June 27, 2022

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As G20 chair, coal-heavy Indonesia sends mixed signals on green transition

2 min read

Indonesia is using its stint as president of the Group of 20 (G20) to push for more international funding for the green energy transition in developing nations — but analysts say Jakarta needs to back up its calls with more ambitious plans to cut emissions at home. 

The world’s top exporter of thermal coal and its eighth-biggest carbon emitter, Indonesia has made a sustainable energy transition one of three focuses for its maiden, year-long presidency of the G20 group of the world’s 20 largest economies. 

The Southeast Asian nation plans to phase out coal for electricity by 2056 and has brought forward its net-zero emissions target from 2070 to 2060 or sooner — but weaning itself off the dirty, climate-heating fuel remains a challenge. 

“The key thing for Indonesia is we have to find the balance,” said Fabby Tumiwa, executive director of the Institute for Essential Services Reform, an independent think-tank which also advises the government on energy policies. 

“Every country wants to prioritize their energy security and affordability because people are upset with higher energy prices, and that’s very risky for the government,” he added. 

Coal is not only one of Indonesia’s main export commodities besides palm oil, but it also generates about 60% of electricity in the archipelago of 270 million people, where nearly 30 million live below the national poverty line, on about $1 a day. 

In coal-producing regions, including East Kalimantan province which accounts for nearly half of national output, about a third of local economic growth is attributed to coal, according to Mr. Tumiwa. 

“There is a lot at stake in Indonesia’s energy transition — it could make or break, and financing is key,” he told the Thomson Reuters Foundation by phone from Jakarta. 

INDONESIA TRANSITION PACKAGE? 

Since assuming the G20 presidency late last year, Indonesian President Joko Widodo has repeatedly urged rich governments to provide finance and…

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2022-04-08 03:02:54

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