Socio-economic footprint of the energy transition: Indonesia.
Parajuli, B., Seck, G. S., Casals, X., Guadarrama, C. & Lehr, U. (2023): Socio-economic footprint of the energy transition: Indonesia. International Renewable Energy Agency (IRENA), Abu Dhabi.Abstract
With more than 270 million inhabitants (UN, 2022) and more than 17 500 islands (MOFARI, 2017), Indonesia is the fourth-most-populous country in the world and the largest economy in Southeast Asia (World Bank, n.d.). The country has enjoyed impressive growth over the years. Rapid economic growth has led to a reduction in poverty in recent decades and supported socio-economic development. As an archipelago nation, Indonesia is exceptionally vulnerable to climate change. This is in addition to the large environmental footprint of rapid growth, which in Indonesia is closely tied to natural resources, including the country’s energy resources, waters, land and forests. The ongoing COVID-19 pandemic as well as other external factors such as slowing global economic growth, and geopolitical shocks all increase short-term pressures on Indonesia in the midst of the larger, unfolding climate crisis.
The government of Indonesia has realised the urgency of addressing climate change and begun to establish different sets of national targets and action plans directed at energy efficiency, greenhouse gas (GHG) emissions and renewable energy deployment. In 2016, the country submitted its first Nationally Determined Contribution (NDC) towards reducing GHG emissions under the Paris Agreement, announcing the target of reducing GHG emissions unconditionally to 29% and conditionally to 41% compared to the business-as-usual (BAU) scenario by the year of 2030 (UNFCCC, 2016). Under the BAU Indonesia would release approximately 2.869 gigatonnes of carbon dioxide equivalent (GtCO2eq) by 2030. In the conditional scenario, Indonesia is projected to produce 132.74 terawatt hours of renewable energy by 2030, which is equivalent to 21.65 gigawatts of capacity (about one-third of Indonesia’s current installed power capacity). In the unconditional scenario, 19.6% of generated power could come from renewables by 2030. The NDC also stipulates the implementation of biodiesel blending mandates in the transport sector: 90% in the unconditional scenario and 100% in the conditional. Indonesia’s updated NDC in 2021 does not change this target but does propose new carbon tax policies to support it, in addition to setting a net-zero target by 2060 (UNFCCC, 2021). [...]
