Government Strategy to Boost Economy Without Carbon Emission Explosion
The Ministry of National Development Planning/Bappenas is committed to increasing Gross Domestic Product (GDP) in the future while simultaneously striving to reduce carbon emissions in Indonesia.
Nizhar Marizi, Director of Environment at the Ministry of National Development Planning/Bappenas, stated that economic transformation is one of the key agendas outlined in the National Long-Term Development Plan (RPJPN). This will be implemented through the application of a green economy, which is expected to support a national economic growth target of 8% by 2029.
“We hope this can be achieved by 2029, but the requirements to reach this are quite high in terms of consequences. There must be an additional investment of 17% compared to our usual investment levels, and exports must also increase by more than 11% per year from our current export levels,” he said during the Media Gathering for the launch of the Green Indonesia Future Initiative (GIFT) in Jakarta on Tuesday.
As an illustration, the implementation of the green economy aims to balance national welfare with environmental sustainability, focusing on investment, capital, infrastructure, employment, and skill development. In other words, the green economy concept encourages income levels equivalent to developed nations while also targeting a reduction in carbon emissions.
“This means our GDP must rise, but we also have a target to reduce emission intensity. So, GDP must increase, but the emission levels must decrease; this is at least what we want to achieve through the green economy concept in Indonesia,” he explained.
To achieve this goal, one step that can be taken is to intensify the downstreaming of natural resources, including both minerals, agriculture, and plantations. However, downstreaming efforts must still consider the emission levels potentially released from factory facilities.
“For the green economy, there are two pathways. First, we use decarbonisation. This involves how we conduct downstreaming while using lower-carbon technology,” he clarified.
The next effort involves fostering new economic growth centres and sectors. Here, the Ministry of National Development Planning/Bappenas is actively conducting evaluations and formulating strategies to develop priority sectors based on Indonesia’s natural wealth, particularly biodiversity, which can be utilised sustainably.
On the same occasion, Leonardo Teguh Sambodo, Deputy for Food, Natural Resources, and Environment at the Ministry of National Development Planning/Bappenas, explained that to escape the middle-income trap, Bappenas is continuously working on economic transformation. One method is by reducing dependence on raw commodities and shifting towards processing those commodities to increase added value.
“This way, we can export better products with high added value, thereby increasing our income, which we hope will subsequently benefit public welfare. On the other hand, there are foundational requirements for such high growth that need to be addressed, namely by building our social and ecological carrying capacity,” said Teglaus.
Furthermore, Teguh mentioned that Indonesia needs to build its national resilience independently and sustainably through food, energy, and water self-sufficiency as part of the economic transformation effort. Additionally, the utilisation of new growth sources must continue, such as the optimisation of the blue economy and the green economy, which are inherently environmentally conscious.
He added that one of the directives of the RPJPN is to control and encourage economic growth by processing raw commodities into high-value-added products, implemented while considering environmental carrying capacity. At the same time, these efforts must be capable of generating new jobs for the wider community.
“These are parts that have not yet been optimally utilised in Indonesia, and this is an inseparable component of how we drive economic growth while simultaneously practising sustainable methods,” he concluded.