Indonesia is urged to show leadership, take firm climate action and ambition, including increasing its emission cuts.
Indonesia is hosting and presiding the G20 summit this year, the first developing economy to do so. It set three priority issues under the theme “Recover Together, Recover Stronger,” — global health infrastructure, digital transformation, and energy transition
Energy transition, in particular, is extremely important as the world is currently dealing with the consequences of the climate crisis. The energy sector, relying primarily on fossil fuel, is the largest contributor to greenhouse gas emissions, accounting for 35 percent of global emissions. Combustion of coal, which emits strong gasses such as carbon dioxide, to the atmosphere, is the main culprit.
The year-long forum, featuring meetings, events, and discussions, takes place in Indonesian cities, and is attended by thousands of delegates from participating countries. The high-level summit, gathering the group’s heads of state, will take place in Bali in November.
Why is the G20 important?
The G20 forum gathers the world’s 20 largest economies – 19 countries, developed and developing, and the European Union. Their economies account for roughly 80 percent of global economic output, nearly 75 percent of global exports, and roughly 60 percent of global population.
Teuku Faizasyah, Director General of Information and Public Diplomacy at the Ministry of Foreign Affairs, stated that Indonesia’s G20 presidency is expected to bring benefit for developing countries in the midst of the Covid-19 pandemic.
“This is where we actually see Indonesia’s role as being very important, we want the Indonesian presidency to have an impact on other countries, particularly developing countries,” said Faizasyah.
Meanwhile Coordinating Minister for the Economy Arlangga Hartarto, , said that Indonesia has the opportunity to demonstrate leadership in responding to various international challenges and in bridging the interests of developing and developed countries.
“The G20 must be able to bridge the gap between developing and developed countries’ interests. Of course, the main priority for the Indonesian government is an inclusive, resilient, and sustainable economic recovery,” said Airlangga.
G20 member countries are also responsible for 75 percent of global greenhouse gas emissions.
A 2021 report by Climate Transparency said the G20 has important in limiting temperature rise to 1.5°C by committing to emission reduction targets and implementing policies consistent with the 2015 Paris Agreement that requires the world to cap the global rise in temperature to 1.5 degree Celcius.
To accomplish this and avoid catastrophic climate impacts, scientists from the Intergovernmental Panel on Climate Change (IPCC) believed the world must cut down emissions by 45 percent by 2030 and achieve net zero by 2050.
The Paris Agreement’s climate commitments required member countries to submit Nationally Determined Contributions (NDCs).
Unfortunately, Climate Transparency, a global partnership driving climate action in G20 countries said in April 2021, that the combined mitigation impacts of NDCs were insufficient and would result in 2.4°C warming by the end of the century.
The findings also highlighted the critical importance of G20 members to strengthen their climate policy and action. In essence, an ambitious 2030 target that was consistent with the net zero target by 2050 was required.
So far 133 countries, including the European Union have submitted their NDC documents to the United Nations Framework Convention on Climate Change (UNFCCC) and according to the Climate Action Tracker (CAT) analysis, 23 of them have stronger targets, including the 27 European Union members.
Meanwhile, 12 countries including Indonesia, did not raise their ambitions. Indonesia has announced a 29 percent reduction in greenhouse gas emissions through its own efforts and 41 percent with international financial support.
While not changing its ambitions in the NDC, the Indonesian Ministry of Environment and Forestry (KLHK) has targeted a 59.76 percent reduction in emissions by 2030.
The target is detailed in the ministry’s document of long term strategy low carbon and climate resilience (LTS-LCCR), one of which is the net sink from forest and land use sector.
Sustainable forest management, including the implementation of multiple forestry businesses and low-impact logging, is one of the mitigation actions in this sector.
It is important to note that the climate action tracker is updated periodically and has yet to include the latest policies from assessed countries. Indonesia, for example, submitted its new climate targets, called Enhanced NDC, for 2030 to the UNFCCC Secretariat in September.
The document states an increase in emission reduction from 29% to 31.89% unconditionally or from 41% to 43.2% with international financial support.
“This Enhanced NDC is the transition towards Indonesia’s Second NDC which will be aligned with the Long-Term Low Carbon and Climate Resilience Strategy (LTS-LCCR) 2050 with a vision to achieve net-zero emission by 2060 or sooner,” stated the document.
Adila Isfandiari, a climate and energy campaigner at Greenpeace Indonesia, says the new targets are an improved version of the old ones. However, the climate targets are neither ambitious nor in line with the Paris Agreement 1.5C pathway. aq
“According to the Climate Action Tracker in 2021, Indonesia must push for 66% unconditional emission cuts in 2030 to meet the Paris Agreement target. So this is where the government must reconsider its position,” said Isfandiari.
What about Indonesia?
Climate change impacts are becomig more evident in Indonesia. Hydrometeorological disasters such as floods, extreme rainfall, landslides, and forest fires have become more common in the last five years, and have increased in the last two years.
The National Disaster Management Agency (BNPB) data shows that the number of disasters for the 1 January – September 2022 period stood at 2,372 occurrences, 99 percent of which were hydrometeorological disasters. The figure for 2021 was 3,058.
The losses were enormous. Climate-related economic losses in Indonesia are expected to total Rp 112.2 trillion, according to finance minister Sri Mulyani Indrawati. “That number (Rp 112.2 trillion) is 0.5 percent from the 2023 GDP,” Indrawati said.
Meanwhile, the Ministry of National Development Planning/Bappenas estimated that climate change will cost Indonesia IDR 544 trillion by 2024, with coastal and marine, agriculture, health and water as four most affected sectors.
These impacts coupled with the fact that Indonesia is one of the top ten emitters in the world, would mean a more ambitious target is required to address the climate crisis.
The Carbon Brief analysis published in October 2021, revealed Indonesia as the world’s fourth largest emitter since 1850, contributing 4.1 percent to global emission.
According to the Central Statistics Agency (BPS), Indonesia’s carbon emissions in 2001 totaled 932 thousand tons of carbon dioxide (CO2e). In 2017, this figure increased to 1.15 million tons. The energy and forestry sectors, as well as other land use (FOLU), contributed the most.
The Ministry of Energy and Mineral Resources (ESDM) also stated that Indonesia emitted 1,262 gigatonnes of carbon dioxide in 2021. From this total, coal power plants account for 35 percent.
As part of its commitment to reduce emissions in the energy sector, the government set a target of a 23 percent renewable energy mix by 2025.
The Ministry of Energy and Mineral Resources claimed that it has already achieved 11.5 percent of the renewable energy mix, with another 11.5 percent expected in the next three years.
According to the Climate Action Tracker in 2021, Indonesia must push for 66% unconditional emission cuts in 2030 to meet the Paris Agreement target. So this is where the government must reconsider its position.
Adila Isfandiari, energy and climate campaigner, Greenpeace Indonesia
The State Electricity Company (PLN) has also developed a series of steps, starting with the development of new renewable energy plants, with a target of 20.9 GW of additional capacity and a 24.8 percent renewable energy mix by 2030.
PLN also claimed that it will begin retiring 1 GW of subcritical coal-fired power plants (PLTU) in 2030 and another 19 GW of sub/supercritical removal by 2040. The last step is closing down 23 GW ultra super critical plants in 2056.
However, Tata Mustafa, Greenpeace Southeast Asia head of climate and energy campaign, said these efforts remained insufficient because the government is still planning to build a 13.8 GW coal-fired power plant.
“So, the biggest challenge (for energy transition) is figuring out how to make it happen,” Mustafa said.
Will the G20 have an impact on domestic energy policy?
At the 2021 Rome Summit, President Joko Widodo stated, “Indonesia wants the G20 to lead the world in sustainable cooperation on climate change and environmental management. This must be backed up by concrete action.”
The government has also announced plans to achieve net zero. Beginning with the Ministry of Environment and Forestry, Bappenas, and others.
Ministers and officials have also spoken about shifting to green energy, including Sri Mulyani Indrawati, who said the government will phase out fossil fuels, but will requore financial assistance to do so.
According to Indrawati, the cost of addressing climate change in Indonesia will reach US$ 247.2 billion, or Rp. 3,461 trillion, up until 2030. In other words, Indonesia requires Rp. 266.2 trillion in resources each year.
However, the current budget allocation is only 4.1 percent of the state budget, or around Rp. 86.7 trillion.
Elrika Hamdi, energy finance analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said one of the main issues that Indonesia brought to the G20 this time was the energy transition, which she said is aligned with Indonesia’s interests, as the departure from coal to clean and renewable energy would require large investments.
The discourse on the energy transition is still evolving, and the world is gradually shifting to cleaner alternatives, Hamdi said, and that she added, forces Indonesia — a country rich in natural resources yet still reliant on extraction of fossil fuel — to keep up with the world’s current shift towards renewables that are becoming increasingly more affordable.
“Indonesia recognizes that as the world begins to shift, the availability of capital for the extractive sector will begin to decline,” said Hamdi, describing this as a “sustainability risk.”
“There are lofty goals for the energy transition, but on the one hand, Indonesia is also riding the wave. Because the global trend is heading that direction, the government has no choice but to follow it if it wants to grow and attract capital,” Hamdi explained.
Fabby Tumiwa, the Executive Director of the Institute for Essential Services Reform (IESR), said Indonesia could benefit from the G20 presidency as it could accelerate the country’s energy transition.
Tumiwa, who also co-chairs the Civil 20 (C20) said, the working group on the energy transition will discuss access and increasing access, cooperation in supporting technology, and sustainable financing. “I think those three are relevant in the Indonesian context,” Tumiwa.
The C20 – the G20 engagement group that provides a platform to civil society organisations (CSO) around the world to voice the people’s aspirations to G20 leaders — will also advocate priority issues including the early retirement of coal power plants, a critical commitment to support the goal of keeping rising temperatures at 1.5 degrees Celcius.
To meet the country’s electricity needs after this retirement, the government must accelerate the use of renewable energy. With that in mind, Tumiwa notes that energy must be both affordable and sustainable.
Another issue is coal financing “We encourage G20 countries to make plans to phase out funding for fossil energy in the future. This is especially important now that the G20 countries, including Indonesia, are compiling a green financing taxonomy,” Tumiwa said.
He said there must be a firm agreement that banks no longer finance the development of fossil-fueled infrastructure that has direct and indirect impact on increasing greenhouse gas emissions.
But Greenpeace’s Mustafa remained pessimistic about the impact of the Indonesian presidency on domestic policies and that of other member countries. She believes there is still a significant gap between statements of state leaders and the realization of the energy transition, including in Indonesia.
“Having to deal with challenges and remains slow in its energy transition, Indonesia’s presidency might not have enough bargaining chips to push for energy transition within the G20,” Mustafa said.
Current state of energy transition within G20
Through the Paris Agreement adopted in 2015, countries agreed to keep the earth’s temperature at 1.5 degrees Celsius in order to avoid a climate disaster. To achieve this, an energy transition is required.
This meant that the economic system, particularly the energy sector, must change. Decarbonization, or the phasing-out of coal, must begin immediately.
According to the International Renewable Energy Agency (IRENA), albeit critical to energy sovereignty and economic recovery, current global energy transition remains slow and inadequate. “The energy transition is far from being on track and anything short of radical action in the coming years will diminish, even eliminate chances to meet our climate goals,” Francesco La Camera, the Director-General of IRENA, said in a statement.
In the same statement, La Camera added that putting policies in place that comply with the Paris Agreement and the Susutainable Development Agenda is a political choice and investing in new fossil fuel infrastructure will only lock in uneconomic practices, perpetuate existing risks, and increase climate change threats.
Renewable energy currently accounts for only 14 percent of all sectors globally. IRENA wants the figure to be increased to 40 percent by 2030.
Electrification and energy efficiency are key, driven by clean renewable energy, hydrogen, and sustainable biomass. Annual global renewable energy additions must also be tripled to meet IPCC recommendations.
In order to phase out fossil fuel, coal power plants must be replaced, and infrastructure must be updated.
G20 countries, as the largest energy users and carbon dioxide emitters, are expected to support 65 percent of global electricity generation by 2030.
Irena also urged G20 countries to raise their NDC ambitions and national energy plans in the Glasgow Climate Pact to provide certainty and guide investment strategies in line with a temperature rise of 1.5 degrees Celsius above pre-industrial levels.
In 2021, G20 governments promised to meet climate targets. However, according to a recent Bloomberg NEF (BNEF) study, no country has implemented adequate policies to achieve decarbonization to date.
The study also found that G20 countries are still investing $600 billion per year in fossil fuel. Several countries have committed to reduce funding in fossil fuel, but no sufficient action followed.
G20 climate action so far
In its report published February this year, the IPCC emphasized the critical role of G20 countries in reducing global emissions.
UN Secretary-General Antonio Guterres said that countries, particularly G20 members, which together account for 80 percent of global emissions, should “review and strengthen their 2030 emission reduction targets this year.”
If the world is to avoid the catastrophic effects of climate change, it must adhere to the Paris Agreement targets. But so far, the G20 has failed to provide meaningful solutions to climate change.
An analysis on the G20 fiscal stimulus package for the recovery of the Covid-19 pandemic revealed that only six percent of the total USD 14 trillion was earmarked for “green” policies or spending, very low compared to the total amount disbursed.
Another example is when world leaders agreed for the first time on the need for urgent and effective actions to limit global warming in the 2021 G20 Rome Summit.
Activists, however, were disappointed with the declaration’s lack of concrete solutions or meaningful commitments.
To meet the 1.5°C target, the UN urged governments worldwide to achieve net zero emissions by 2050. But no commitments were made at the Rome meeting on how countries would achieve the net zero target by mid-century.
Failure to keep the temperature from rising above 1.5 degree Celcius may lead to devastating impacts such as affecting the survival of low-lying countries, global economic livelihoods, and the stability of the global financial system.
The energy transition is far from being on track and anything short of radical action in the coming years will diminish, even eliminate chances to meet our climate goals.
Francesco La Camera, the Director-General of IRENA
Furthermore, climate finance from developed countries for developing economies, at $100 billion per year, has not been achieved. Last year’s COP26 in Glasgow found that 2020 funding targets had been missed because the majority of rich countries failed to meet this promise.
Yet the conference also gave birth to a new climate agreement known as the Glasgow Climate Pact, consisting of measures such as efforts to strengthen climate resilience, reductions in greenhouse gas emissions, and climate finance.
Many countries include long-term net-zero emission targets in their NDCs. At least 40 countries have pledged to phase out the use of coal as well as bold declarations on deforestation and methane emissions.
However, these promises were not legally binding, so it is challenging to ensure their implementation.
The participation of G20 is critical because it is both an economic powerhouse and the largest emitter. G20 nations must have common standards and actions.
In all aspects, it is critical that the G20 take a unanimous decision to support the commitments made in Glasgow to combat climate change.
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President Jokowi stated at the COP26 summit that Indonesia has contributed in the combat against climate change. He claimed that deforestation had reached a 20-year low and that forest fires had decreased by 82% by 2020 and mangrove rehabilitation is being carried out on 600,000 hectares until 2024.
In the energy sector, Jokowi stated that Indonesia will continue to promote clean and sustainable energy, by developing electric vehicles and rooftop solar power plants.
He also announced the adoption of a presidential regulation on the economic value of carbon, which will include carbon trading and taxes.
Greenpeace Indonesia researcher Iqbal Damanik is not convinced. He believed that carbon trading will not be a climate solution that reduces greenhouse gas emissions.
“Carbon trading, which is said to be transparent, is a mere green gimmick because the market mechanism allows carbon-producing corporations to continue to do so,” Iqbal said.
Meanwhile, the C20 working group on climate justice and energy transition regretted the inability of the G20 environment and climate ministerial meeting in August to agree on a joint communique on the climate crisis.
“G20 countries should be able to agree on more ambitious commitments to stop the destruction of natural ecosystems, both land and coastal, and to accelerate the recovery of damaged ecosystems in order to prevent the earth’s temperature rising above 1.5 degrees Celsius,” said Anggalia Putri from the C20 working group.
“Maintaining natural ecosystems, particularly remaining natural forests is a cost-effective climate crisis mitigation effort from the agriculture, forestry, and other land use sectors,” she added.
World leaders, including those from the G20, will attend the COP27 climate conference in Sharm El-Sheikh, Egypt, in November to resume negotiations, and assess their climate actions. With time running out, this is an excellent opportunity to take more serious action.
As the largest contributor to the emissions that caused global warming, the G20 must take decisive actions. Indonesia, as host of 2022 G20, should seize this opportunity to lead the world in its action to save the planet.
Reporting for this article is supported by Internews’ Earth Journalism Network and was first published in Bahasa Indonesia by Betahita on 21 September 2022.