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Good practice Imported

Indonesia's Ecological Fiscal Transfer (TAPE/TAKE) — Formula-Based Intergovernmental Payments Rewarding Environmental Performance

Indonesia · Jakarta · See the Indonesia profile · See the Jakarta profile

Evidence: Descriptive / self-reported Top 58% 40/100 · Ask Evidence Copilot about this practice

Since 2019, Indonesia's Ministry of Finance has channelled part of a transfer fund that rose 50% to USD 1bn in 2020 toward districts partly on environmental performance, with Central Java formalising a five-criteria ecological scoring formula in 2023.

~1 USD billion
Special Allocation Incentive Fund (DID) envelope (2020)
50 %
DID increase vs 2019 (2020)
1.2 %
District/city environmental budget allocation (2020 finding)
Indonesia's Ecological Fiscal Transfer (TAPE/TAKE) — Formula-Based Intergovernmental Payments Rewarding Environmental Performance

Details

Maturity
Scaling
Promoter
Indonesian Ministry of Finance; Ministry of Home Affairs; Ministry of Environment and Forestry; Central Java Provincial Government
Period
2019-2024
Keywords
ecological fiscal transfers, forest conservation, intergovernmental finance, environmental performance-based budgeting

Context

Indonesia has built a multi-level ecological fiscal transfer system redistributing government revenue to local governments partly on environmental-performance criteria, via TAPE (province to district) and TAKE (district to village).

Activities

Ministry of Finance Regulation PMK No. 141/2019 restructured the Special Allocation Incentive Fund to include environmental criteria; Central Java's Governor Regulation No. 61/2023, developed with BIOFIN/UNDP and BAPPENAS, formalises a five-pillar scoring formula determining district/city BANKEU funding.

Results

The DID envelope rose to roughly USD 1 billion for 2020, a 50% increase on 2019; discussions on adopting TAPE/TAKE-style mechanisms have extended to 13 provinces and 26 districts/cities, building on initial adoption in six regions.

Conclusions

No independent ex-post evaluation of forest-cover, water-quality or emissions outcomes attributable to TAPE/TAKE has yet been published.

Implementation
Indicative cost
High (€500k–€5M)
Time to results
Long (> 3 years)
Staffing & skills
Indonesian Ministry of Finance, Ministry of Home Affairs, Ministry of Environment and Forestry, Central Java Provincial Government, BIOFIN/UNDP technical support

Conditions for success

  • Formalised scoring formula adopted by provincial regulation
  • Continued technical assistance
  • Expansion coordination across provinces/districts

Common failure modes

  • No independent ex-post ecological evaluation published yet

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