This country report is one of the outputs of Advancing Inclusive and Resilient Urban Development Targeted at the Urban Poor, a regional technical assistance (TA) project of the Asian Development Bank (ADB). It examines the need to establish a link between efforts to reduce poverty and strengthen climate resilience. Climate and disaster risk poses a serious threat to the socioeconomic development of Indonesia and undermines the country’s hard-earned development gains. The risks are expected to increase in the future with climate change, with its widespread impacts on four sectors—agriculture, water, marine and coastal, and health—as prioritized in the Climate Resilience Development Policy (Kebijakan Pembangunan Berketahanan Iklim, or PBI) 2020–2045. The major brunt of climate risk will be faced by 26.42 million Indonesians who live below the poverty line and have limited resources and capacity. The climate shocks and stresses will also force the near-poor population hovering marginally above the national poverty line to fall into poverty.
This report finds that given the scale of climate risk Indonesia faces, poverty reduction programs can effectively support climate resilience through additional climate investments in five key strategic areas. This includes (i) investing in strengthening awareness on future climate risk for urban poverty reduction; (ii) ensuring climate policies recognize the importance of addressing the underlying drivers of vulnerability for advancing climate resilience; (iii) scaling up investments in “no regret” or “low regret” solutions for building resilience; (iv) implementing programs dedicated for building resilience of the urban poor; and (v) investing in strengthening financial systems and products to promote resilience of the urban poor.