Paris Agreement, US and Us

The United States (US) has withdrawn from the Paris Agreement. This is the third time the US has withdrawn from an international climate agreement.

However, this is the first time that the US has withdrawn from a climate agreement that has made the Indonesian government consider its participation in the agreement.

Minister of Energy and Mineral Resources Bahlil Lahadalia questioned why Indonesia continues to participate in the Paris Agreement (PA) if the United States does not. Special Envoy who is also the brother of President Prabowo, Hashim Djojohadikusumo, even stated that the PA is no longer relevant for Indonesia.

It is somewhat strange to question the relevance of PA for Indonesia, at a time when many places are being hit by extraordinary hydroclimatic disasters almost simultaneously. Although PA may not be perfect, it is an important step in global cooperation in facing the increasingly severe climate crisis.

Throughout history, the United States has indeed never wanted to bind itself to any international agreement, with a few exceptions. Its foreign mandate is too narrow to negotiate too much. For example, the United States has never, and remains the only country that has not signed the Convention on Biological Diversity (UNCBD).

That the US signed and eventually ratified the PA is actually an exception rather than the rule.

It is somewhat strange to ask how relevant PA is for Indonesia, at a time when many places are being hit by extraordinary hydroclimate disasters almost simultaneously.

How important is the US?

How important is the US in the PA for Indonesia? Important, but not extremely so. In 2023, the US contributed 5.9 billion tons (gigatons/GT) of CO2 emissions, about 12.6 percent of the world's emissions, below China (14 GT, 32.9 percent) as the largest emitter currently.

Despite its size and still ranking second in the world, US emissions have actually declined from 7 GT in 2000. The US has been outside the PA for four of the 13 years between 2010 and 2023 (2016-2020). The US can only leave the PA through a four-year exit process (2016-2020), during which Trump’s term US emissions dropped from 6.1 GT to 5.6 GT.

Four months after the US officially withdrew, President Biden re-entered the US into the PA in 2021. Emissions from 2020-2023 actually increased from 5.6 GT to 5.9 GT.

When the US withdrew from the PA, China and the European Union immediately took over global climate leadership quite aggressively. China is still the world's largest source of emissions today, but as a country, China in 2024 has actually achieved the renewable energy targets that were supposed to be reached in 2030. Six years ahead of schedule, and has installed the most solar and wind power plants in the world.

China's emissions increased by an average of 7.4 percent per year from 2000 to 2011, but slowed to 1.6 percent per year from 2011 to 2023. So, regardless of the US's comings and goings in the global climate agreements, the economics show that renewable energy has significantly outpaced fossil energy. Last year, 30 percent of the world's electricity generation capacity was renewable.

Indonesia actually has its own domestic reasons to continue the transition to renewable energy from an energy system that is one of the dirtiest in the world and remains within the PA.

Currently, coal still controls two-thirds of Indonesia's electricity sources, with three-quarters of it in Java, Indonesia's most populous island. With 20 coal-fired power plants around it, Jakarta is one of the cities with the dirtiest air in the world, and has been the dirtiest. This alone is a strong reason to stop relying on coal.

Indonesia will also be left out of the potential benefits of carbon trading, which, if implemented as part of a compliance market, would be far greater than what is currently done voluntarily. If well designed, this compliance carbon market could be used for the energy transition.

Indonesia also meets more than half of the world's nickel supply. Nickel is a critical mineral that is urgently needed by the world to transition to clean energy, especially as a raw material for batteries for electronic equipment, electric vehicles, and intermittent renewable power plants. Weakening global commitment to the energy transition will also weaken demand for critical minerals.

Unstoppable

Our study using a system dynamic model shows that the transition to clean energy will benefit the Indonesian economy. It does require additional investment, but this is investment, not voluntary donation.

So, it will provide a return on investment. With additional investment in labor-intensive green energy, more jobs will be created, more poverty will be alleviated, and higher economic growth will be generated.

Another reason to stay in the PA is that it is not just about mitigation—reducing emissions—but also adaptation—managing the impacts of climate change itself. The PA is making countries around the world, developed and developing, commit their best to avoid a major climate disaster.

The PA aims to keep global warming to well below 2 degrees Celsius, and preferably no higher than 1.5 degrees Celsius. Last year, the global average temperature exceeded 1.5 degrees Celsius for the first time.

In the current situation of sharpening world geopolitical-economic tensions, especially with the implementation of tariffs on international trade by the US to several countries including China, and the US's withdrawal from the PA, it would be unwise for Indonesia to ignore the PA and get dragged into the "drum" played by the US.

Some analysts even point out that the energy transition is already unstoppable.  The economy has taken over the leadership.  The current leadership of Europe and China has strengthened and accelerated it.

As a big country, Indonesia can actually be an effective mediator. Going along with the US will actually create a lose-lose situation.

Indonesia can actually work together with other progressive countries. The US exit from the PA will be a bit of a challenge for the world, but it will not make it irrelevant.

We have had climate agreements that have worked without the US. We have been a leader that developing countries can count on and rely on. We have been there and come out of it well.

Agus Sari, Environmental Observer. Landscape Indonesia's Chief Executive Officer