Global Policy Journal, Opinion, 23 October 2024
When pursuing a just energy transition, countries in the Global South, such as Indonesia, must navigate a complex policy regime—defined as a set of complex ‘realities’, e.g., politics, social context, regulations, etc., influencing policymaking. Using the case of Indonesia’s Just Energy Transition Partnership (JETP), our latest article investigates how such realities significantly influence the country’s energy transition aspiration.
Launched during its 2022 G20 presidency, Indonesia’s commitment to the JETP signals an essential step towards reducing carbon emissions and promoting renewable energy. However, it also highlights the Global South’s broader struggles in transitioning from fossil fuels to cleaner energy sources. From the outset, not only predicted to run for decades, it is already facing criticism, with some considering too elite and an instrument of foreign interests.
The country’s decades-long attempt to reform fossil fuel subsidies (FFSR) mirrors the ongoing challenges of its energy transition. The FFSR, which began after the 1998 Asian financial crisis, aimed to redirect funds from fossil fuel subsidies to more sustainable sectors like health and education. However, political and social resistance and social backlash have slowed its progress.
The (non-environmental) complexity
Indeed, ensuring the success of a just energy transition requires more than environmental commitment. It necessitates robust navigation of its policy regime consisting of complex political, social, and regulatory realities. Regarding the political reality, Indonesia’s policymaking landscape has long been resistant to major energy reforms, with political parties often prioritizing short-term electoral gains over long-term sustainability. The JETP may, unfortunately, not succeed without addressing this political resistance.
Energy transitions are inherently political, and the JETP is no exception. Political opposition to foreign-dominated financing structures and concerns over national debt are emerging as key challenges. Furthermore, coal, as a significant export and energy source, remains deeply entrenched in Indonesia’s political and economic systems.
Regarding social reality, public perception and social dynamics play a central role in shaping the outcome of policymaking, especially in the Global South. Considering the importance of these energy transitions, particularly in the South, gaining such social (and cultural) support is critical. Regarding the JETP, although framed as a national priority, it remains poorly understood by much of Indonesia’s population.
An independent survey (2023) has shown that less than 30% of the public is aware of the initiative, and those familiar with it are often concerned about the impact on electricity prices and energy security. This is especially true in rural areas where coal remains a vital energy source. Further, the potential distribution of benefits and the involvement of local communities in decision-making processes are still considered blurry, whereas these aspects are critical for building public trust in public initiatives like the JETP.
Regarding regulatory reality, Indonesia’s regulatory landscape presents significant barriers to the JETP’s success. Despite ambitious targets for reducing carbon emissions, the country’s energy policies continue to favor coal, which remains the dominant energy source.
The government’s contradictory stance—simultaneously pushing for renewable energy while expanding coal production—reflects deep-rooted regulatory inconsistencies. The JETP, to this end, generally lacks a foothold in its policy direction and a favorable environment for renewable energy development.
Toward a successful just energy transition
Considering the importance of just transitions for the Global South, advocates and administrations supporting them must also understand the above complex policy regime ‘realities’ to ensure success. Here are relevant policy recommendations, considering that, in the end, just energy transition needs not merely an environmental commitment but political and social backing as well as robust, coherent regulatory support to support its success.
Firstly, the success of the JETP significantly hinges on political backing from key stakeholders. To gain this support, advocates must frame the energy transition as a driver of economic growth and national security, not just an environmental issue.
The initiative’s political appeal will be increased by crafting narratives emphasizing how the JETP can help political leaders expand their constituencies and meet broader national objectives. Regular dialogue with political parties and leaders ensures that the JETP aligns with their agendas and remains a top priority.
Secondly, the JETP needs to go beyond top-down communication and actively involve local communities, particularly those most affected by the transition, such as workers in the coal industry. A comprehensive public engagement strategy should include targeted communication campaigns accessible to diverse communities across Indonesia.
Collaborating with respected community and religious organizations, often influential in the Global South, can help foster a sense of ownership and trust. Moreover, it is vital to ensure that vulnerable groups—such as women, youth, and Indigenous communities—are represented in decision-making processes to ensure that the transition is equitable and inclusive.
Thirdly, relevant national regulatory frameworks must be overhauled to ensure consistency in energy policies. This includes addressing the continued reliance on coal, which contradicts the country’s renewable energy targets. The JETP can catalyze further reviewing and revising regulations hindering renewable energy growth.
The government can create a more stable and predictable investment climate by providing long-term regulatory clarity and ensuring that subsidies are redirected from fossil fuels to renewable energy. Additionally, strengthening enforcement mechanisms will ensure that policies are implemented effectively, reducing the risk of policy reversals that have hampered previous energy reform efforts. (*)
Muhamad Rosyid Jazuli is a PhD Candidate at UCL STEaPP.
This article was first published in Global Policy Journal.
