Indonesia currently depends on coal-based energy, which represents the main contributor to the country’s carbon dioxide (CO2) emissions. Indonesia’s coal-producing regions—East Kalimantan, South Kalimantan, and South Sumatra—emit around 30 million tonnes of CO2 equivalent (MtCO2e) per year from coal mining methane and coal-fired powerplants (Setyawati & Setiawan, 2024). In this context, the country is committed to playing a proactive role in mitigating its emissions in accordance with its commitment to the Paris Agreement of 2015. Indonesia released its enhanced nationally determined contribution in 2022—pledging to reduce emissions from the energy sector by 358 MtCO2e by 2030, a target of around 12.5% of the country’s emissions reduction goal. The energy transition will provide access to clean energy, encourage the growth of the green economy, and reduce emissions. However, to ensure the process benefits vulnerable groups, planning and policies must embed an inclusive approach to a just transition in coal mining communities.
This research “Coal Transition Impacts and the Approach to Inclusive Just Transition Policies in Indonesia” published by the International Institute for Sustainable Development (IISD) presents an economic analysis of the impact of coal mine closures on sectors linked to coal mining. This analysis takes a scenario-based approach to look at potential shocks to economic output and employment. These potential losses are then replaced by new industries within the green economy, and the situation is assessed for potential economic, employment, and other improvements. This endeavour thus provides a picture of what might be expected and how to prepare for it. Alongside this, a qualitative study assesses the socio-economic impacts on those employed in the coal mining sector and on communities in coal mining towns. The findings and recommendations of the study use scenarios to help policy-makers better plan for a just transition in Indonesia.
Access the report here
