Alternative
energy, not a subsidy cut,
is
the only remedy
Lim Mei Ming ; A
freelance journalist; Member of green group Sarekat Hijau Indonesia
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JAKARTA
POST, 15 Februari 2015
Finally, President Joko “Jokowi” Widodo has left domestic
fuel prices to international market dynamics after the previous
administration — considering political stability, economic capacity and
social acceptability — set fuel subsidies as high as possible.
To carry out development, every strong nation must
endeavor to attain energy security for both public consumption and national
fuel industries. However, the Indonesian government seems to lack sustainable
strategies for achieving energy security.
While most countries give priority to the fulfillment of
domestic energy demand, Jokowi has followed in the footsteps of his
predecessors, who opted to dedicate energy resources to global commerce.
Trying to awake from the 1998 economic crisis and its
multidimensional impacts, post-reform national leadership has unfortunately been
indecisive in directing national development. The State Policy Guidelines
(GBHN) were removed and the Constitution was amended four times only to erode
Indonesian sovereignty over its natural resources and surrender the national
economy to the market.
It’s impossible, for example, to let the prices of public
goods and services, including public transportation fees, go up and down in
accordance with world fuel-price fluctuations. Even the coordinating economic
minister has warned from the beginning that the country should anticipate the
possibility of living without fuel.
Without easy access to alternative energy, the Cabinet’s
fuel policy is threatening the sustainability of development.
Furthermore, having recognized former president Susilo
Bambang Yudhoyono’s achievements in addressing climate change by raising fuel
prices by 165 percent so as to reduce greenhouse gas emissions from fossil
fuels, fuel consumption has increased more than tenfold since 2003. There has
been no notable effort to make alternative energy sources accessible to all
people, not to mention environmentally friendly.
It’s understood that the Indonesian government wants to
keep the global honor of being part of G-20, consequently binding itself to
the group’s long-standing commitment to phase out fossil-fuel subsidies in
conjunction with the IMF Letter of Intent (LoI) and the World Bank
Development Policy Loan (DPL) prerequisites.
Climate change follows the global scheme, however. Since
the outset, the Organization for Economic Cooperation and Development (OECD)
and its working partner, the International Energy Agency (IEA), have been
focused on renewable energy policies. They say that eliminating fossil-fuel
subsidies by 2020 will cut global warming by 10 percent in 2050.
However, there has been a misunderstanding between the
national living experience and global agencies, such as IEA and World Bank,
who validate such a notion on the pretext that the rich become the
beneficiaries of fuel subsidies.
As a matter of fact, it’s not relevant to classify fuel
consumers as poor or rich. Fuel has become a basic component along the
economic value chain that involves both the rich and the poor in various
synergistic roles. The ultimate consequence of the fuel-price hike is
inflation that upgrades the market equilibrium, forcing the prices of goods
and services to climb. This cannot be compensated by mere cash aid.
Compounded by the G-20 as the ultimate global forum,
fossil-fuel subsidy means inefficiency, wasteful consumption, market distortion,
clean-energy investment impediments and the trivialization of the climate
change issue. The G-20 Summit in Brisbane, with the current slogan of “global
problems need global solutions” might have overwhelmed President Jokowi with
euphoria. Going home, he was convinced of the need to start eliminating
fossil fuel supplies and subsidies.
It’s China that is determined not to follow the global
trend of simply reasoning that expensive fuel will make it difficult for
national development to run. Realizing the consequences, Beijing is
developing renewable energy like solar, wind and biomass. The country
allocates subsidy grants amounting to US$22.5-46.7 million to manufacturers
of wind turbines without imported components.
As a result, its national energy self-sufficiency efforts
make China the largest global wind-energy industry. It’s not money that
matters, but common initiative, commitment, hope and public faith in the
administration.
Indonesia’s distinctiveness as one of the wealthiest
tropical nations must preserve its abundant assets to earn renewable kinds of
organic energy sources. It needs to overhaul spatial planning, reset the
national development priorities from euphoric global achievements to basic
energy security, free household industries from lengthy red tape and promote
autonomous budgetary distribution.
For too long we have neglected our richness in renewable
energy sources. ●
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