Jakarta – The Institute for Essential Services Reform (IESR), in its latest study, found that communities currently living in coal-producing areas will be affected by the energy transition in terms of livelihoods and the regional economy in general.
IESR emphasises the need to mitigate the impact of energy transition in coal-producing areas as a significant focus for the central and regional governments and prioritises aspects of justice in the energy transition process so that people can move from a fossil-based economic system to a sustainable economy.
IESR released a study titled “Just Transition in Indonesia’s Coal Producing Regions, Case Studies Paser and Muara Enim” with case studies in Paser Regency, East Kalimantan Province, and Muara Enim Regency, South Sumatra Province.
IESR Executive Director Fabby Tumiwa said that the government needs to pay attention to the energy transition phenomenon in coal-producing areas to mitigate its impact. Indonesia still has time to prepare for the energy transition process; however, the time is short.
“The region should be ready to transform when the coal industry ends,” Tumiwa said when opening the media dialogue event titled ‘Equitable Transition in Coal Producing Regions in Indonesia: Case Study of Muara Enim Regency and Paser Regency”.
Some of the potentials of the energy transition involve the realisation of not relying solely on one source of regional income, such as the coal sector, and corporate initiatives to diversify business beyond coal and corporate social responsibility (CSR) as a source of funds for community empowerment.
However, some barriers to this potential include limited local government authority, lack of financial capacity, and lack of health and education infrastructure.
“We encourage the central and regional governments to carry out economic transformation by utilising the leading sectors of each coal-producing region. For example, Paser Regency can focus on the education and financial services sector. At the same time, Muara Enim Regency can develop the accommodation and food services sector, which has shown good performance compared to surrounding areas,” added Martha Jesica, Social and Economic Analyst, IESR.
Meanwhile, Rusdian Noor, Secretary of the Regional Development Planning Agency (Bappeda) of Paser Regency, East Kalimantan, added that Paser Regency’s GRDP in 2022 reached 75%, which was used to finance regional development and was mostly contributed by the mining sector. Therefore, energy transition with economic sector diversification must be able to replace the contribution of the mining sector. “So we don’t lose power in implementing development,” he said.
Mat Kasrun, Head of Muara Enim Regency Bappeda, voiced his hope that his party would be involved in every policy-making related to energy transition and gain authority in the development of new and renewable energy. He also hopes to get support from the central government, including flexibility in authority or licensing in the development of new economic sectors in the regions. (Hartatik)
