Jokowi: Indonesia Needs IDR 15,439 Trillion for Energy Transition
Indonesia needs 1 trillion US dollars or approximately Rp. 15,439 trillion to carry out the energy transition to achieve "net zero emissions" by 2060.
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President Joko Widodo delivered the opening speech for the World Climate Action Summit agenda at the 28th Conference of Parties on Climate Change (COP28) in Dubai, on Friday (1/12/2023).
DUBAI, KOMPAS - Developing countries like Indonesia still need large funding to improve energy transition as an effort to overcome the climate crisis. However, funding commitments without realization will not be enough. Indonesia also needs to prepare its political policies internally.
President Joko Widodo, in his opening speech on the World Climate Action Summit (WCAS) agenda at the 28th Conference of the Parties on Climate Change (COP28) in Dubai, conveyed the need for energy transition funding to absorb all the carbon produced by human activities into the atmosphere in the next 37 years.
"Indonesia needs an investment of more than 1 trillion US dollars for net zero emissions by 2060," said the President on Friday (1/12/2023) afternoon Dubai time, United Arab Emirates.
Indonesia requires more than 1 trillion US dollars in investment for net zero emission by 2060.
In the transition of energy, the President continued, Indonesia has accelerated the transition to new and renewable energy, especially solar energy, wind, hydro, geothermal, and ocean currents. Indonesia is also accelerating the development of biodiesel, bioethanol, and bioaviation fuel.
In front of the host of the event in the United Arab Emirates, the President also recounted the results of the two countries' cooperation in the form of the recently inaugurated Cirata Floating Solar Power Plant. The solar power source, which can generate 192 megawatts of electricity, is said to be the largest in Southeast Asia.
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The atmosphere at the location of the COP28 High-Level Conference on Climate Change at Dubai Expo, Dubai, United Arab Emirates, on Thursday (30/11/2023).
Indonesia also takes a transition approach through reducing coal production and consumption, while dealing with the social consequences that will arise due to the loss of economic sources from fossil energy causing the climate crisis.
Indonesia achieved this through the funding mechanism of the Just Energy Transition Partnership (JETP) alongside other developing countries such as South Africa, Vietnam, and Senegal. JETP was first launched at COP26 in Glasgow.
Since Indonesia made this choice, only approximately 7 billion US dollars have been obtained.
The funding mechanism from developed countries has set a commitment of 21.5 billion US dollars or IDR 333.8 trillion (with an exchange rate of IDR 15,527 per US dollar). Since Indonesia made this choice, only about 7 billion US dollars have been obtained.
The funds obtained are mostly in the form of soft loans rather than grants (Kompas.id, 2/12/2023).
In a speech lasting less than 10 minutes, the President hopes that world development banks can increase their capacity for funding energy transition with low interest rates. In addition, he also invited collaboration from bilateral partners, private investments, philanthropists, and friendly nations.
”The targets of the Paris Agreement and net zero emissions can only be achieved if we can solve the problem of funding the energy transition. "That's where world problems can be solved," he said.
Also read: Indonesia Calls for Energy Transition Funding
The World Bank announced yesterday its commitment to funding climate crisis in developing countries of up to 40 billion US dollars by releasing 45 percent of its annual funding from July 1, 2024, until June 30, 2025. This commitment represents an increase of approximately 9 billion US dollars from the previous target of only 35 percent.
World Bank President Ajay Banga stated during a session at COP28 that 50 percent of funding will be used for mitigation and the other 50 percent for adaptation for those most affected by climate change. World Bank Group projects will also focus on preserving ecosystems and biodiversity to protect human health and the planet.
President Joko Widodo had a bilateral meeting with United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan (MBZ) on the sidelines of the World Climate Action Summit (COP28) in Dubai, United Arab Emirates, on Friday (1/12/2023).
Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa, to Kompas, said that the Paris Agreement agreed at COP21 in 2015 mandated that funding for the climate crisis be provided primarily by developed countries.
Based on numerous scientific studies, developed countries are responsible for climate change due to their exploitation of natural resources which has triggered the climate crisis.
Also read: A Year Passes the Promise of IDR 300 Trillion JETP Program
Developed countries at the forefront of renewable energy industries also need to accelerate theirnet zero emissionstargets more than developing countries. Moreover, according to a study by the International Energy Agency (IEA), peak emissions from the energy industry in developed countries will arrive in 2030.
”Net zero emissions they must be in 2040, if 2050 is too long. "If we read the IPCC report, this is to provide space for developing countries, whose economies have not yet been diversified, to still be able to use fossil energy to develop, alleviate poverty, while diversifying the economy," said Fabby.
President Joko Widodo conducted a bilateral meeting with Dutch Prime Minister Mark Rutte on the sidelines of the COP28 Summit in Dubai, United Arab Emirates, on Friday (1/12/2023).
In this case, Fabby continued, Indonesia could be a leader in collecting funding responsibilities from developed countries. "I think Indonesia must take that leadership (at COP28)," he said.
Meanwhile, Indonesia also needs to improve its domestic commitments regarding energy transition. For example, the government has yet to adequately address energy subsidies that currently result in cheap and misdirected pricing. "We are still subsidizing fossil energy, subsidizing fuel. That's what keeps fuel prices low," he said.
Also read: The Inevitability of Oil and Gas Companies in the Midst of the Climate Change Regime
Indonesia is also deemed to still struggle with the improvement of domestic funding to increase the implementation of new and renewable energy. For instance, the improvement of subsidies makes it difficult for the society to detach from fossil energy.
”The problem, right, is political will. Try to fix fuel and LPG subsidies. If we reduce it as a mitigation action, fuel consumption will be more rational because it is no longer subsidized. "So, instead of adding to it, like one of the presidential candidates who said that fuel will be provided for free," he said.
This article was produced as part of the Climate Change Media Partnership 2023, a journalism scholarship hosted by Earth Journalism Network Internews and Stanley Center for Peace and Security.
