PALMOILMAGAZINE, JAKARTA – The future government of Indonesia under President Prabowo Subianto faces formidable challenges posed by geopolitics and climate change. Achieving the vision of Indonesia Emas 2045, as advocated during the Prabowo-Gibran election campaign, requires innovative approaches beyond conventional methods.
A crucial step for the new administration is to introduce a cabinet comprised of experts rather than political party representatives. This structural reform aims to enhance efficiency through professional integration.
Given Indonesia’s economic reliance on natural resources like mineral and coal mining, as well as palm oil plantations, the new cabinet must focus on three strategic goals. Firstly, sustainable economic development entails balancing economic growth with environmental conservation, employing principles like the “polluter pays principle” and promoting investments in environmental initiatives.
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Secondly, reducing carbon emissions involves transitioning from commodity-based economics, particularly coal and mining, to green technology and manufacturing.
Thirdly, fostering professional and effective bureaucratic institutions necessitates the establishment of the Ministry of Climate Change and Environment and the Ministry of Natural Resources and Renewable Commodities. These ministries will lead efforts on climate change and sustainable management of natural resources.
Palm oil serves as a successful example of transforming from a raw export commodity to value-added derivative products, achieved with minimal government intervention and supportive policies. This model should be replicated across other commodities, including mining. Initiatives such as developing smelters and batteries for electric vehicles, and providing incentives for their adoption, are critical steps forward.
Continued efforts should focus on building a supportive infrastructure ecosystem to sustain these initiatives and promote broader economic transformation.
Until now, two main products, such as, coal and palm oil would become the main motors of economic progress and turnover of exports for the country. In 2023, coal and palm oil contributed 14 percent and 12 percent for each to the export turnover. Palm oil is taken as sustainable and renewable but is still taken as controversy because of its impact for the environment.
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The government should introduce innovative ways and the alternatives to balance economic contribution by minimizing the environmental impacts. Meanwhile, the dependence on coal should get solution by implementing the principle “polluters pay principle” that obliges those in charge on pollution or carbon emission to pay or deliver compensation that causes carbon or damage the natural environment. In carbon taxes, the government should encourage the mining companies to invest in environmental initiatives both in natural – base and technology – base.
The companies should cooperate with conservation or social forestry organizations. They have to invest in sustainable cultivation and apply natural process to solve the social and environmental issues. With the collaboration with technology solution providers, such as, research institutions or pre-commercial startup companies, the coal companies can invest in renewable energy, reduce carbon capture or capture projects and carbon storage to balance carbon emission and become carbon neutral and encourage domestic sector in technology to be the pilot project – phase in the same time.
These would accelerate the transition from the economy in commodity – base particularly coal and mining, to the environmental technology and manufacturer. On the other hand, palm oil has successfully developed from raw material export to be additional value – side products, contributed about 90 percent of the total exports. This is the model to transform industry by involving the government minimally but supported by the supporting policies.
Palm oil itself got more diversification in food products, fuel, and personal care products as its downstream industries developed. Meanwhile the challenges are the limited materials and tend to be stagnant because of political situation and market standards. The government should answer these challenges by doubling the productivity and supporting palm oil plantation expansion within sustainability standard. The increasing population and middle – class economy should expand the markets nationally. On the other hand, the alternative natural resources get more limited and Indonesia has no capital needed to maintain economic progress without the contribution from commodity sectors.
The government needs to re-consider the national – scale commitment to get emission reduction target in Nationally Determined Contribution (NDC) in 2030 compared to the 2009 baseline, which was 31 percent with its own efforts and 43 percent with the international – scale helps. In nowadays condition, we should not hope the international – scale helps because energy transition partnership did not keep its commitment.
That is why the strategies to get emission reduction and transition should get clarification through the agreement with many countries. The government should advocate common but differentiated responsibilities (CBDR) United Nations Framework Convention on Climate Change (UNFCCC) both internally with the countries and globally to promote climate change and fair trade. Energy transition and electric vehicles should go do but the ways to get scientific support to formulate emission calculation method and carbon absorption needs to be done.
It needs to continue bureaucracy and institution reformation. The first is by formulating the central government institutions which are right with the program needs. Knowing the urgency from every available issue, it would be very important for the new government to re-structure its authority and function of some ministries to facilitate the smoothness of sustainable natural resource as same as the sustainable development goals (SDGs).
The authority on everything that has something to do with land should be trusted on to one ministry, which is, Ministry of Agrarian Affairs and Spatial, which is the perfect of National Land Agency nowadays. This ministry should be in charge on managing every land allocation and spatial plans for every mainland including forests and non – forests.
Ministry of Climate Change and Environment should be established to lead the management of climate change action plans and the implementation as the way to fulfill green-house as emission reduction target that would cover conventional ways in land, water, and natural conservation management sustainably and new ways, such as, encouraging investment in climate change mitigation with technology – base solution.
The new cabinet should have the new portfolio, which is, Ministry of Natural Resource and Renewable Commodity that would be in charge to reulate and manage plantation industries, such as, palm oil, rubber, industrial plant forests, and renewable energy. This could imitate the successful stories in Malaysia that manage the main forest products that support economic progress.
The new government needs to have re-organize sustainable development strategies massively. To develop expert cabinet, focus on three strategic goals, replicate the successful stories of palm oil, reinforce its national – scale commitment to get emission reduction, advocate CBDR UNFCCC principles, and continue energy transition and electric vehicle (industries) would be crucial to do to realize Indonesia Emas 2045. (*)
By: Edi Suhardi/Sustainability Analyst
