Indonesia Delays $20 Billion Climate Plan - OilPrice.com
Indonesia Delays $20 Billion Climate Plan | OilPrice.com
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Due to disagreements over policy, the cost of funding, and legal hurdles, Indonesia, the largest economy in Southeast Asia, is delaying the start of a $20 billion climate investment plan as part of a deal signed with the United States and other wealthy nations last year.
The investment plan, in its draft, is not expected to be launched until later this year, because it would need unspecified “additional data” to be included, Indonesia said on Wednesday, as carried by Bloomberg.
At the end of last year, Indonesia, the world’s top coal exporter and heavily reliant on coal for power generation, signed an agreement to launch a Just Energy Transition Partnership (JETP) co-led by the U.S. and Japan and including Canada, Denmark, the European Union, France, Germany, Italy, Norway, and the United Kingdom.
To achieve total power sector emissions peaking by 2030, the long-term partnership said it intends to mobilize an initial $20 billion in public and private financing over a three-to-five-year period, using a mix of grants, concessional loans, market-rate loans, guarantees, and private investments.
These investments are expected to help Indonesia achieve the other main targets of the JETP. These targets are: capping power sector emissions at 290 megatons of CO2 in 2030, down from the baseline value of 357 MT CO2; establishing a goal to reach net-zero emissions in the power sector by 2050, thus bringing forward Indonesia’s net-zero power sector emissions target by ten years, and accelerating the deployment of renewable energy.
Under the partnership, Indonesia will target to have renewable energy generation accounting for at least 34% of all power generation by 2030, which would roughly double the total renewables deployment over the course of this decade compared to current plans.
Indonesia needs billions of U.S. dollars in investment to shift away from coal the country doesn’t have. The wealthy international partners in the JETP have pledged half of the $20 billion investment while the other half is expected to come from large banks under the Glasgow Financial Alliance for Net Zero.
By Tsvetana Paraskova for Oilprice.com
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”