MANDALA

Insights

Indonesia is actively addressing climate change by strengthening its commitment to reduce emissions and implementing a National Registry System (SRN) to oversee carbon projects. While SRN faces challenges in gaining international recognition and ensuring inclusivity, it aims to align with global standards to enhance its carbon offset market. However, it is imperative to ensure that businesses of all sizes are included in these efforts to mitigate climate change.

Explore the economic and geopolitical dynamics, while addressing environmental concerns. Discover the implications shaping the region's future landscape.

Indonesia, a top ten emitter of greenhouse gasses, must transition to a green economy due to costly impacts of climate change that disproportionately affect vulnerable populations, and positive economic opportunities in the long run, including potential GDP growth of 6.5% and creation of 2.8 million green jobs. The country's mitigation plan is rated as "highly insufficient," and no explicit net zero target has been communicated. The power, manufacturing, and transportation sectors account for 78% of Indonesia's greenhouse gas emissions and must achieve the country's emission reduction targets. However, the country faces significant challenges in reducing emissions in these sectors, such as the continued dominance of fossil fuels in the power sector and the heavy reliance on fossil fuels in transportation. Nonetheless, Indonesia has an opportunity to pursue policies and measures, such as revising planning documents, reducing reliance on coal and other high-emitting industries, boosting renewable energy development, and increasing the use of mass transportation and electric vehicles, to successfully transition to a green economy.

Defining green economy

A green economy prioritizes human well-being, social equity, and reduces environmental risks. Three pillars characterize it: sustainability/ environmentally friendly, resource efficiency, and social inclusivity. The “greenness” of a country is determined by its NDC targets, policies, and measures in alignment with global climate goals. Currently, Indonesia ranks as highly insufficient in achieving these goals.

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