Dr. Syed Mehboob
Political and Economic Analyst
http//:www.thenewslark.com
drmehboob.thenewslark@gmail.com
Indonesian leadership is sincere, hardworking, and has a vision to convert Indonesia into a highly developed, prosperous, and dignified country. For the last couple of decades, it has made steady development, and now it looks forward to a bright and prosperous future.
Vision 2050 is the outcome of in-depth thinking by Indonesian leadership. Behind this vision, the business community and its representative body, the Indonesia Business Council for Sustainable Development ( IBCSD), is on board, and it is working like a think tank and striving to turn this vision into a reality. Indonesia Chamber of Commerce is also a partner in this project. Since climate change is one of the major challenges for the future outlook of business, a comprehensive, vigorous plan was needed to cope with this challenge, and VISION 2050 is the answer to this challenge. There are some questions like can Business Objectives Can robust ecosystems and the services they provide to human civilization co-exist with 21st century global capitalism? Can the same capitalism help bring millions out of poverty while providing jobs for the growing young population of the developing nation such as Indonesia, and ample resources for the aging population in many of the industrial sector? Such questions would have seemed melodramatic a decade ago. Yet that was before the Millennium Ecosystem Assessment (MEA) found that two-thirds of ecosystem services are being degraded or used unsustainably. Two of more significant such services are predictable climate and fresh water; services that appear to be most dramatically affected.
Indonesia’s Vision 2050 focuses on achieving a net-zero emission, high-income, and sustainable nation by 2050. Key pillars include transitioning to renewable energy, retiring coal plants by 2039, promoting a circular bioeconomy, ensuring social inclusivity, and fostering strategic international partnerships for technology transfer and economic development.
The nation aims to reach net-zero emissions before 2050. This includes ambitious plans to build 75 Gigawatts of renewable energy capacity within the next fifteen years and to accelerate the retirement of all coal-fired power plants to 2039. The Indonesia Business Council for Sustainable Development (IBCD), aligned with the UN initiatives, is developing a sustainable “ Business View” for 2050. Key actions include adopting a circular economy, promoting sustainable diets, reducing food waste, and strengthening agroforestry. Supported by the World Bank, projects aim to improve solid waste management through local capacity building and national reforms.
Urbanization and social harmony are focus areas, emphasizing education, cultural diversity, and economic opportunities for all citizens to ensure quality. To pursue its goal, Indonesia adopted a joint vision with France, “Vision 20250” in 2025, focusing on technology transfer, education, and strengthening defense and economic ties. Specific guidance for agribusiness is being developed, including in agricultural productivity and bio-based products to support food safety and environmental health.
Indonesia is the largest economy in Southeast Asia and world’s fourth most populous country with over 283 million inhabitants, which live across the archipelago region consisting of 17,500 islands. The country is a bridge for the two continents of Asia and Australia, allowing this strategic position to influence the country’s economy with its abundant potential of natural resources. Having said that, Indonesia represents a great opportunity for both domestic demand and the global market demand. In addition, the consumption pattern is expected to grow due to natural population increase, locally and globally, and the significant increase in purchasing power in Indonesia because of the increase in the middle-class income population. The remaining natural resources contained in the stagnant area will soon lead us to the scarcity challenges for the raw material supply of the industry, amid the growing needs aligned with the rising population.
Following the global trends for sustaining the world in the long run, Indonesia significantly and essentially has a motive to do the same action. The existing global consumption is estimated to require 2 to 3 planets to feed the people in the next 20 years. Furthermore, from the ecosystem perspective, especially its unique biodiversity, Indonesia’s tropical forest is an integral part of the world’s climate and water systems that provide life support to the earth. The keywords for such actions are a holistic approach between consciousness of present planetary boundaries, visions of the future existence, and innovation to overcome the possible challenges. Thus, sustainability will require new leadership skills and a mindset in all development components, and solving sustainability challenges will require public and private sector collaboration. Many of the Indonesia-based companies have made tremendous progress in becoming more efficient in terms of energy, water, and resource use. Progress in eco-efficiency may have to give way to radical changes in business systems. This is the reason why innovation in policy making is urgently needed as much as the technology innovation itself.
Holistic Vision of ten elements Given the various potential sector in Indonesia, large size and important businesses, the power of significant productivity of natural resources, following are the possible elements proposed: · Human Development and Society Development · Economy · Marine · Agriculture · Forest · Energy & Power · Tourism & Cultural Diversity · Infrastructure · Transport, ICT and Connectivity · Resource Efficiency and Waste Management Project Approach The Indonesia Vision 2050 project is designed as a back casting exercise which represent vital development agenda of Indonesia private sector. The research is to help Indonesian stakeholders ensure the readiness of business players toward national and global future challenges.
Indonesia’s energy sector faces critical challenges due to its heavy reliance on coal as the dominant power source, which contributes to environmental degradation and rising CO2 emissions, resulting in transition needs for renewable energy as targeted in the Nationally Determined Contribution (NDCs) 2060. In addition to these, hydrogen energy also shows great potential for Indonesia’s energy needs. There are four simulated power generation scenarios: the business-as-usual (BAU) scenario, the hydrogen incorporation (HYD) scenario, the coal phase-out (CPO) scenario, and the progressive (PRO) scenario. The analysis indicates that the BAU scenario emerges as the most cost-effective approach for meeting Indonesia’s future electricity demand. However, due to its inability to fulfill NDCs, the CPO scenario is shown to be more viable from practical and cost perspectives, requiring 406.9 GW capacity and USD 114.6 billion investment. On the contrary, the HYD scenario largely aligns with Indonesia’s hydrogen target, potentially contributing 1–5 % of energy demand and reducing coal reliance. Additionally, while the PRO scenario has the highest investment cost (USD 151.4 billion), it also provides the lowest plant capacities (367.1 GW), offering the highest output-to-capacity ratio. The result suggests the necessity to enact government collaboration and construct a feasibility analysis to implement renewable energy development.
Presently, Indonesia’s energy mix is still dominated by fossil fuels, , particularly coal. This is referenced from annual production data, which shows that Indonesia has produced around 615 million tons of production, with 49.93 GW of available power plants in 2023. Additionally, as of November 2022, coal has been priced at around USD 308/ton as a reference price, enhancing Indonesia’s position as one of the largest coal producers in the world. At one point, the Indonesian government initiated a 35,000 MW coal power plant investment through collaboration between Perusahaan Listrik Negara (PLN) and Independent Power Producer (IPPs)
However, there are ongoing concerns over the adverse environmental impact of coal on the environment. In 2019, annual CO2 emissions were four times higher than they were in 1990. The long-term threat led to the issuance of Presidential Regulation No 112/2022, which mandates the early retirement of coal-fired power plants (CFPP) by 2030 and replacing the created gap with renewable. As a result, to fulfil Indonesia’s National Determined Contribution (NDC), the country may need to decommission existing fossil-fuel power facilities and expand the production of renewable power plants, including integration of hydrogen-based energy, coupled with nuclear power adjustments. (continued )
