COAL PHASE-OUT: SOCIOECONOMIC IMPACT IN ACHIEVING JUST ENERGY TRANSITION IN INDONESIA

Arnita Rishanty, Donni Anugrah and Dian Rahmawati
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Dian Rahmawati: Bank Indonesia

No WP/04/2023, Working Papers from Bank Indonesia

Abstract: This research is to explore socio-economic impact of energy transitions of coal phasing out in Indonesia, a rich resource developing country. First, we measure and analyze the potential transition risks faced in the future particularly from the decline of the coal industry using granular mining companies’ data in Indonesia. Second, we explore qualitatively the preparedness of stakeholders including workers in facing the coal phase-out to achieve just transition. This study finds that assuming current policies surrounding domestic coal pricing in Indonesia persist, fewer coal mines will be economically viable in a global transition and will be forced to shut down. The financial consequences will be borne by the government, coal mining companies and the coal supply chain. This study also finds that job losses in the coal mining sector could be severe. This signifies the role of banks (hence, central bank) to finance local economic transitions and to support the regional sectoral rebalancing (a shift from coal-producing communities to a more inclusive sector such as service or trade sectors).

Keywords: Product Just Transition; Transition Risk; Socioeconomic Impact; Indonesia (search for similar items in EconPapers)
JEL-codes: J68 L72 Q43 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2023
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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http://publication-bi.org/repec/idn/wpaper/WP042023.pdf First version, 2023 (application/pdf)

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