Indonesia can be a green model for the world

As Indonesia hosts the G20 Summit in Bali, Arsjad Rasjid argues that Southeast Asia’s most populous country can be a ‘beacon of hope to the world’ by showing that there is no contradiction between development and transitioning to clean energy.

Nusantara_Indonesia_Urban Plus_design render
A design illustration of the new capital city in Indonesia. Image: Urban +

It is now widely understood that those who have contributed least to climate change suffer the most from its impact. While the world’s most developed countries are responsible for the vast majority of emissions, it is the developing world that pays the price in the form of the most severe heat waves, floods, and droughts.

Now, as the developing world races forward in its own development, it faces the awful dilemma of knowing that if it follows the same path taken by the developed world, it could worsen the problem immeasurably.

This is the dilemma keenly faced by Indonesia, a country of around 274 million people who are working tirelessly to develop their country and build a better future. The growth and progress we see every day in our nation’s economic activities is truly breath-taking. Indeed, we want to accelerate this growth – drastically increasing energy production and both value and job creation – but without destroying the planet in the process.

Keenly aware of our own susceptibility to climate-related hydro-meteorological disasters, we have a duty to be at the forefront of the global energy transition to sustainable energy.

As a nation, we have set ourselves the ambitious goal of reducing our greenhouse gas emissions by 41 per cent with international assistance by 2030 (or by 29 per cent independently), and of achieving net zero carbon emissions by 2060. This immense, but not insurmountable, mission must be carried out while still addressing the needs of a large and growing population. We must build, grow and transition, so the country can continue to develop and thrive.

The advantages of net zero are clear. By committing itself to this path, Indonesia can become a beacon of hope to the world, by showing that there is no contradiction between development and transitioning to renewable energy.

The answer to the conundrum lies in technological change and increased productivity. The Porter Hypothesis, coined by Harvard economist Michael Porter, states that strict environmental regulations can induce efficiency and encourage innovations that help improve commercial competitiveness.

Electric vehicles need to be introduced; while solar, hydro, geothermal and wind energy must begin to replace fossil fuels. This is no longer a pipe dream: electric cars and e-bikes are increasingly affordable, reducing air pollution, congestion, and oil dependency.

Solar projects in Indonesia currently cost more than double than in other developing countries, but through competitive tariffs and predictable project pipelines, we can bring costs down. At the same time, an International Energy Agency roadmap has shown how the reduction in household energy bills involved in meeting our ambitious goals would significantly lower oil import costs, meaning the transition would essentially pay for itself.

Protecting the local environment is no less important. Healthy soil and ecosystems are vital for food production and access to clean water, which should be a basic human right.

The current global food crisis highlights the importance of improving food production in ways that provide higher incomes for farmers and lower food prices. For example, the ‘Building with Nature’ approach, which provides planners and developers with evidence-based guidance on delivering high quality green infrastructure, has been used to regenerate mangroves along 20 kilometers of Indonesian coastline while simultaneously revitalising aquaculture. This approach is spreading to the rest of the country, reflecting the understanding that nature-smart policies are good for both the environment and the economy.

These efforts are embodied in the country’s plans to build a new green and smart capital, Nusantara, in East Kalimantan. While there is of course much debate around a project of this magnitude, importantly, sustainable development will be the watchword of this new city. It will be fuelled by renewable energy and filled with green spaces, including wildlife corridors. This will be in sharp contrast to the current capital Jakarta, which is polluted, and literally sinking under the weight of unregulated groundwater extraction.

Reforestation, carefully and collaboratively managed, will be central to these efforts. A government report recommends restoring tropical rainforest ecosystems as one of the five pillars of environmental recovery and improvement. Preserving Indonesia’s forests protects endangered species, mitigates flood risks, and helps fight climate change.

Wherever one stands on the Nusantara debate, the spirit that is driving the plans of the new capital needs to be extended throughout the country, viewing every new development through ‘green-tinted’ glasses. The IEA Roadmap shows that net zero emissions and economic development go hand in hand: both require innovation, knowledge, technology, and economic diversification. In this regard, the advantages of net zero are clear. By committing itself to this path, Indonesia can become a beacon of hope to the world, by showing that there is no contradiction between development and transitioning to renewable energy; in fact, the opposite is true. Indonesia’s development is dependent on this transition.

Arsjad Rasjid is chairman of the Indonesian Chamber of Commerce (KADIN), and the host of the B20 business summit, part of the G20 this week. He is also president director of PT Indika Energy, an energy company that is sponsoring the B20.

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