He was responding to the presentation of National Development Planning Minister Suharso Monoarfa, who had mapped out alternative scenarios in which Indonesia could reach net zero by the years 2045, 2050, 2060 and 2070.

Notwithstanding the March 2021 Environment and Forestry Ministry announcement that Indonesia would reach net zero by 2070, as the Net Zero Summit indicated, the debate on net zero in Indonesia continues.

But what is net zero and why is it of such importance that it would warrant a national summit? To put it simply, net zero means that all emissions should be balanced by absorbing an equivalent amount of emissions from the atmosphere, hence “net zero”. Its importance lies in the reality that the target set by the 2015 Paris Agreement on climate change to keep the global temperature to 1.5 degrees Celsius above pre-industrial era levels will not be reached at present rates of emissions.

Only a global commitment to net zero emissions can prevent what Emil called a “hell on earth” that would be catastrophic to all on the planet. That commitment, he continued, can only be made if there is a paradigm shift in the thinking of government, civil society and the business sector toward a world centered on natural capital. However, that paradigm shift is still to come.

Countries must transform their economies and business sectors to meet their net zero commitments. In the past year, more large businesses have made net-zero commitments. More should follow as increasing business regulatory pressure will be brought to bear on the business sector from governments needing to deliver on their commitments. Fossil fuel subsidy reforms, tax reforms and mandatory ESG and climate risk disclosure are just a few of many more policy interventions to come.

However, despite the increased number of corporations committing to net zero, there are many more that are hesitant.  According to a PricewaterhouseCoopers report, as of February 2021, only about 8 percent of companies in the Global Fortune 500 have committed to net zero. A Standard Chartered survey of large companies and investment specialists undertaken between September and October 2020 found that lack of funding was perceived to be the main obstacle to net zero transition. Carbon-intensive industries and emerging market companies in particular were slower in the transitioning. 

Nonetheless, Bill Winters, group chief executive of Standard Chartered felt that, “despite the hurdles, action needs to be swift. We must act now, and we must act together: companies, consumers, governments, regulators and the finance industry must collaborate to develop sustainable solutions, technologies and infrastructure.”

The aim of "The Economics of Biodiversity", a report published in February 2021 by the United Kingdom Treasury and written by the economist Partha Dasgupta was to encourage such a sense of urgency and a paradigm shift.

The Dasgupta Review makes three interlinked claims. The first is that nature is an asset, just as people and capital are assets. Therefore, investing in biodiversity should reduce risks and uncertainty by increasing the productivity and resilience of nature. Yet we continue to underinvest in nature and increase the risks to the planet by its depletion.

Second, there is an imbalance in global supply and demand. Demands should equal, or be less than, the ability of nature to regenerate and supply its goods and services.

Third, we are all embedded within nature, including our economies. Unfortunately, most thinking on economics does not take nature into account. and therefore, does not recognize its limits. That thinking needs to change if growth is to be sustainable.

Several governments have shown more advances toward the paradigm shift. The UK government has committed by law to a net zero economy by 2050. Other countries doing the same are Sweden (2045), France (2050), Denmark (2050), New Zealand (2050) and Hungary (2050). Bhutan in South Asia and Suriname in South America are the only countries absorbing more greenhouse gases than they emit, i.e. the carbon negative espoused by Emil. Other countries that have publicly committed to a carbon neutral economy are China, Japan and South Korea.

The UK is this year’s chair of the COP26 United Nations climate conference in November in Glasgow, where the Dasgupta Review is expected to be a primary input into the global environmental discussions. Indonesia will be the cochair of the Forest, Agriculture and Commodity Trade (FACT) Dialogue embedded in COP26 to accelerate the transition toward more sustainable land use practices and advancing a deforestation-free supply chain. The dialogue can be an important and significant venue toward the development of “net zero” strategies.

In this context, Indonesia has undertaken effective collective action initiatives in combating environmental degradation that can be modeled within a net zero economy setting. For example, the recurrent forest fires that have plagued the region emanating from Indonesia have been significantly reduced, a result of collective actions combining tougher government regulations, and community, private sector, NGO and local government partnerships.

The formation of the Fire Free Alliance, a voluntary organization of companies, communities and NGOs is an example of a collective action initiative that develops a community of purpose and strengthens the enabling environment, while contributing to Indonesia’s nationally determined contribution (NDC).

With the enabling environment created by government policy, Indonesian corporations need to lead in creating their corporate net zero strategies. A few are going in that direction as they begin to feel pressures from government regulators, investors and youth to take corporate climate action.

With the principle of all embedded in nature, corporations will need to adopt incipient best practices, incorporating climate governance formally into their corporate boards. Good corporate governance should intrinsically include effective climate governance. But much more needs to be done and much more urgently.

According to the “State of the Global Climate 2020” report by the UN’s World Meteorological Organization, which was released ahead of the United States-led climate summit with 40 world leaders last week, the world is running out of time to tackle the climate crisis.

As the UN Secretary-General, Antonio Guterres, has warned, “time is fast running out to meet the goals of the Paris Agreement. We need to do more, and faster, now.”

 ***

The writer is Southeast Asia director of Tropical Forest Alliance.