Have coal, will use it: Indonesia’s climate stance raises questions

JAKARTA — Recent statements by top Indonesian officials have climate activists questioning the country’s commitment to transitioning away from fossil fuels and toward renewable energy.

At an event in Jakarta on July 21, Finance Minister Sri Mulyani Indrawati pushed back against calls by the international community for Indonesia to end its reliance on coal by retiring its coal-fired power plants.

“If we have coal, then we should use it. European countries, the U.S., and even Japan still use coal. Why, when Indonesia wants to use [coal], does it become an issue?” she said.

That same week, at an energy summit of leaders of the G20 economies in India, Indonesia was among the countries that objected to a proposed road map to phase out the use of fossil fuels without the capture of emissions in the global energy mix.

Yudo Dwinanda Priaadi, an assistant to the energy minister, said Indonesia had objected because the country planned to use abatement and removal technologies to reduce carbon dioxide emissions from the burning of coal. He told The Jakarta Post that installing carbon capture and storage (CCS) technology at existing coal plants is the “easiest thing to do” to cut emissions.

The push against phasing out fossil fuels is reportedly led by Saudi Arabia, the world’s second-largest oil producer. Saudi Arabia has opposed more ambitious language, particularly in reference to the phaseout of fossil fuels, in U.N. climate negotiations.

The G20 meeting not only failed to come into an agreement on speeding up the phaseout, but the final statement after the meeting didn’t even mention coal.

Heavy reliance on coal

Indonesia is the world’s third-largest coal producer and a major consumer of the fossil fuel, which accounts for 43% of the country’s energy mix. Last year, its coal consumption reached a record high, catapulting the country to become the world’s sixth-highest fossil CO2 emitter, behind Japan.

Coal burning is thought to be responsible for more than 0.3° Celsius of the 1°C (0.5° Fahrenheit out of 1.8°F) increase in global average temperatures since pre-industrial levels. This makes it the single largest source of global temperature rise.

Under the Paris Agreement, to which Indonesia is a signatory, countries have pledged to limit the global temperature rise to 1.5°C (2.7°F). A key part of that pledge for most countries, including Indonesia, is transitioning away from fossil fuels and toward clean energy. That includes retiring coal-fired power plants earlier than their expected operating age, and also speeding up the development of renewable energy.

But when the G7 group of richest countries proposed a goal of tripling renewable energy capacity by 2030 during the G20 meeting in India, Indonesia and other fossil fuel producers like Saudi Arabia, Russia and China rejected the proposal.

This marks a setback for Indonesia, given its announcements of more ambitious emissions reduction and coal phaseout goals, said Adila Isfandiari, a climate and energy campaigner at Greenpeace Indonesia.

In 2021, the government said it would start retiring coal-fired power plants for good, and in 2022 said it would decrease its carbon emissions by 32% in 2030, effectively setting itself a higher goal under the Paris Agreement.

The ultimate goal is to achieve net-zero emissions by 2060 or earlier.

To achieve these climate goals, Indonesia was able to secure a number of funding commitments from rich countries and banks. One of them is the Just Energy Transition Partnership (JETP), a funding scheme where the G7 countries plus Denmark and Norway have agreed to channel $20 billion to fund Indonesia’s transition to clean energy and coal retirement.

The JETP scheme was announced during last year’s G20 summit, which was hosted in Indonesia.

“The JETP agreement was a promising start as it showed goodwill during last year’s G20 summit,” Adila told Mongabay. “But why was there a setback at this year’s G20 meeting? We showed our spirit in energy transition [last year], but when we were offered a target [to phase out coal and triple renewable capacity], we rejected it.”

The JETP agreement is supposed to serve as a catalyst for future funding commitments to support Indonesia’s climate and energy transition agenda. But Indonesia’s stance at the recent G20 meeting as well as Finance Minister Sri’s statement could discourage other countries and financial institutions from investing in Indonesia’s climate programs, Adila said.

“The JETP is a good precedent and if it succeeds, Indonesia will be able to tap into other sources of funding,” she said. “But if the JETP in Indonesia fails, then it will set a bad example for financing.”

Adila also said such statements from Indonesian officials demonstrate little sense of responsibility. While Indonesia is classified as a developing country, it’s still a member of G20 countries with the biggest economies, which together account for 80% of global emissions and gross domestic product, she noted.

‘Era of global boiling’

The recent developments by Indonesian officials come as global temperatures hit record highs, with this past July the hottest month on record. With heat waves sweeping the Northern Hemisphere and devastating wildfires in countries such as Greece, Italy and Algeria, “the era of global warming has ended” and “the era of global boiling has arrived,” United Nations Secretary-General António Guterres said.

“The consequences are clear and they are tragic: children swept away by monsoon rains; families running from the flames; workers collapsing in scorching heat,” he said.

Guterres called on world leaders, particularly those from the G20, to step up for climate action and climate justice as they are responsible for the majority of global emissions. He said G20 members must adopt more ambitious emissions reduction targets and for all countries to try to reach net zero by 2050.

But that call might be in vain if Indonesia’s stance is anything to go by, Adila said.

“Looking at the fact that the G20 is responsible for more than 70% of global emissions, Indonesia should realize that our responsibility to achieve the 1.5°C and net-zero emissions targets as a G20 member is huge,” she said. “So our target should be more ambitious because we know that energy contributes to emissions the most. With that big of a portion [of the G20], shouldn’t we take more responsibility? Our failure to take responsibility could jeopardize the 1.5°C and net-zero emissions targets.”

Yet by rejecting the G7 proposal during the G20 meeting in India, Indonesia failed to show climate leadership, according to Rere Jambore Christanto, an energy campaigner at the Indonesian Forum for the Environment (Walhi).

He said Indonesia tends to point the finger at other countries when it comes to climate action like phasing out coal.

“If others don’t do it, then we don’t want to do it,” Rere told Mongabay. If all countries were to act this way, he said, “then there’s not a single country which would be willing to phase out coal without looking at what other countries are doing.”

This attitude shouldn’t even be an issue, he added, given President Joko Widodo’s own unequivocal statements committing to phasing out coal and speeding up the development of renewables. At the online Leaders Summit on Climate Change that U.S. President Joe Biden hosted in 2021, Widodo said Indonesia was leading by example in addressing climate change.

And at an annual trade fair in Germany in April 2023, he reiterated Indonesia’s commitment to shut down all coal-fired power plants by 2050 and build more renewable energy.

“We walk the talk, not only talk the talk,” Widodo said.

This doesn’t square with the finance minister’s recent statement, or with the glacial pace of renewable energy development in Indonesia, Rere said. Over the last five years, Indonesia has added just 400-500 megawatts of renewable energy per year, which in 2022 accounted for 12.3% of the total energy mix — far short of the 23% target by 2025.

“So we’re waiting for investment and for other countries to change, before we want to change ourselves,” Rere said.

Funding feud

Yudo from the energy ministry said Indonesia disagreed with the proposal to triple renewable capacity because this can only be achieved with financing support from developed countries.

Low-income and developing countries have long been calling for wealthy nations to mobilize funding to help them reduce their emissions and adapt to climate change. Studies show that historically rich countries are the ones most responsible for climate change, as they’ve been burning fossil fuels to develop their economies for much longer than developing nations — and yet it’s the latter that face disproportionate challenges when addressing climate risks.

A study recently published in the journal Nature Sustainability found that all the 39 high-emitting countries of the Global North had already blown through the carbon budget — the amount of CO2 the world can release without overshooting the 1.5°C threshold — back in 1986.

As of 2019, the Global North countries, like the U.S., Canada, Europe, Australia, New Zealand, Japan and Israel, had already exceeded their 1.5°C carbon budget by more than 2.5 times.

On this count, these countries would owe a total of $192 trillion, or $6.2 trillion per year over 31 years, to the rest of the world to compensate for atmospheric appropriation. These figures don’t include payments that rich countries may owe for the costs associated with decarbonizing or adapting to climate change.

The U.S., the European Union and the U.K. alone owe around two-thirds of the total financial compensation from overshooting countries.

To help developing countries combat climate change, rich nations pledged to collectively mobilize $100 billion per year by 2020. The goal has been extended to 2025.

Yet even by this much lower accounting standard, these rich nations have still fallen short. In 2020, they provided only $83.3 billion, according to the Organisation for Economic Co-operation and Development (OECD).

Indonesia’s President Widodo is among the Global South leaders who have questioned the commitment of Global North countries to help with climate funding.

“I have to be honest, developing countries are doubtful of developed countries’ funding commitments, which until now have not met their $100 billion per year commitment,” he said at a G7 meeting on climate in Japan in May.

As such, it would be unrealistic for a country like Indonesia to adopt the target to triple renewable energy capacity proposed by the G7 countries, Yudo said.

“If you back us up with the $100 billion you promised, we would welcome the plan to accelerate [the energy transition],” he said. “But if you’re only talking about targets without adequate financial resources, it’s not that we don’t agree, it’s just less [feasible].”

The Indonesian government had previously said that to transition from fossil fuels to renewable energy and ensure affordable electricity prices, it would need at least $1 trillion until 2060.

But experts say this lack of funding from rich countries should not be an excuse for Indonesia not being more ambitious in its climate actions. Grita Anindarini, a program director at the Indonesian Center for Environmental Law (ICEL), said that if the government could commit funds for carbon capture and storage technology that’s still largely untested and unproven, then it doesn’t lack funds for boosting renewables.

Under its “Long-Term Strategy for Low Carbon and Climate Resilience 2050,” the government plans to retrofit three-quarters of all coal plants with carbon capture technology. The first such project, BP’s Vorwata development, is touted as being able to capture and store 25 million metric tons of CO2, at a cost of $3 billion.

And if similar technology is to be installed across all state-owned coal power plants, it would cost the country $700 billion.

“Instead of investing in CCS, why don’t we use the money to triple our renewable energy capacity?” Grita told Mongabay.

Adila of Greenpeace, meanwhile, pointed out that the Indonesian government is still allowing the construction of new coal-fired power plants, with a combined capacity of 13 gigawatts, that have already been tendered out. Crucially, a 2022 regulation issued by President Widodo greenlights the construction of what’s known as captive coal plants, which are built specifically to supply certain industries and not to feed into the grid.

“Sri Mulyani said that there’s no money to retire coal-fired power plants because it’s expensive. This begs a question. We know that coal retirement is expensive, so then why keep building new coal plants?” Adila said. “In order to build the new coal plants, we have to take loans. In order to retire them, we also have to take loans.”

More economists than climate experts

Adila said that while it’s true that developed nations have a moral obligation to provide climate funding to developing countries, Indonesia also needs to strengthen its climate policies and actions without waiting for help from the outside.

“How can we ask for money [from developed countries] when our policies are still very weak?” she said. “When Indonesia’s commitment to tackle climate change is still weak, and our policies contradict the energy transition path, we’re afraid we won’t be able to tap green funding at the global level. We might miss the opportunity.”

To strengthen climate policies, a sense of crisis needs to be instilled in political leaders and policymakers, according to Mahawan Karuniasa, a climate expert at the University of Indonesia.

In a 2020 interview with the BBC, President Widodo said his top priority was to boost economic growth, and that while issues such as the environment and human rights were important, he preferred to focus on one thing at a time.

“A sense of crisis hasn’t been integrated into the current political narratives,” Mahawan told Mongabay. “What’s needed to be done is building environmental perspective among the leaders so that they do not only think about politics and the economy.”

The same goes for the G20 forum, where climate concerns are largely crowded out by economic ones, he said. The Indonesian delegation to the G20, Mahawan said, had more economists than climate experts.

“That’s why there’s not enough sense of crisis,” he said.

Citation:

Fanning, A. L., & Hickel, J. (2023). Compensation for atmospheric appropriation. Nature Sustainability. doi:10.1038/s41893-023-01130-8

 

Banner image: Villagers playing volleyball in the Suralaya village with the Suralaya coal power plant in the background in Cilegon city, Banten Province, Indonesia. Image by Ulet Ifansasti / Greenpeace.

 

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