Money, Politics Imperil Indonesia's $21.5 Billion Climate Deal
Comment of the Day

September 04 2023

Commentary by Eoin Treacy

Money, Politics Imperil Indonesia's $21.5 Billion Climate Deal

This article from Bloomberg may be of interest. Here is a section:

The initial promise of peaking Indonesia’s power sector emissions by 2030 at no more than 290 million tons of carbon dioxide, about 20% below a baseline level for the year, looks out of the question. An alternate scenario laid out in the draft plan would raise the target maximum to 395 MT of CO2, to account for the construction of new captive plants to serve growing industrial power needs.

Officials have said they are aiming to have a revised—perhaps final—investment plan before COP28 begins in Dubai at the end of November, taking on public feedback. But to do that, they will need to come to agreement on at least three major, interrelated issues: the money, the emissions target and the mechanics of the coal phaseout, including changes to Indonesian laws and policies that hold back wider green progress.


But there may not yet be enough in either bucket. There is just $289 million in grants, with half earmarked for technical assistance—funding for experts, consultants and advisors to model and support the energy transition. Almost all of the rest is loans, at interest rates to be determined later.

Eoin Treacy's view

Talk is cheap. This is not the first time we have seen photo ops for politicians, and headline- grabbing promises of large capital infusions, only for reality to intercede a couple of years later. There is no getting around the fact that coal is cheap, available, and easy. Every other alternative is either more expensive, intermittent, or imported.

Developing countries have no time for handwringing. They have large young populations demanding improved living standards now. Moreover, European, and North American consumers are in no mood to write cheques, when their own living standards are declining and public services are under pressure.

This article, written from an Indian perspective, discusses how China is avoiding shedding its emerging market identity to ensure it does not have to comply with stricter emissions and economic regulation standards. Here is a section:

All of us, especially in real developing countries, need to recognize that China no longer needs any developing-nation exceptions and privileges, but should be treated like the dominant economic power it now is. Piecemeal efforts by the EU and the US to first confront and then pacify Beijing — visible in Commerce Secretary Gina Raimondo’s recent visit – need to be better organized. And they need to find allies in the developing world.
Glencore is still in a messy discussion about acquiring Teck Resources. The biggest point of contention remains the fate of Teck’s coal business. Both shares remain in consistent medium-term uptrends and sustained moves below their respective trend means would be required to question medium-term scope for continued upside.

Nuclear energy remains the obvious answer to reducing coal consumption. What is particularly interesting is how China has amped up misinformation and anti-Japan rhetoric heading up to Fukushima’s wastewater release program. The extent of emotionality on social media hit new heights over the last couple of weeks and is about to come to swift end. 

A CCTV crew took a Geiger counter to Fukushima and found radiation levels in the area are very low. That prompted netizens to buy their own geiger counters and test China’s ports and even their own homes. The results were much worse than those present in Japan. The result is the entire story will be fully suppressed within the week.
Kazatomprom continues to extend its recovery. 

Back to top

You need to be logged in to comment.

New members registration