Coal vs Climate: Indonesia's Energy Policy Contradicts Its Climate Goals

Abstract

Being the fourth-largest country in the world and hosting the third-largest share of global rainforest stocks, Indonesia plays an essential role in international climate protection. While the government has implemented forest and peatland protection measures, national energy planning heavily relies on fossil fuels, and is in clear conflict with the country's climate goals. Indonesia is one of the largest coal producers and exporters worldwide. The current expansion of coal combustion for domestic electricity supply is likely to lead to long-term dependency thereon in upcoming decades. Indonesia's rush for coal, commencing early in the new century, is a result of the country's decentralisation reforms and the persistency of structures of corruption and politico-business entanglements. The 2015 plans for extensive expansion of the coal fleet brings together the government's infrastructure plans and the interests of the domestic coal industry, which lost part of its market due to a drop in international demand. The government's energy planning contradicts its goals to reduce greenhouse gas emissions and expand the share of renewable energies. A more sustainable long-term strategy is still missing, and no serious plans for an energy transition exist so far. Especially Indonesia's continued reliance on coal, further to the tremendous environmental and social impacts open-strip mining and the construction of new power plants bring about, have led to intensifying criticism both internationally and domestically. This pressure has led to some minor policy corrections, but without changing the general energy pathway of the country. European policymakers should actively support initiatives working towards a more just and environmentally sustainable energy system. Once Germany is convincingly implementing measures to decarbonise its own energy system, meet its climate goals, and thoroughly implement its coal phase-out, it could figure as a best practice example for emerging economies like Indonesia. Until then, European banks and enterprises should divest from any coal-related business and shift towards supporting the development of renewable energies.