984 485,922 15,210,679

$ $ $ $

2,956,317 $ 17,073,056 $

20,029,374 192,434,154 -19,543,452 0.29 -5,661,042 -80,729,879

$ $ $ $ $

485,922 6,802,906 485,922 15,696,601

$ $ $ $

2,996,145 $ 17,303,067 $

20,299,212 212,733,366 -19,813,290 0.26 -5,217,459 -85,947,337

$ $ $ $ $

485,922 7,288,828 485,922 16,182,523

$ $ $ $

3,028,494 $ 17,489,883 $

20,518,377 233,251,742 -20,032,455 0.24 -4,795,610 -90,742,948

$ $ $ $ $

485,922 7,774,750 485,922 16,668,445

$ $ $ $

3,054,767 $ 17,641,616 $

20,696,383 253,948,126 -20,210,462 0.22 -4,398,385 -95,141,333

$ $ $ $ $

485,922 8,260,672 485,922 17,154,367

$ $ $ $

3,076,107 $ 17,764,855 $

20,840,962 274,789,088 -20,355,040 0.20 -4,027,136 -99,168,469

$ $ $ $ $

485,922 8,746,594 485,922 17,640,289

$ $ $ $

3,093,439 $ 17,864,950 $

20,958,390 295,747,477 -20,472,468 0.18 -3,682,153 -102,850,622

$ $ $ $ $

485,922 9,232,516 485,922 18,126,210

$ $ $ $

485,922 9,718,437 4,932,769 23,058,980

3,107,517 $ 17,946,249 $

3,118,950 18,012,280

21,053,765 316,801,243 -20,567,843 0.16 -3,363,007 -106,213,629

$ $ $ $ $

21,131,230 337,932,473 -16,198,461 0.15 -2,407,798 -108,621,427

TOTAL

$ $ $ $ $ $ $

8,893,695 4,446,847 13,340,542

$ $ $ $ $ $ $ $

9,718,437 9,718,437

23,058,980

$ $

49,878,526 288,053,947

$ $ $

337,932,473

-314,873,493

-108,621,427

Generating higher value-add fish products NPV @ 10.0% p.a. TITLE: Maritime Estate - Generating value from fish waste YEAR : Year 0 Year 1 CAPITAL COSTS (£ 000s): Capital cost of plant investment

A. Total Capital Costs (Annual) B. Total Capital Costs (Cumulative) REVENUE COSTS (£ 000s):

582,921

$ $

582,921 $ 582,921 $

Labour Electricity Water Lab Testing Fees Cost of fish waste

C. Total Revenue Costs (Annual) D. Total Revenue Costs (Cumulative) E. Total Costs (Annual) (=A+C) F. Total Costs (Cumulative) (=B+D) BENEFITS (£ 000s): Fishmeal revenue Fishoil revenue

$ $ $ $

582,921 582,921

$ 582,921 $

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

$ 582,921 $

582,921

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $

2,050,901 2,050,901 2,050,901 2,633,822

$ $ $ $

2,050,901 4,101,802 2,050,901 4,684,723

$ $ $ $

2,050,901 6,152,704 2,050,901 6,735,624

$ $ $ $

2,050,901 8,203,605 2,050,901 8,786,526

$ $ $ $

2,050,901 10,254,506 2,050,901 10,837,427

$ $ $ $

2,050,901 12,305,407 2,050,901 12,888,328

$ $ $ $

2,050,901 14,356,309 2,050,901 14,939,229

$ $ $ $

2,050,901 16,407,210 2,050,901 16,990,130

$ $ $ $

2,050,901 18,458,111 2,050,901 19,041,032

$ $ $ $

2,050,901 20,509,012 2,050,901 21,091,933

7,829,351 $

7,829,351

5,480,546 $

5,480,546

G. Total Benefits (Annual) $ $ 13,309,896 H. Total Benefits (Cumulative) $ $ 13,309,896 NET UNDISCOUNTED COST* (=E-G) $ 582,921 $ -11,258,995 DISCOUNT FACTOR @ 3.5% p.a. 1.00 0.91 NET PRESENT COST* (Annual) $ 582,921 $ -10,235,450 NET PRESENT COST* (Cumulative) $ 582,921 $ -9,652,529 TOTAL NET PRESENT COST* = $ -95,271,252 TOTAL NET PRESENT VALUE = $ 95,271,252 ECONOMIC RATE OF RETURN 1931% * A minus sign in these rows denotes a Net Present Value rather than a Net Present Cost.

$ $ $ $ $

13,309,896 26,619,793 -11,258,995 0.83 -9,304,955 -18,957,484

$ $ $ $ $

13,309,896 39,929,689 -11,258,995 0.75 -8,459,050 -27,416,534

$ $ $ $ $

13,309,896 53,239,585 -11,258,995 0.68 -7,690,045 -35,106,579

$ $ $ $ $

13,309,896 66,549,482 -11,258,995 0.62 -6,990,950 -42,097,529

$ $ $ $ $

13,309,896 79,859,378 -11,258,995 0.56 -6,355,409 -48,452,938

$ $ $ $ $

13,309,896 93,169,275 -11,258,995 0.51 -5,777,645 -54,230,583

$ $ $ $ $

13,309,896 106,479,171 -11,258,995 0.47 -5,252,404 -59,482,987

$ $ $ $ $

13,309,896 119,789,067 -11,258,995 0.42 -4,774,913 -64,257,900

$ $ $ $ $

13,309,896 133,098,964 -11,258,995 0.39 -4,340,830 -68,598,731

Year 11

$ $

Year 12

$ 582,921 $

Year 13

$ 582,921 $

Year 14

$ 582,921 $

Year 15

$ 582,921 $

Year 16

$ 582,921 $

Year 17

$ 582,921 $

Year 18

$ 582,921 $

Year 19

$ 582,921 $

Year 20

$ 582,921 $

582,921

TOTAL

$ $ $ $ $ $ $

582,921 582,921

939,861 443,520 373,252 1,626,240 37,635,152 41,018,024

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $ $

46,993 22,176 18,663 81,312 1,881,758

$ $ $ $

2,050,901 22,559,913 2,050,901 23,142,834

$ $ $ $

2,050,901 24,610,815 2,050,901 25,193,735

$ $ $ $

2,050,901 26,661,716 2,050,901 27,244,636

$ $ $ $

2,050,901 28,712,617 2,050,901 29,295,538

$ $ $ $

2,050,901 30,763,518 2,050,901 31,346,439

$ $ $ $

2,050,901 32,814,419 2,050,901 33,397,340

$ $ $ $

2,050,901 34,865,321 2,050,901 35,448,241

$ $ $ $

2,050,901 36,916,222 2,050,901 37,499,143

$ $ $ $

2,050,901 38,967,123 2,050,901 39,550,044

$ $ $ $

$ $ $ $ $ $ $ 2,050,901 $ 41,018,024 2,050,901 $ 41,600,945

41,600,945

7,829,351 $

156,587,016

5,480,546 $

5,480,546 $ $ $ $ $ $ 13,309,896 $ 266,197,927 -11,258,995 $ 0.15 -1,673,578 $ -95,271,252

109,610,911 266,197,927

$ $ $ $ $

13,309,896 146,408,860 -11,258,995 0.35 -3,946,209 -72,544,940

$ $ $ $ $

13,309,896 159,718,756 -11,258,995 0.32 -3,587,463 -76,132,402

$ $ $ $ $

13,309,896 173,028,653 -11,258,995 0.29 -3,261,330 -79,393,732

$ $ $ $ $

13,309,896 186,338,549 -11,258,995 0.26 -2,964,845 -82,358,578

$ $ $ $ $

13,309,896 199,648,445 -11,258,995 0.24 -2,695,314 -85,053,892

$ $ $ $ $

13,309,896 212,958,342 -11,258,995 0.22 -2,450,285 -87,504,177

$ $ $ $ $

13,309,896 226,268,238 -11,258,995 0.20 -2,227,532 -89,731,709

$ $ $ $ $

13,309,896 239,578,134 -11,258,995 0.18 -2,025,029 -91,756,738

$ $ $ $ $

13,309,896 252,888,031 -11,258,995 0.16 -1,840,936 -93,597,674

$ $ $ $ $

-224,596,982 -95,271,252

Copyright ÂŠ September 2014 The Global Green Growth Institute 19F Jeongdong Building, 21-15, Jeongdong-gil, Jung-gu, Seoul, Korea 100-784 The Global Green Growth Institute does not make any warranty, either express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or any third partyâ&#x20AC;&#x2122;s use or the results of such use of any information, apparatus, product, or process disclosed of the information contained herein or represents that its use would not infringe privately owned rights. The text of this publication may be reproduced in whole or in part and in any form for educational or nonprofit uses, provided that acknowledgement of the source is made. Resale or commercial use is prohibited without special permission. The views and opinions of the authors expressed herein do not necessarily state or reflect those of the Global Green Growth Institute.