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A strong climate target will attract global investors to Indonesia
In practice it means the days of coal, oil and gas to power our homes and businesses are numbered.
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ndonesia has a long and proud record in helping to solve global environmental problems. Nearly 20 years ago Bali hosted the preparatory meetings ahead of the Rio+10 World Summit on Sustainable Development – a landmark moment in the shift towards more sustainable growth.
In 2007 the government generously hosted the Conference of Parties (COP) 13 UN climate summit - a memorably tough meeting - but one that ultimately laid the foundations for the Paris climate deal in 2015.
A country as vast as Indonesia, with populations so close to the sea, and such richly endowed rainforests and biomes cannot fail to note the power and glory of the natural world.
Leaders of the planet's largest predominantly Muslim nation have long stood shoulder-to-shoulder at UN climate and biodiversity summits, as I expect President Joko “Jokowi” Widodo will do again at the COP26 summit this November.
Much has changed since 195 countries - among them Indonesia - signed the Paris Agreement. Five years later the evidence is clear: green investments are accelerating, fossil fuels are edging closer to history, the global economy is demanding more sustainable business models and driving greater accountability.
Major investors are acting. BlackRock's Larry Fink and Blackstone's Stephen Schwarzman are responsible for assets valued at US$9 trillion. Both are shifting portfolios off coal. Countries are shifting targets. China, the European Union and United States are the world's three largest economies: have shown leadership by committing to carbon neutrality in the next 30-40 years.
In practice it means the days of coal, oil and gas to power our homes and businesses are numbered, our economies become more sustainable and the preservation and enhancement of forests becomes increasingly critical.
This is an economic shift that no government - however big or small - can ignore. Taxes on high carbon goods will inevitably increase, global supply chains will be under increasing scrutiny, all driven by political pressure and shifting consumer choices.
As the last year has shown, we live in a risky world. Yet we have power to mitigate those risks, if leaders act in concert with institutions like the UN, and in forums such as COP26.
The summit is the moment for governments to affirm their commitment to the Paris deal, and submit new, stronger, stronger climate plans at the UN.
Indonesia's plan for a new $15 billion Sovereign Wealth Fund should be lauded: this is the kind of foresight and leadership we need to see globally as we try and build back better from COVID-19.
The natural assets for this fund to back will be those with strong environmental and social records. Why? Because these are the ones that thrived as markets imploded last year. These are the ones where Blackrock and Blackstone see their future. These are in line with the standards the governments of Japan, Canada, the US and the EU see as their destiny.
Rumor has it that Jakarta is reluctant to follow the market trends. Recent reports suggest that the government will resubmit its previous climate plans without increasing its emission reduction targets. This target is insufficient to reach the 1.5 degrees Celsius maximum warming target laid out in the Paris Agreement.
The government will - I know - take a decision based on data only it has access to, yet it strikes me as an opportunity missed if Jakarta does not join other major Group of 20 powers in building the future we want and need. In January this year President Jokowi urged countries to take “extraordinary measures” on climate, warning of his country’s acute vulnerability to storms and sea level rise.
“We must continue to promote green development for a better world,” he said. The President is correct. This is the path all countries need to take through the coming decade and over the next 30 years as we wean ourselves off fossil fuels.
Nearly 120 countries have now indicated that carbon neutrality is their ultimate destination, among them China, the US and the European Union. A fellow G20 leader, Jakarta’s place is with those major economies.
Given the growing tide of commitment to achieve net zero by 2050, the COP26 Glasgow summit would be the perfect venue for the President to announce Indonesia plans to step up.
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The writer is president of Gold Standard Foundation and former executive secretary of United Nations Framework Conference on Climate change (UNFCCC).
