According to Bloomberg article, climate change is one of the most complex and severe threats confronting humanity. Between 2030 and 2050, rapidly rising temperatures are expected to cause approximately 250,000 additional deaths per year (WHO), and will cut around 37% from global GDP this century (UCL). Guided by the UNFCCC’s principle of common but differentiated responsibilities, the G20 has an urgent impetus to ensure that the costs of the global low-carbon transition are shared equitably, especially as annual climate adaptation costs across developing countries soar from an estimated $70 billion today to $500 billion by 2050 (Bloomberg).
As a country that is especially vulnerable to the effects of climate change (World Economic Forum), Indonesia is determined to transition to renewable energy. But this is not an overnight shift, nor an individual effort. Through its G20 presidency, Indonesia is stepping up the G20's leadership on the sustainable energy transition, with a focus on removing barriers to finance and accelerating international cooperation.
Ahead of the 17th G20 Summit in November 2022, Bloomberg Media Studios spoke to Indonesia’s Deputy Minister of Maritime Affairs and Investment, Nani Hendiarti, on how Indonesia is building political momentum for a more resilient, inclusive and financially robust energy transition.
Deputy Minister Nani Hendiarti: Energy security is one of the biggest global challenges right now. As the president of the G20, Indonesia recognizes that the global impact of the war between Russia and Ukraine is affecting global energy accessibility and has exposed the vulnerabilities of the global energy supply.
Indonesia’s G20 presidency will deliver the urgency of decarbonizing energy systems, especially in a climate of uncertainty. The transition from coal to clean energy is complex. We need to work together. In the just energy transition, we need access to affordable energy that considers social and economic impact alongside the context of the environment. This includes increasing energy efficiency as well as accelerating the Climate Investment Funds and hastening renewable energy development.
As a developing country, Indonesia still has a big program of downstream industries in the eastern part of the country. In the next five years, will we still have the right mix of energy sources to support this industry? We need to balance the energy transition with economic growth, and ensure equitable and inclusive transitions for workers in brown industries. Not only do we need to protect affected communities against the risks of climate change, we also have to ensure they benefit from the opportunities presented by the energy transition.
Deputy Minister Nani Hendiarti: The impact of climate change is already in front of us. Indonesia’s commitment to climate action is certainly strong. We have set ambitious targets of adding 21 GW in renewable energy capacity by 2030, and fully transitioning to clean energy in the medium term.
Our overall goal for 2030 is to reduce emissions by 29% through our own efforts, and by 41% with international support. This is our commitment at COP26, where every country reviewed their Nationally Determined Contributions under the Paris Agreement and pledged to turn away from business as usual.
To achieve this, Indonesia is taking concrete steps toward climate protection and climate change mitigation through key initiatives like mangrove rehabilitation and pilot projects on the early retirement of coal-fired power plants. We are also leading by example through our Energy Transition Mechanism Country Platform, which has three components: emissions reduction facilities, renewable energy development and blended finance. During the G20 finance ministers’ meeting in Bali, Minister of Finance Sri Mulyani announced that Indonesia’s Country Platform investment will come from blended finance through PT SMI, a state-owned enterprise responsible for national infrastructure development.
Deputy Minister Nani Hendiarti: Reducing carbon emissions requires global commitment. Developing countries such as Indonesia have the resources to reach more ambitious climate targets. We see decarbonization as a great opportunity, but lack sufficient finance. We need financial support from international organizations and developed countries for our efforts to reduce emissions.
At COP26, there was a commitment from developed countries to support developing countries’ climate goals: a commitment of $100 billion per year. This commitment needs to be implemented. If we look at the background of carbon contributions, we see a comparable difference between developing and developed countries. There is a big gap in carbon emissions per capita: Indonesia emits around 2 metric tons per capita, for instance, while the US emits around 15 metric tons per capita. Globally, the average is around 4 metric tons per capita.
Indonesia hopes to rally international financial support for the energy transition – not only for our country, but all developing countries. Through Indonesia’s G20 initiative, the Global Blended Finance Alliance will scale up blended finance to help close the Sustainable Development Goals financing gap. This Alliance is still in progress, but the Development Working Group, led by Indonesia’s Ministry of National Development Planning, has already received support from all the G20 countries. Together, we will launch a special facility that supports green infrastructure projects and renewable energy development in developing countries – continuing an important conversation that began during the annual meeting of the IMF and World Bank in 2018.
Deputy Minister Nani Hendiarti: Through the Energy Transition Working Group and the Environment Deputies Meeting and Climate Sustainability Working Group hosted by Indonesia, the G20 agreed on three main strategies in accelerating the energy transition: access to affordable energy, technology and finance. In several chair summaries, we have reached areas of clear consensus and are engaged in further dialogue and collective action.
As a part of the Long-Term Strategy for Low Carbon and Climate Resilience 2050 that Indonesia submitted to the UNFCCC in July 2021, we are also in discussions with the US and Japan on establishing a Just Energy Transition Partnership for Indonesia. This will extend international support for South Africa's phase-out of coal, which was a key outcome of COP26, to other traditionally coal-dependent economies. We hope to use the momentum of Indonesia’s G20 presidency to announce this partnership, which is a key step in the global pathway to universal, affordable and reliable access to clean energy.
The G20’s commitments are hand in hand with the Sustainable Development Goals as well as countries’ own Nationally Determined Contributions, which share a 2030 timeline. To solve the world's biggest challenge, we have to work very hard globally and give this our very best effort. It takes collective accountability and action.
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Published on November 17, 2022 9:43 AM (GMT+8)Last Updated on November 17, 2022 9:43 AM (GMT+8)
