Indonesia, the fourth most populous country and the largest economy in Southeast Asia, faces significant challenges as it transitions from a fossil fuel-based economy to achieving carbon neutrality by 2050. Despite rapid economic growth that has reduced poverty, the country remains vulnerable to climate change due to its reliance on natural ecosystems and geographical factors, with climate-related costs projected to reach 2.5%-7% of GDP by 2100. The poorest communities are expected to bear the greatest burden. According to IRENA’s analysis, a comprehensive and ambitious energy transition under a 1.5°C Scenario could yield substantial socio-economic benefits, including a 0.5% higher GDP, 2.6% more jobs, and an 8.1% increase in social welfare by 2050 compared to current plans. Renewable energy sectors, particularly bioenergy and solar, could see employment grow significantly. However, achieving these outcomes requires a holistic, just transition policy framework, strong political commitment, and enhanced cooperation and capacity building across government levels, supported by international partnerships.
Link to download: https://www.irena.org/Publications/2023/Jan/Socio-economics-of-the-energy-transition-Indonesia