Ambitious Climate Commitment and Deliberative Policy Formulation are Keys for Indonesia to Achieve Carbon Neutral #Before2070

Jakarta, 9 April 2021.  The government through the Ministry of Environment and Forestry (KLHK) recently announced a Long-Term Strategy to achieve carbon neutrality and climate resilience. The strategy stated that Indonesia will become carbon neutral in 2070. As indicated on the strategy document, Indonesia’s emissions are targeted to reach a peak in 2030. In the formulation of a target, it is necessary to have clarity regarding policy support for each sector to reach peak emissions in 2030.

As a party to the Paris Agreement, the 2070 carbon neutral target is inappropriate and less ambitious.

Collaborating with the Yayasan Madani Berkelanjutan, ICLEI Indonesia, Walhi, and supported by the Thamrin School of Climate Change and Sustainability, IESR organized a public discussion webinar entitled “Indonesia Mampu Capai Netral Karbon sebelum 2070”. The webinar aims to be a means of public participation in responding and providing input to the government on public policies concerning the interests of everyone’s life.

In his remarks, Fabby Tumiwa, Executive Director of IESR, said that the recent increase in hydrometeorological disasters could be due to the climate crisis phenomena. This is in line with the IPCC’s Intergovernmental Panel on Climate Change report which states that an increase in Earth’s temperature by 1.1 degrees since pre-industrial times has increased the frequency and magnitude of extreme weather.

According to Fabby, the pressure from various parties, especially the government to increase its ambition in responding to the climate crisis is important.

“We want to encourage ambitious efforts that require not only a different way of thinking but also commitment and leadership from our political leaders, the president, who should be able to see that this climate crisis has an impact on the lives of many people,” said Fabby ending his remarks.

Farhan Helmy, Principal of the Thamrin School of Climate Change and Sustainability also agrees that Indonesia’s commitment to achieving carbon neutrality by 2070 is far too long. In his remarks, Farhan explained that there are at least four points that are often missed in climate discussions, i.e (1) the absence of coherence in the climate agenda and policies, (2) there is no serious effort to involve non-state actors, including cities that are spearheading the process changes, (3) the scale of action which is still at the pilot project level is not yet an institutional transformation supported by economic transformation, (4) a change of leaders without any fundamental rules on climate makes policy direction less clear.

“Indonesia cannot do this alone. The role of the state can no longer be just procedural to follow negotiations, “said Farhan.

One of the sectors that have come under the spotlight to achieve carbon neutrality is energy. It is important to understand the energy system and increase the ambition to reduce emissions in the energy sector because this sector is the largest emitter. Deon Arinaldo,  program manager of the Energy Transformation, IESR, explained that there are several steps that can be taken to decarbonize the energy system. 

“A more ambitious energy transition scenario can be achieved if, (1) there is no new coal-fired power plant (PLTU) construction starting from 2025, (2) The initiative of the Ministry of Energy and Mineral Resources to replace 13.5 GW of fossil plants with renewable energy is implemented, and (3) carries out the phase-out Steam Gas Power Plant (PLTGU) and Diesel Power Plant (PLTD),” he said.

Deon also added that technically and economically, Indonesia is able to carry out the steps above and decarbonize the energy system before 2050. What is needed is comprehensive political commitment and support.

Several years ago, Bappenas released a report on Low Carbon Development Indonesia; which shows that the Indonesian economy is increasing even though we use the Low Carbon Development concept in development. So the doubt and assumption that doing development with a low carbon concept is expensive, and will have an impact on stagnating economic growth have been actually answered by this report clearly.

Anggalia Putri, Knowledge Management Manager of Yayasan Madani Berkelanjutan, added that Indonesia has an interest in achieving the target of 1.5 degrees C rather than 2 degrees to avoid climate risks such as hydrometeorological disasters, for example, increasing floods. In the Indonesian context, many unique ecosystems will be destroyed if we cross the 1.5 degree limit.

“There is a significant difference in climate impacts between 1.5 and 2 degrees, so we stick to it to reach 1.5 degrees,” said Anggalia.

Furthermore, Anggalia added that with the existence of a net sink in the FOLU sector in 2030, Indonesia could actually reduce its deforestation quota.

Ari Mochamad, Country Manager of ICLEI Indonesia, emphasized the role of cities that are also crucial in reducing emissions and the journey towards carbon neutrality. “The city contains both problems and solutions. 70% of greenhouse gas emissions come from urban activities, but on the other hand, the city is a place that can be managed. Several leaders and non-government actors have made the issue of climate change a necessity because its impacts are already before the sight, “he concluded.

Several cities in Indonesia are members of the Global Covenant of Mayors (GCoM), a commitment from city leaders across the country who realize that climate change is a necessity so that it changes the mindset in decision making. 

Indonesia’s target to achieve carbon neutrality is an important issue regarding transgenerational justice between our generation and our children and grandchildren generation.

Yuyun Harmono, WALHI’s Climate Justice Campaign Manager emphasized that Indonesia’s target to become carbon neutral by 2070 is way too late.

“It is clear that it is too late if our target to be carbon neutral is in 2070, many country leaders and even the UN Secretary-General have stated that the current condition is a climate emergency, we must be ambitious in setting targets and taking action. We need something (policies) that are fast, both developed and developing countries.”

On the other hand, there are many loopholes to shrug off ambitious emission reduction obligations such as carbon trading offsets schemes to developing countries. This scheme will make developing countries have to bear a double burden in the future, namely the offset burden of developed countries and the emission reduction targets of their respective countries.

Regarding justice across generations, Yuyun emphasized that we should ask what we want to pass on the earth’s condition to our future children and grandchildren.

“Are we going to ensure they are safe from the ecological crisis and the climate crisis? Or are we leaving something that will make them unfortunate in the future? In climate justice, justice between generations is also an important context, so it must be considered. We want to demand more ambitious climate policies that reflect justice between generations and climate justice, “said Yuyun at the end of his presentation. 

Closing the webinar, Dian Afriyanie, committee member of the Thamrin School of Climate Change and Sustainability, highlighted two points as the key takeaways of the webinar. First, the importance of coherence between government policies in addressing the root of the problem; and policy coherence across sectors, locations and government hierarchies.

“The results of the IESR and Madani research show that the government’s target for emission reduction in the energy sector and FOLU can still be increased and accelerated, so the government should not only carry out procedural negotiations but also see and refer to the findings of this research,” said Dian.

Second, the deliberative process in policy formulation. Participation and representation of various groups is indeed a challenge in itself during this pandemic, however, in the formulation of public policies this process must be pursued, so that the policy products really belong to the public. 

Musrembang Paser: Transitioning towards green economy development

Jakarta, April 1, 2021, the Institute for Essential Services Reform (IESR)  presented on the Transition towards Green Economic Development in Paser Regency, East Kalimantan in Musrenbang (Musyawarah Rencana Pembangunan Daerah), and Public Consultation of the RPJMD (the regional mid-plan development) 2021-2026 Paser Regency (1/4). This opportunity was a follow-up to the IESR meeting with Bappeda East Kalimantan and Paser Regency in 2020.

In front of the Regent of Paser and his staffs, IESR encouraged the Paser government to no longer rely on coal in both the energy and economic sectors but began to diversify the economy to increase Paser’s economy such as industrial development, including the agricultural industry (rice, maize, shallots), the tourism industry, and the renewable energy industry.

Energy Transition is Happening, Coal Economic Contribution Will Fall

To date, Paser has depended on the Gross Regional Domestic Product (GRDP) on coal. It makes Paser vulnerable to economic turmoil due to decreasing demand for export coal. It is because many coal importing countries have adopted energy transitions. Particularly, since 80% of Paser’s coal production is exported so that Paser’s economic growth is strongly influenced by Reference Coal Prices (Harga Batubara Acuan, HBA).

“Coal export destination countries such as China, India, Korea, and Japan are very ambitious in making an energy transition. Furthermore, many countries to overcome the threat of the climate crisis are moving from fossil energy to renewable energy. It is estimated that in 2050 world coal demand will fall by 40-90%. Of course, this decline in demand will occur gradually soon. It warns the regions that have been the largest coal producer, such as East Kalimantan, “said Fabby Tumiwa, Executive Director of IESR.

This situation was also acknowledged by HM Aswin, Head of Bappeda East Kalimantan, “Although the structure of East Kalimantan’s GRDP is still dominated by the mining and quarrying sector, the declining coal price and low demand for coal from export destination countries still make the economic growth of the coal sector minus 4.58 in East Kalimantan.”

The contribution of the coal sector to the GRDP of Paser is very large, more than 70%, but the GRDP per capita of Paser Regency has been relatively stagnant in the last decade. This indicates that the mining industry has very limited leverage to support economic growth. For this reason, the government is required to develop a new economic sector.

“Coal production is relatively stagnant, but 95% of this production activity is carried out by one company only. So that in 2016 there was a decline in the production of the mining sector, especially coal, causing negative economic growth in Paser Regency 2016 (Diskominfo Paser, 2019), “added Fabby.

A similar opinion was conveyed by the Chairperson of the Paser Regency DPRD, Hendra Wahyudi, on the same occasion when he conveyed the main thoughts of the DPRD in the context of the preparation of the Paser Regency Work Plans 2022 and the Regional Medium Term Development Plan Public Consultation of 2021-2026. He emphasized that the economic contraction during COVID-19 was significantly impacted Paser, with economic growth of minus 2.77 in 2020.

“We suggest taking strategic steps by maximizing the non-mining economic sector such as the agricultural, processing, and trade industries so that they do not depend too much on the mining and quarrying industry,” he said.

The IESR analysis shows that the agriculture, fisheries, and hunting sectors absorb more labour than mining, which only ranks fourth. Moreover, the agricultural industries have experienced less significant economic fluctuations when compared to the mining sector.

Paser’s Agricultural Industry Included in the Focus of Green Development

The direction of the East Kalimantan Bappeda (Agency for Regional Development) as placing Paser as the center of agriculture and food for the New Capital City of Indonesia (IKN), especially for rice, onion, and chilli commodities, will encourage Paser to improve infrastructure that supports the agricultural industry and protects Sustainable Food Agricultural Land (LP2B).

Increasing the productivity of rice fields can also increase employment in the agricultural sector. The calculation of the increase in land productivity to 7 tons/ha and assuming a fixed amount of land, then Paser Regency can absorb around 9,479 workers. This figure is equivalent to the number of workers in the mining sector. It means that it can absorb the workforce affected by the decline in mining activities.

Furthermore, through the IESR calculations, Paser also has enormous renewable energy potential, with the successively technical production of Rooftop Solar of nearly 81000 GWh/year, water energy of 721 GWh/year, and pumped hydro storage (PHS), 3,5 thousand GWh/year. The development of the electricity sector based on renewable energy will be able to supply electricity for IKN and other areas around Paser.

IESR also revealed that maximizing the potential of the tourism sector in Paser will encourage economic growth. The Paser government could increase the tourism sector budget to attract more tourists. By taking into account infrastructure development and road access will be essential to support the development of the tourism sector.

“Paser Regency has Corporate Social Responsibility (CSR) funds of 58 billion in 2020. This fund can be used for the development of MSMEs and human resources more optimally,” said Fabby.

He suggested that the process of economic transformation requires careful planning. The Paser government must plan a more comprehensive study; the impact of the energy transition on the coal industry, local economy, environment, and health so that Paser can make a road map for Paser’s economic transformation. Another thing that needs to be prepared and deepened is the diversification of the economy, its supporting considerations, and policies.

Regent Paser in his speech also said that his party would prioritize the agricultural sector.

“I hope the agriculture department can compile a work plan to improve the agricultural program in Paser. We have large tracts of land in 139 villages. Activating this land with modern agricultural technology will open up job opportunities for youth. Agriculture will be our focus, ”promised the Regent of Paser, Fahmi Fadli.