Fossil Fuel Subsidies in Indonesia Double with COVID-19 Recovery Package
Despite a commitment to net-zero, the government’s 2020 recovery budget incentivizes fossil fuels while offering limited support to renewable energy.
October 11, 2021—A new brief by the International Institute for Sustainable Development’s Global Subsidies Initiative (IISD-GSI) emphasizes the need for a fossil-free recovery in Indonesia and warns that the 2020 recovery package is not in line with climate targets.
Of Indonesia’s IDR 108.5 trillion in support for energy in 2020, IDR 95.3 trillion was given to fossil fuel-intensive state-owned enterprises. Experts warn that already-high fossil fuel subsidies have also more than doubled when adding the COVID-19 recovery budget. Current energy subsidies, IISD experts state, not only encourage wasteful consumption but also primarily benefit the rich and have negative social, economic, environmental, and health effects.
“Indonesia’s recovery is not green enough,” says Theresia Betty Sumarno, lead author of the brief. “A continued focus on fossil fuels in Indonesia overlooks the unprecedented opportunity to align economic recovery with climate targets. By embracing and incentivizing renewable energy instead of fossil fuels as part of the COVID-19 recovery plan, Indonesia could transform their energy sector, fuel their economy, and address climate change. It is not too late to achieve ambitious emissions targets.”
The brief highlights Indonesia’s renewable energy potential, with IISD experts noting that in 2019 alone, the renewable energy sector was responsible for creating 500,000 jobs in the country (IRENA, 2020). Experts emphasize that by reforming fossil fuel subsidies and reallocating funds to renewable energy, Indonesia could generate revenue for its COVID-19 recovery and provide direct support to the most vulnerable.
“Dedicating COVID-19 recovery money to promote the renewable energy sector is a double win for Indonesia,” says co-author Lourdes Sanchez of IISD. “Not only could it create jobs and help economic recovery, but it would support climate and renewable energy ambitions which are critical for future prosperity.”
While many countries have embraced renewable energy as part of their recovery efforts, this brief identifies that Indonesia’s support for fossil fuels in its COVID-19 recovery package far exceeds support for renewables. IISD experts highlight that while Indonesia is below its clean energy targets, by committing recovery funds to renewable energy the country could fuel positive impacts for both their economy and the planet.
Fossil fuels are a main driver of climate change, with subsidies directly incentivizing their production and use. With the incoming G20 presidency, Indonesia holds an important position in the global effort to both combat climate change and recover from COVID-19. This brief supports the elimination of fossil fuel subsidies and a transition away from fossil fuels to renewable energy as part of the COVID-19 recovery in Indonesia. In their brief, IISD experts provide recommendations for a green recovery that aligns the economy with climate action.
“If we don’t act quickly, the effects of climate change will be catastrophic. It is essential that COVID-19 recovery packages drive ambitious climate targets,” says Sumarno. “Right now, Indonesia has an opportunity to end fossil fuel subsidies, embrace renewable energy, and create a stronger economy for the future.”
Stimulus Covid-19 Lipat Gandakan Subsidi Bahan Bakar Fosil, Tak Sejalan dengan Pembangunan Hijau
Menurut para ahli IISD, subsidi energi fosil saat ini tidak hanya mendorong konsumsi yang boros, tetapi terutama menguntungkan orang kaya dan berdampak negatif secara sosial, ekonomi, lingkungan, dan kesehatan.
Oktober 2021 – Laporan baru dari International Institute for Sustainable Development’s Global Subsidies Initiative (GSI) (Inisiatif Subsidi Global dari Institusi Internasional bagi Pembangunan Berkelanjutan) menekankan perlunya pemulihan ekonomi bebas fosil di Indonesia dan mengungkapkan bahwa paket pemulihan ekonomi 2020 belum sejalan dengan target perubahan iklim.
Dari Rp 108,5 triliun stimulus fiskal yang diberikan untuk sektor energi Indonesia dalam program Pemulihan Ekonomi Nasional (PEN), Rp 95,3 triliun diberikan kepada Badan Usaha Milik Negara (BUMN) yang menggunakan bahan bakar fosil secara intensif. Para ahli memperingatkan bahwa subsidi bahan bakar fosil yang sudah tinggi juga meningkat lebih dari dua kali lipat ketika dengan pemberian subsidi lewat progam PEN. Subsidi energi saat ini, menurut para ahli IISD, tidak hanya mendorong konsumsi yang boros tetapi juga terutama menguntungkan orang kaya dan memiliki dampak negatif secara sosial, ekonomi, lingkungan, dan kesehatan. Stimulus ini lebih banyak menguntungkan industri fosil daripada industri energi bersih, mengingat bahan bakar fosil ini masih memegang peranan penting dalam perekonomian Indonesia. Namun demikian, kebanyakan subsidi fosil dinikmati oleh rumah tangga mampu dan kaya dibandingkan rumah tangga miskin sehingga mendorong konsumsi bahan bakar fosil yang berlebihan (Beaton et al., 2017).
“Pemulihan ekonomi di Indonesia masih kurang hijau,” kata Theresia Betty Sumarno, penulis utama laporan tersebut. “Indonesia belum memanfaatkan peluang yang ada untuk menyelaraskan pemulihan ekonomi dengan target iklim karena masih fokus mendukung bahan bakar fosil di Indonesia. Dengan merangkul dan memberi insentif pada energi terbarukan sebagai bagian dari rencana pemulihan ekonomi nasional, Indonesia dapat membawa perubahan di sektor energi, mendorong perekonomian, dan mengatasi perubahan iklim. Tidak ada kata terlambat untuk mencapai target emisi yang ambisius.”
Laporan tersebut menyoroti potensi energi terbarukan Indonesia. Ahli dari IISD mencatat bahwa pada 2019 saja, sektor energi terbarukan telah menciptakan 0,5 juta lapangan kerja di Indonesia (IRENA, 2020). Mereka menekankan bahwa dengan mereformasi subsidi bahan bakar fosil dan merealokasikan dana ke energi terbarukan, Indonesia dapat menghasilkan pendapatan untuk pemulihan ekonomi dan memberikan dukungan langsung kepada mereka yang paling terdampak.
“Mendedikasikan uang pemulihan ekonomi nasional untuk mempromosikan sektor energi terbarukan adalah sebuah kemenangan ganda bagi Indonesia,” kata rekan penulis Lourdes Sanchez dari IISD. “Tidak hanya dapat menciptakan lapangan kerja dan membantu pemulihan ekonomi, tetapi juga akan mendukung target ambisi perubahan iklim dan energi terbarukan yang sangat penting bagi kemakmuran masa depan.”
Sementara banyak negara telah menggunakan energi terbarukan sebagai bagian dari upaya pemulihan ekonomi mereka, laporan singkat ini mengidentifikasi bahwa dukungan Indonesia untuk bahan bakar fosil dalam anggaran Pemulihan Ekonomi Nasional jauh melebihi dukungan untuk energi terbarukan. Pakar IISD menyoroti bahwa meskipun Indonesia berada di bawah target energi bersih mereka, dengan memberikan dana pemulihan untuk energi terbarukan, negara ini dapat memicu dampak positif baik bagi perekonomian mereka dan planet ini.
Subsidi bahan bakar fosil telah mendorong secara langsung produksi dan konsumsinya, yang lantas menjadi kontributor utama perubahan iklim. Dengan kepresidenan G20 yang akan datang, Indonesia memegang posisi penting dalam upaya global untuk memerangi perubahan iklim dan pemulihan dari pandemi Covid-19. Laporan singkat ini mendukung penghapusan subsidi bahan bakar fosil dan transisi dari bahan bakar fosil ke energi terbarukan sebagai bagian dari pemulihan Covid-19 di Indonesia. Secara singkat, para ahli IISD memberikan rekomendasi untuk pemulihan hijau yang menyelaraskan ekonomi dengan aksi iklim.
“Jika kita tidak bertindak cepat, dampak perubahan iklim akan menjadi bencana besar. Sangat penting bahwa paket pemulihan Covid-19 mendorong target iklim yang ambisius, ”kata Theresia. “Saat ini, Indonesia memiliki peluang untuk mengakhiri subsidi bahan bakar fosil, mendukung energi terbarukan, dan menciptakan ekonomi yang lebih kuat untuk masa depan.”
About IISD
The International Institute for Sustainable Development (IISD) is an award-winning independent think tank working to accelerate solutions for a stable climate, sustainable resource management, and fair economies. Our work inspires better decisions and sparks meaningful action to help people and the planet thrive. We shine a light on what can be achieved when governments, businesses, non-profits, and communities come together. IISD’s staff of more than 250 experts come from across the globe and from many disciplines. With offices in Winnipeg, Geneva, Ottawa, and Toronto, our work affects lives in nearly 100 countries.
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