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UAE deal should lead to more sustainable energy investment

Royal tour: President Joko “Jokowi” Widodo chats with Crown Prince of the Emirate of Abu Dhabi Sheikh Mohamed bin Zayed al Nahyan during the prince’s visit to Bogor Palace, West Java, on July 24, 2019

Arie Afriansyah and Amira Bilqis (The Jakarta Post)
Jakarta
Mon, January 20, 2020

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UAE deal should lead to more sustainable energy investment

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oyal tour: President Joko “Jokowi” Widodo chats with Crown Prince of the Emirate of Abu Dhabi Sheikh Mohamed bin Zayed al Nahyan during the prince’s visit to Bogor Palace, West Java, on July 24, 2019. (JP/Seto Wardhana)

President Joko “Jokowi” Widodo’s recent visit to the United Arab Emirates (UAE) resulted in a US$6.8 billion investment deal to fund a number of development projects across Indonesia. Most of the investment will go to certain fields such as agriculture, education and, most importantly, sustainable energy, with $129 million committed to building Indonesia’s biggest solar power plant in Cirata, West Java, which will contribute to reducing carbon emissions.

The Kyoto Protocol and the Paris Agreement have different approaches to meet the emissions cuts needed to keep global warming less than 2 degrees Celsius above preindustrial levels. Unlike the Kyoto Protocol, which takes a top-down approach in setting the target for each country, the 2015 Paris Agreement takes a bottom-up approach, allowing each country to set its own target through the National Determined Contribution (NDC).

This change in approach has resulted in a shift in thinking, especially among non-Annex I (developed) countries. The approach emerged during negotiations at the 2014 Conference of Parties (COP) 20 in Lima as a result of concerns that developed countries would pledge lower NDCs under the Paris Agreement than the targets set by the Kyoto Protocol.

This concept, known as “non-backsliding”, is written in the preambles of the Lima Decision and urges Annex I countries to commit to emissions cuts beyond their Kyoto target, and even greater cuts for countries that have met their Kyoto targets.

The negotiations then resulted in the Principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), Progression and Highest Possible Ambition in Article 4.3 of the Paris Agreement, which stipulates that each country is to provide a progressive NDC while considering its capabilities as per the CBDR-RC. The CBDR-RC principle also offers developing countries the opportunity to set a conditional target to be achieved only with international support.

Unlike Switzerland, Indonesia as a non-Annex I country that does not have a Kyoto target and is struggling to pledge its progressive NDC ambition due to shortcomings such as financing, technology access and other challenges in fighting climate change.

As a result, Indonesia was given access to international funds through the Green Climate Fund (GCF), primarily from Annex I countries, as part of its pledge to continue pioneering climate action. Another privilege for non-Annex I parties (developing countries) includes a cooperative approach as part of the Paris Agreement’s contribution mechanism, such as direct government-to-government collaboration in achieving their conditional targets.

The differentiated responsibilities provide flexibility for developing countries, so more non-Annex I parties participated in the Paris Agreement. Altogether 187 parties, including the European Union, submitted their emissions cut ambitions under the Paris Agreement, compared to 37 countries under the Kyoto Protocol.

The latest COP in Madrid neither resulted in a deal on carbon markets nor determined any significant climate action. Notwithstanding its shortcomings, 2020 marks an important year for the future of the Paris Agreement, with Article 4.9 requiring parties to submit their updated NDCs to the United Nations Framework Convention on Climate Change (UNFCCC) secretariat.

In 2016, Indonesia set an ambitious target of reducing greenhouse gas emissions by 26 percent on its own and by 41 percent with international support from the “business as usual” scenario by 2020. For its first NDC, Indonesia increased the state budget for climate mitigation to 47 percent and established the Indonesian Environmental Estate Fund (BPDLH). Further, Indonesia initiated mitigation projects with financial assistance from the GCF to keep its emissions below 165.9 metric tons of carbon dioxide equivalent (MtCO2e).

However, Climate Action Tracker has rated these efforts “highly insufficient” to keep “warming to below 2 degrees Celcius, let alone with the Paris Agreement’s stronger 1.5-degree limit”.

Jokowi’s recent speech at the Abu Dhabi Sustainability Week asserts Indonesia’s intention to advance development and find climate change solutions through the UAE’s investment deal in sustainable energy. His speech indicates that he will move away from coal-fired energy during his second term.

The trend in green growth investments, specifically sustainable energy, will balance the large generation of coal-based power and eventually boost Indonesia’s capability to live up to its NDC ambition.

To date, Indonesia has yet to clarify whether it will upgrade its Paris target. Nevertheless, it has announced a plan to adjust its NDC in the 2020-2024 National Medium-Term Development Plan. According to the World Resource Institute, Indonesia’s energy sector “will start to dominate Indonesia’s carbon emissions in the next decade”.

Indonesia therefore needs to prioritize climate change action in the energy sector by promoting renewable energy, which it has targeted to contribute 23 percent of the national energy mix by 2025 and could lead to more sustainable energy-related investment in the country.

The government should utilize the UAE deal to build geothermal power plants. The Gunung Rajabasa and Wayang Windu Phase 2 geothermal power projects have respectively reduced emissions by up to 1.105 MtCO2e per year and 794.832 tons of CO2e per year. As the second biggest producer of geothermal energy, Indonesia needs to make full use of its natural resources.

As the energy sector has contributed the highest emissions aside from forestry since 2010, the UAE deal appears to be the silver lining in Indonesia’s struggle to achieve its NDC. More investment in sustainable energy is recommended if we are to meet our Paris target.

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Arie Afriansyah is a senior law lecturer at the University of Indonesia (UI); Amira Bilqis is a researcher at the UI Center for International Law Studies (CILS).

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