Indonesia's Climate Crisis: Growth Versus Environment
Just months ago, Bali experienced its worst flooding in over a decade during what should have been the dry season. Instead of empty wells, farmers watched their crops wash away as roads transformed into raging brown rivers. Houses collapsed in the torrents, and tragically, 17 people lost their lives.
This disaster highlights Indonesia's critical paradox: while being one of the world's most climate-vulnerable nations, it simultaneously ranks as the sixth-largest greenhouse gas emitter globally. The archipelago nation of 283 million people faces an unprecedented challenge balancing economic development with environmental responsibility.
The Coal-Fuelled Economy
Indonesia's remarkable economic growth - averaging 5% annually since 1997 - has come at significant environmental cost. This progress has been powered overwhelmingly by carbon-intensive resources, with coal providing 70% of the country's electricity while maintaining Indonesia's position as the world's largest coal exporter.
More than 90% of Indonesia's energy comes from fossil fuels, and emissions remain substantial. Between 2018 and 2020, Indonesia released an average of 1.5 billion tonnes of CO2-equivalent annually, representing approximately 3.5% of global emissions.
Putra Adhiguna, South-East Asia director at the Institute for Energy Economics and Financial Analysis, describes Indonesia's renewable growth as "really quite abysmal." He emphasises the need to "dismantle its coal mindset," particularly addressing the domestic price cap that keeps coal artificially cheap and blocks renewables from competing.
Deforestation and Industrial Expansion
The land sector accounts for about 40% of Indonesia's emissions, primarily from deforestation and peatland fires. Indonesia contains 10% of the world's remaining tropical rainforest and the largest area of tropical peatlands of any country, storing tens of billions of tonnes of carbon.
Although deforestation rates have fallen to their lowest in two decades, environmentalists worry about backsliding. The government's massive food-estate programme has cleared rainforest in Papua and Kalimantan, while palm oil biofuels expand under B35 and B40 mandates. Indonesia produces 55% of the world's palm oil, a sector contributing 4.5% to GDP and employing over 3 million people.
Satellite data reveals new deforestation and fire hotspots in South Sumatra and Central Kalimantan. Vast peat swamps, once crucial carbon sinks, continue being drained for plantations, leaving tinder-dry material that burns for weeks.
Climate Impacts and International Pressure
The consequences are already devastating for Indonesians. Made Krisna Dinata, executive director of NGO Walhi Bali, observes: "Bali was a place that rarely experienced flooding. Now, we can no longer see or even predict when these seasons will come and go."
Across the archipelago, climate-related disasters threaten food security and traditional lifestyles. Urban areas face extreme heat, while coastal regions confront sea level rise, coral bleaching and sinking land. Indigenous communities suffer disproportionately, often lacking access to government social and health insurance due to their remote locations.
Indonesia's updated climate plan targets a 31.89% emissions cut unconditionally by 2030, rising to 43.2% with international support. However, meeting these goals requires at least $470 billion in investment by 2030. The Just Energy Transition Partnership, a $20 billion pledge from wealthy nations to phase out coal, has stalled in bureaucracy.
As Adhiguna notes, "Indonesia is making a boatload of money out of fossil fuel. That money needs to be reinvested in the country for greener opportunities." With China, Indonesia's largest coal customer, shifting toward renewables, the pressure for change intensifies.
The road ahead demands difficult choices between short-term economic gains and long-term sustainability. For a nation caught between development aspirations and climate vulnerability, the time for decisive action is now.
