Luhut, on Decarbonization: Indonesia Will Not Take Orders
The process of energy transition and decarbonization in developing countries like Indonesia will be carried out in phases.
By
AGNES THEODORA,
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KOMPAS/HENDRA A SETYAWAN
Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan (center), Minister of Investment/Investment Coordinating Board (BKPM) Head Bahlil Lahadalia (right) and Indonesian Chamber of Commerce and Industry (Kadin) Chairman Arsjad Rasjid witness the signing of business cooperation agreements between various companies on the sidelines of the opening of the 2022 Indonesia Net Zero Summit in Nusa Dua, Bali, on Friday (11/11/2022).
NUSA DUA, KOMPAS – Indonesia's efforts to negotiate a carbon emissions-reduction program that will not harm economic growth are starting to bear fruit. The process of energy transition and decarbonization in developing countries like Indonesia will be carried out in phases. It will be conducted using affordable technology and costs, and will be done at the appropriate time.
Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan shared his experience in negotiating with the United States on cooperation for the development of new and renewable energy (NRE) for reducing carbon emissions, during a speech at the opening of the B20 Summit Side Event in Nusa Dua, Badung, Bali, on Friday (11/11/2022).
According to Luhut, developed countries have thus far demanded that Indonesia and other developing countries carry out their decarbonization and energy transition processes at the same speed as developed countries. However, as Luhut points out, conditions between these two types of countries cannot be equated.
G20 countries contribute up to 80 percent of global carbon emissions. However, Indonesia's carbon emissions are only 2.3 tons per capita, which is still below the 4.5 tons-per-capita baseline limit for carbon emissions. Its position places it far below the US, with its 14.7 tons per capita in carbon emissions.
During a meeting with US Treasury Secretary Janet Yellen, Luhut said that it would be unfair for the US to ask Indonesia to reduce its carbon emissions at the same level as the US, when the carbon emissions both countries produced were far different.
“I suggest to you: How about you lower [your carbon emissions], while we boost ours. Only after we are both at the same level will we lower our emissions together. That's just fair. She [Yellen] finally told me, that made sense," Luhut said.
This meeting resulted in an agreement to form a joint task force to negotiate further cooperation between the Indonesian and US governments for the development of NRE and to encourage decarbonization in Indonesia.
"I sent three young people from my office to negotiate with them [the US]. They debated for about eight months, until finally two days ago they managed to agree and come to a decision," Luhut said.
KOMPAS/HENDRA A SETYAWAN
Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan delivers a presentation on Indonesia's economic conditions at the opening of the 2022 Indonesia Net Zero Summit in Nusa Dua, Bali, on Friday (11/11/2022).
The results of this cooperation agreement are scheduled to be announced during the G20 Summit, which will be held on Nov. 15-16. President Joko Widodo has planned to hold a bilateral meeting with US President Joe Biden.
According to Luhut, tough negotiations such as these demonstrate just how Indonesia cannot have developed countries driving and dictating terms when it comes to energy transition processes. "The Indonesia of today is different from the Indonesia of eight years ago. We can now negotiate with anyone, no one can dictate things to us," Luhut said.
Requirements
There are four requirements that Indonesia put forward in its negotiations with the US. First is that policies on climate change should not interfere with Indonesia's fast economic growth. Second is that there has to be support in the form of low-cost and affordable technology. Third is that energy transition must be done at the appropriate time.
We currently have good economic growth. That's very important.
Fourth is that loans or financing provided to Indonesia to carry out its energy transition must come from countries with good credit ratings.
"We currently have good economic growth. That's very important. Second, the technology must be affordable. Third, things must be done in a timely manner. Fourth, any loans we receive later must come from a country with a triple rating," Luhut said.
Obstacles
According to Indra Darmawan, who is the deputy for investment planning at the Ministry of Investment/Investment Coordinating Board (BKPM), there are three obstacles that need to be overcome in order to carry out the process of decarbonization evenly across all regions in Indonesia.
First is determining how to measure the carbon emissions that have been generated and strategies to reduce them. Second is encouraging the same strong motivation in all areas for undergoing energy transitions. Third is intensifying education about decarbonization and zero carbon emissions.
Literacy must be increased so that compliance also increases. If people understand and that requirement has been fulfilled, efforts toward sustainable development will be easier
He said that regions that rely heavily on fossil energy can certainly have less of a motivation to transition than those that do not rely too much on fossil energy, due to the fact that such energy transitions can lead to the loss of regional income sources.
"As such, we must be very careful in issuing progressive policies, as they may end up becoming repressive and unfair. We have to admit that there are regions and poor communities that are still very dependent on fossil energy," Indra said.
He also highlighted the issue of energy literacy, with the reason being that the issue of climate change and the importance of decarbonization is currently still considered too "idealistic" and not "grounded". "Literacy must be increased so that compliance also increases. If people understand and that requirement has been fulfilled, efforts toward sustainable development will be easier," he said.
KOMPAS/HENDRA A SETYAWAN
Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Arsjad Rasjid
It was during this same occasion at the B20 Summit Side Event that the Indonesian Chamber of Commerce and Industry (Kadin), as the organizer of the B20 forum, held its Net Zero Summit event.
The chamber launched a Net Zero Hub program initiative to assist the industrial sector in decarbonizing based on internationally applicable Science Based Targets Initiative (SBTi) standards. The program was initiated by the chamber in conjunction with the United Nations Development Program (UNDP).
According to the chairman of the Indonesian Chamber of Commerce and Industry, Arsjad Rasjid, more than 50 companies to date have registered as part of the Net Zero Hub. This number is expected to continue to grow in the future. "The high interest in this initiative shows that the industrial sector is starting to take the issue of climate change seriously," Arsjad said.
