The Green Economy Policy in Indonesia, How Much Longer is the Process?

There are many severe challenges that Indonesia will have to face in the coming decades, such as climate change, loss of biodiversity, and rising inequality. This systemic global crisis cannot be handled in isolation as they are interrelated. The problem is our current economic system needs to be better suited to strike a good balance between environmental and social goals.

Economic activities will undoubtedly impact the environment and society if not handled wisely. A new economic vision is needed, such as a green economy, to overcome this problem. What is a green economy, and how far has the process been in Indonesia? Check out this article for more information!

What is a Green Economy?

The economic system we use today has yet to answer the solution to the large and significant negative impacts in the social and environmental context. This is not only caused by greenhouse gases and global warming but also due to the extraction of natural resources such as water, soil, forests, and others. The concept of a green economy has been discussed in the last few decades, one of which was through a report entitled Limits to Growth in 1982 by the Club of Rome.

The green economy can be defined as an alternative vision for growth and development to improve people’s lives in a way consistent with sustainable development. A green economy is essential to promote a more sustainable and low-carbon economy and to ensure that natural assets continue to provide environmental resources and services for sustainable prosperity.

Green Economy Policy in Indonesia

One form of full attention given by the Indonesian government to developing new and renewable energy is through the signing of the Paris Agreement which has been ratified as one of the policies taken by the Indonesian government as a form of global commitment to deal with climate change.

The policy is contained in the Law of the Republic of Indonesia No. 16 of 2016 concerning the Paris Agreement on the United Nations Framework Convention on Climate Change. In addition to the ratification of the law, there are also several other policies taken by the government in dealing with the issue of climate change.

Some of them are described in PP No. 24 of 2021 concerning Procedures for the Implementation of Strategic Environmental Studies and Presidential Decree No. 98 of 2021 concerning the Implementation of Carbon Economic Values ​​for Achieving Nationally Determined Contribution Targets and Control of Greenhouse Gas Emissions in National Development. You can click here for complete information on Indonesian government regulations and policies related to climate change.

The Indonesian government has also determined the green economy plan as one of the critical factors for economic transformation in the medium to long term, which aims to restore the economy due to the Covid-19 pandemic. The green economy is also the focus of Indonesian government policies to support inclusive and sustainable economic development. Implementing the carbon price policy and the carbon tax scheme in 2023 is a form of green economy that Indonesia will carry out.

Green Economy Potential in Indonesia

The green economy concept is suitable for Indonesia because it is part of the stimulus for post-pandemic economic recovery. Applying a green economy can help open up millions of new jobs and professions. The potential for the green economy is also vast, with impacts on various economic sectors, including state revenues. This is inseparable from the significant need for factors that support the running of a green economy to implement development that does not ignore environmental sustainability.

Examples of Application of Green Economy in the World

The transition to a green economy system is a long and complicated process. Even so, some countries can become role models thanks to their strong commitment to implementing green growth concepts or low-carbon economic strategies. It is not difficult to find some success stories from large-scale programs that were able to increase development or productivity sustainably, for example, such as:

●   South Korea

Adopting a national strategy and five-year plan for green growth in 2009-2013, South Korea allocated 2 percent of their gross domestic product to invest in some green sectors, such as renewable energy. The South Korean government has also launched the Global Green Growth Institute (GGGI), which aims to help other countries (especially developing countries) develop green growth strategies.

●   China

China is a country that invests in renewable energy more than any other country. This can be seen from the total installed wind capacity, which grew 64 percent in 2010. China is also the country with the largest solar energy capacity in the world, which is 130 Gigawatts. The International Energy Agency (IEA) even noted that China met its 2020 target of adding solar energy capacity three years earlier.

Well, in Indonesia itself, an example of implementing a green economy can be seen in the Green Growth Program. This program aims to increase the Gross Domestic Product (GDP) and a just and sustainable standard of living. This is done by using resources more efficiently, building clean and resilient infrastructure, reducing pollution, and appreciating natural assets that often cannot be felt economically.

The Green Growth Program also acts as a facilitator that brings together the diverse needs of stakeholders, including governments, national and international investors, and project developers, so that green capital can flow.

It is essential to implement a green economy so that people’s lives can improve through sustainable development that is more environmentally friendly. The Indonesian government has taken several steps to implement a green economy policy, but it still takes a long process to achieve the targets set. Although full of challenges, a green economy is possible to realize.

Read More: The Energy Industry: Types and Examples of Companies

As a business person, you can support the green economy by implementing sustainable and more environmentally friendly policies. However, ensure the policy is in line with the provisions of the green economy in Indonesia.

To achieve this, you can use the services of Skha, who will study your business sector in depth to formulate policies with the highest degree of accuracy. That way, business policies that align with the green economy can be implemented immediately.











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