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Indonesia is also important because it has the richest terrestrial biodiversity in the world. Mainly because of its extremely diverse tropical rainforests, Indonesia is one of the world's biodiversity giants. Forested lands store large amounts of carbon both above and below ground, and in countries with monsoon climates forests play an important role in maintaining natural hydrology and preventing catastrophic flooding.
The interaction between people and Indonesia's natural environment is intimate, and for indigenous people, their cultural identity and livelihood are tied to the land. Indonesia's forest areas occupy 64% of the surface area and are of great social, economic and ecological importance. The number of people living in or around forests is 8.6 million, of which 35% depend on forest resources for their livelihood and 18.5% depend on forest resources as their main source of income.
The palm oil problem (1)
Implementing changes is difficult because Indonesia's environmental status is generally considered poor; The country is seen by NGOs as one of the largest exploiters of natural resources in the world. Indonesia is the world's largest producer of palm oil, producing 46 million tonnes of crude palm oil in 2021; These products represent 58% of palm oil production and 59% of global exports. The industry is responsible for a third of the loss of old-growth forest over the past 20 years, while devastating wildfires are caused by fires and the clearing of rainforest to make way for plantations. Between 2000 and 2012, six million hectares of primary forest (equivalent to 3% of the country's land area) were lost, of which approximately 40% were in protected areas. Over 200,000 hectares of rainforest will be cut down by 2022. Over the past three decades, 40% of Indonesia's mangroves have deteriorated or been lost.
Mining, particularly that of coal and nickel, also represents one of the negative impacts on the environment. More than half of tropical deforestation caused directly by industrial mining occurs in Indonesia, and this industry is closely related to pollution of coastal rivers and seas. Meanwhile, hydropower, often touted as a more environmentally friendly energy source, led to the construction of China's £1.5 billion Batang Toru Forest Dam in Sumatra, which displaced native populations and of an endangered subspecies of orangutan.
Coal write-off financing in stages
To help Indonesia translate the Bali Declaration into meaningful change, the World Bank announced the Equitable Energy Transition Partnership (JETP), involving wealthy nations such as the UK, US, Japan and Germany, with commitments for 10 billion dollars promised three years ago. with international banks. HSBC and Bank of America match this figure.
This financing will help Indonesia transition away from coal-fired power plants, but this is a difficult task as Indonesian coal production continues to increase, not decrease. In the 2019 decade, annual coal production more than doubled to 616 million tons, now surpassing that of the United States and Australia. Nearly all of the nation's energy needs are met by fossil fuels, 60% of which come from coal-fired power plants that produce high pollution. The country is responsible for 2.7% of all fossil fuel emissions and is the ninth largest emitter of carbon dioxide.
Political pressure from all sides is intense as Indonesia has relied on resource exploitation to drive its economic transformation in recent decades. The poverty rate dropped from 60% in 1970 to 24% in 1999 and 9.78% in 2020. Oil palm contributes 4.5% to the GDP. Mining not only drives the economy, but is also important for the extraction of essential minerals used in construction, renewable energy, lithium-ion batteries and stainless steel. Climate change could reverse this progress. Some argue that this could also lead to the loss of fossil fuels too quickly.
Read the fine print
The devil with JETP is in the details. According to the International Energy Agency, Indonesia needs to increase annual spending on renewable energy from $2 billion in 2020 to $38 billion in 2026. This financing will help expand solar, wind, hydropower and geothermal. The entire transition period, from closing coal-fired power plants to compensating and retraining laid-off workers, is expected to cost between $150 billion and $200 billion annually from 2024 to 2030.
“The announced funding amount itself is not significant. this represents only a fraction of the need,” said Tiza Mafira, director of the Indonesia Climate Policy Initiative. “I didn't see a credible, financially feasible way to do the JTEP. So far, no coal-fired power plants have agreed to close. If we increase it, the problem will become big. The symbolism of JETP has a positive element, he said. “The important thing is to mobilize political will and debate. generates a lot of action.” Without JETP, the early cessation of coal production would not have been possible.
Jerry Asmoro, a member of the Indonesian campaign of the renewable energy community 350.org, also expressed a cautious observation. “I hope that the JETP program can be truly optimized to initiate a massive, sustainable and just energy transition in Indonesia,” he said. This is necessary, he added, because “Indonesia's emissions are expected to increase in the future as domestic energy demand increases. The energy transition will be an important basis for avoiding global emissions."
When a coal-fired power plant is no longer a coal-fired power plant
Greenpeace Indonesia doubts that JETP will make much of a difference. The main concern is that the planned coal-fired power plant requires the plant to co-burn palm biomass or wood pellets, waste pellets, sawdust, palm husks, bran and rice husk, all mixed with coal. By the end of this year it will be possible to operate up to 52 coal-fired power plants in this way. The percentage of biomass will increase over time, but is generally between 1 and 5%; The remaining 95% is coal.
According to Greenpeace Indonesia, the biomass supply chain will increase Indonesia's greenhouse gas emissions by 26.48 million tonnes of CO2 equivalent per year. “This will make land use even more problematic. Where do you think the wood chips came from? asked Iqbal Damanik of Greenpeace Indonesia. “They plan to provide one million hectares of forest for the so-called 'forest energy transition'. The story regarding the ratio of biomass to coal in the mix ignores the fact that demand for coal in the co-firing program is still high.
Furthermore, a closer examination by Mongabay.com of the details of the JETP reveals that it actually provides certainty and protection for plans to develop new coal-fired power plants, thus enabling construction by 2030. The capacity is almost 14 gigawatts. To date, electricity can still be produced by coal-fired power plants.
“Our charcoal production continues to increase and the co-firing project cannot be fully implemented due to the lack of ready-to-burn biomass,” said Agung Adi Setyawan of the Village Department and advocacy group Forest Watch Indonesia. . “Why are these funds not used to build power plants that are truly renewable and in accordance with Indonesia's geography, such as solar, wind and hydropower? It is important for us to switch to energy that is more environmentally friendly and in line with our conditions.
The palm oil issue (2)
The government's attitude towards oil palm plantations also shows that change will be slow. The 2020 law extended the grace period given to companies to stop deforestation to three years and replaced criminal penalties with administrative fines. As of the end of 2019, 3.12 million hectares of oil palm were planted in Indonesia's protected forest areas; Oil palm concessions currently cover one million hectares of exploitable primary tropical forest. “There are still illegal oil palm plantations throughout the republic,” Damanik said. “You can simply stop or abandon the last cultivation and then return to nature. Instead, they allowed the company to pay the fine and continue doing business as usual. No real action.
These developments, or lack thereof, have led some to conclude that the Indonesian government does not take climate change seriously and does not “get” it. “The message from central government is that it is committed to overcoming the climate emergency, but not to sacrificing economic development,” Mafira said. “This is the wrong way.” If the government really understands this, then it says there will be no economic development without a green transition. Mafira admitted that other voices also have power. “The interests of the coal industry and forestry are very strong.”
This sentiment also frustrated Asmore, who described the company as still "dominated by commercial and economic calculations" and unable to meet society's long-term needs. Asmoro noted that companies often operate in industries that are both stable and volatile. “In managing the energy system in Indonesia, conflicts of interest between officials and companies still occur frequently,” he said. “Are they businessmen or politicians?”
Uncertainty over whether some operators will join the Roundtable on Responsible Palm Oil (RSPO) has also frustrated Greenpeace Indonesia, which has identified nearly 100 RSPO companies, each owning more than 100 hectares of forest land; Eight of them have an area of over 10,000 hectares each.
The creation of a new capital, which will replace Jakarta as the city built on Kalimantan, will likely provide much insight into the government's real priorities. The reason is that this decision will help fight climate change. The new city will be more resilient to sea level rise, distribute wealth and create a more environmentally friendly energy distribution center. Damanik thinks differently. “There are a lot more natural resources to exploit,” he said, “and there are a lot more people involved politically.” There will be an environmental impact. Built on the coast where there are many mangrove forests. This will affect and displace indigenous populations. In reality they just moved the problem from Jakarta to Kalimantan.
However, with political will, transitional challenges can be overcome, Mafira believes. “If these issues are addressed step by step, coal-fired power plant by coal-fired power plant, this will be manageable in the long term and will give time and space for renewables to enter the market and compensate workers.”
Advantages of renewable energy
Replacing coal with renewable energy will create many new jobs in Indonesia, six to one in the number of jobs lost due to the closure of the coal sector, according to data modeling firm Transition Zero. Indonesia is second only to the United States in terms of installed geothermal power generation capacity, and the total renewable energy potential, including hydroelectric, geothermal, solar, wind and ocean power, is 409 gigawatts. However, according to the International Renewable Energy Agency, only 12% of Indonesia's energy potential has been utilized.
According to Mafira, solar and water offer important opportunities, while water and geothermal are the best options for grassroots renewable energy. “The cost of renewable energy is much more competitive today,” he said, “but investing in solar is a disaster because the market attractiveness for renewable energy is low.” This regulatory regime benefits the existing coal industry.
However, the ambiguous words once again caused a stir. Indonesia's renewable energy community questions the government's often-used use of the term "new energy," a phrase that could open up the possibility of a return to fossil energy in other forms. “New energies,” the company says, include nuclear, hydrogen, marine, coal-based methane, liquefied coal, gasified coal, fuel cells, cogeneration and carbon emissions, and not carbon.
However, significant changes are taking place, at least a significant reduction in damage levels, and there are reasons to hope that momentum will shift towards more stable Indonesian players. The Stockholm Environment Institute confirms that palm oil-related deforestation has declined significantly in Indonesia, with the largest reductions in supply chains occurring due to zero deforestation pledges. The agency reports that Indonesia “has managed to significantly reverse the trend of deforestation, including deforestation for palm oil production.”
Between 2018 and 2020, deforestation due to oil palm reached a total of 45,285 hectares per year, just 18% of the 2008-2012 peak. What is important is that deforestation is decreasing while palm oil production continues to increase. In 2021, President Joko Widodo lifted a temporary freeze on new palm oil plantation permits, much to the chagrin of environmental activists, although the government said this was only a procedural procedure and that no new ones would be issued permissions.
According to the example
While criticizing Indonesia's behavior, Jerry Asmoro of 350.org said foreigners should tidy up their homes first. “Indonesia's energy transition away from fossil fuels must also be led by the countries with the world's largest emitters,” he said.
Big shifts in mindset are needed to make meaningful changes, said Iqbal Damanik, head of Greenpeace. “The goal of reducing emissions by 29% by 2030 compared to a business as usual scenario will be difficult to achieve if the same enforcement deficit continues.” We need not only energy transitions, but also changes in the way we treat nature. .
Coal mania makes Forest Watch Indonesia's Agung Adi Setyawan pessimistic. “How can they be serious when on the one hand they say they will reduce emissions, while coal mines continue to maximize production by cutting down forests?”
Tiza Mafira, director of the Indonesian Climate Policy Initiative, is very optimistic. "The game is on. It's a push and pull," he said. “The government said: 'We can do it if you pay us enough.' International donors say: 'Show us you can do it and we'll give you the money.'” Many are involved in the discussion, everything from politics to engineering to finance is now involved , but the more we talk about it, the more they say they know what to do instead of doing it.
He acknowledged that the symbolism of the Indonesian transition will be very strong. “This is very important,” concluded Mafira. “For a country of our size, our population, our economy and our carbon consumption, if we think it makes sense to do it, then all eyes in the world will be on us to see if we can do it.” Are you really willing to make sacrifices?
GO GREEN, GO LOCAL!
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