In 2017, Indonesia announced its goal of integrating low-carbon, green growth into its national development strategy. To support this effort, WRI led a research consortium to explore the potential of low-carbon development, resulting in the central positioning of green growth in Indonesia''s national development plan for 2020-2024.
Indonesia, the world''s fourth-most populous country, has achieved impressive economic growth, with per capita GDP rising from $800 in 2000 to nearly $4,000 in 2018. However, this has come at a cost, with unsustainable levels of resource extraction, a surge in motor vehicle traffic and heavy reliance on coal-burning, which contributes to air pollution-related diseases suffered by nearly 60% of Jakarta residents. Sustainable development in Indonesia will require a low-carbon pathway that can drive growth while enhancing health, welfare, and climate resilience.
In 2017, the Ministry of National Development Planning (BAPPENAS) launched the Low Carbon Development Initiative (LCDI) to put low-carbon development at the core of Indonesia''s next five-year development plan. The government invited the New Climate Economy (NCE), for which WRI is the managing partner, and WRI Indonesia to support it on LCDI. NCE and WRI Indonesia coordinated with a research consortium of international and local partners to support BAPPENAS in developing thematic studies and an overall report.
Millions of people depend heavily on Indonesia''s rich natural resources for food, shelter, water, energy, and jobs. However, climate change is endangering Indonesia''s sustainable development progress by increasing the frequency and severity of hazards, including cyclones, floods, landslides, droughts, and earthquakes. The United States Agency for International Development (USAID) partners with the Government of Indonesia (GOI) to strengthen the resilience of populations, their communities and economies, and the ecosystems that support people''s livelihoods.
USAID works on shared environmental priorities: improving natural resources management; accelerating Indonesia''s energy transition towards a clean future through reliable and sustainable energy; increasing access to safe drinking water, sanitation, and hygiene (WASH) for the urban poor; enhancing natural resource management by working with businesses, farmers, and fishers to adopt sustainable practices; and combating ocean plastic pollution through improved urban waste management.
The Indonesian government and private sector have set clear decarbonization targets to realize its net-zero ambition. These include achieving 100 percent electric-vehicle adoption by 2050, ensuring that 70 percent of the power generation mix is renewable energy, and that 30 percent of emissions from industrial activities are covered by carbon capture, utilization, and storage (CCUS).
To support these efforts, McKinsey recently launched the McKinsey Platform for Climate Technologies (MPCT) Indonesia at their B20 summit "Leaders'' Breakfast" event. The platform helps clients develop sustainable technologies to transform carbon-intensive products, systems, and services.
MPCT Indonesia has adopted a four-part mission: first, to support decarbonization strategies to reduce emissions by 50 percent and help the country achieve its NDC target; second, to help build and grow the next ten green business unicorns in Indonesia; third, to establish a network of business leaders and policy makers who are committed to Indonesia''s sustainable growth and decarbonization; and, finally, to identify and upskill thousands of change agents to lead sustainability across organizations and sectors.
MPCT Indonesia is an exciting, innovative step for McKinsey Sustainability. By partnering with leaders in these high-impact sectors to build and scale sustainable businesses, the platform aims be a powerful force for decarbonization in the private sector, while supporting Indonesia as it establishes a model of sustainable, inclusive growth for the rest of the world to follow.
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