In this webinar, Ms Melinda Martinus, Mr Paul Butarbutar, Ms Nguyen Phuong Mai, and Dr Julia Behrens review the progress of Just Energy Transition Partnership (JETP) policy rollouts in Vietnam and Indonesia.
CLIMATE CHANGE IN SOUTHEAST ASIA PROGRAMME & VIETNAM STUDIES PROGRAMME JOINT WEBINAR
Monday, 4 March 2024 – Ms Melinda Martinus, Lead Researcher with the ASEAN Studies Centre and the Climate Change in Southeast Asia Programme at the ISEAS – Yusof Ishak Institute (ISEAS) in Singapore, along with Mr Paul Butarbutar, Deputy Head of the JETP Indonesia Secretariat, Ms Nguyen Phuong Mai, Vietnam Country Director for The Asia Group based in Hanoi, and Dr Julia Behrens, Postdoctoral Fellow at the Department for Social Anthropology at Bielefeld University, Germany, respectively offered assessments of Indonesia’s Comprehensive Investment and Policy Plan (CIPP) and Vietnam’s Resource Mobilisation Plan (RMP) that aim to implement the goals of the Just Energy Transition Partnership (JETP). The panel also discussed implications, gaps and challenges for both countries as they seek to make a ‘just’ energy transition. The session was moderated by Dr Mirza Huda, Lead Researcher of the Climate Change in Southeast Asia Programme (CCSEAP) at ISEAS.
Ms Melinda Martinus provided an overview of the JETPs and their broad implications for Southeast Asia. Emerging from the 26th Conference of the Parties (COP-26) Summit in 2021, JETPs are the first multilateral climate finance initiative backed by the International Partners Group (IPG). The JETPs are international financial agreements that aim to accelerate energy transition by replacing fossil fuels with renewable energy in emerging economies. Unique to JETP agreements is its strong focus on coal phase-outs, the decentralized country-led style of implementation, the much-needed use of private capital to fill the climate finance gap in developing countries, and its strong emphasis on a ‘just’ energy transition with inclusive outcomes. Elaborating on the specifics of the four currently committed JETPs from South Africa, Indonesia, Vietnam, and Senegal totalling US$ 46.5 billion, Ms Martinus noted the broad diversity of partners involved in Indonesia’s and Vietnam’s IPG, as well as the emphasis on retiring coal-fired power plants, initiatives to increase energy efficiency, and implementing transition technologies like carbon capture in the JETPs. Yet, phasing out coal requires more than just technological solutions and requires an accounting of the complex political-economic landscapes in Southeast Asia.
Ms Martinus expressed optimism about the impact of JETPs, particularly due to the massive scale of financing mechanisms, but she also acknowledged that financing gaps in JETP countries remained large (with a 70% financing gap in Indonesia, and a 89% financing gap in Vietnam), and JETP loans may strain the fiscal capacity of recipient countries. Lastly, Ms Martinus highlighted that the JETPs can provide an additional layer of protection for workers but more can be done to expand these protections to include consumers, incumbent companies, and coal-dependent areas. Concluding her presentation, Ms Martinus noted that international partners and financial institutions have confidence in Southeast Asia’s institutional capacities and market prospects for energy transition, with Vietnam and Indonesia leading the way. The JETP can also be a mechanism for fiscal experimentation and strengthening governance in the region’s energy sector.
Mr Paul Butarbutar shared Indonesia’s JETP experiences. Starting with a discussion of the JETP Indonesia Joint Statement, Mr Butarbutar underlined JETP as an important pathway to reach Indonesia’s ambitious net-zero targets in the power sector and to increase its renewable energy mix. The guiding principles of JETP implementation in Indonesia, as well as the mobilization of capital, were also discussed. Next, the five investment focus areas for Indonesia’s JETP were mentioned, covering transmission and distribution, the phasing out of coal-fired power plants, accelerating both dispatchable and variable renewable energy infrastructure, and the development of renewable energy supply chains. To support the implementation of action items, four working groups have been formed (technical, policy, financing, and just transition), with a fifth (electrification and energy efficiency) to be launched this year.
Mr Butarbutar then elaborated on the coordination of the JETP Secretariat with various stakeholders and government agencies, emphasising the transparent and inclusive nature of the collaboration, and cumulating in the Comprehensive Investment and Policy Plan (CIPP) which is regularly updated to reflect global trends and national priorities. Key deliverables by the four working groups were discussed, along with the required investments to finance them. Mr Butarbutar also explained the technicalities and prioritisation in capital deployment of the US$21.6 billion pledged for JETP Indonesia, along with Indonesia’s Just Transition (JT) framework, which assesses social, economic and environmental impacts with its 9 JT standards. This framework ensures that risks and opportunities presented under JETP investments are addressed and managed and are implemented under two steps: assessment (at the project level) and intervention (at both the project level and national/subnational level).
Ms Nguyen Phuong Mai presented insights on Vietnam’s JETP programme, particularly with respect to the expected outcomes, process, and foreseeable challenges. Starting with an overview of JETP priorities in Vietnam, Ms Phuong Mai talked about the progress that Vietnam has made towards the 8 JETP priorities in recent years. Ms Phuong Mai highlighted the contrast between the expected outcomes and reality, particularly between the strong political commitments towards energy transition, and a delay in comprehensive regulatory reforms.
The lack of significant progress by Vietnam towards approving regulations for enabling LNG-to-power and offshore wind development was also highlighted, which warrants further steps to be taken, particularly on the Eighth Power Development Plan (PDP-8) Implementation Plan focused on political and economic feasibility, and on reducing the use of coal. Lastly, four main policy challenges were discussed: (i) the political and regulatory delays and the impact of Vietnam’s anti-corruption campaign; (ii) technical challenges stemming from the lack of supportive industries and domestic infrastructure in tackling large-scale renewable energy; (iii) economic challenges in creating a complete framework to channel JETP financing to enable returns on investment; and (iv) challenges regarding direction or guidance on implementing Vietnam’s ‘just’ transition.
Dr Julia Behrens explored the topic of just transition in Southeast Asia through a social science lens, focusing on lessons from Vietnam. Starting with the historical background and evolution of just transition in the global north, Dr Julia extends the concept to the specific context of Southeast Asia, with its adapted focus on governmentality and ecological modernisation. Vietnam’s just transition in its coal sector was used to illustrate how the different aspects fit together with the overall puzzle, particularly the reskilling of workers, structural regional changes, early retirement schemes, and worker-trade union participation in the process, which brought about many co-benefits like improved health and environmental restoration.
Dr Julia also further analysed the different aspects of justice within a given framework, noting that both the global North and Vietnam have missed certain key elements of justice in their transition frameworks, before noting the opportunities (e.g., lower emissions, momentum for policy change, and integrating workers’ concerns) and challenges faced by Vietnam. One particular challenge was the redefining and watering down of just transition discourse to only just access and energy affordability in Vietnam, rather than taking a more inclusive scope of justice, which prevents the tackling of systemic issues and risks setting a precedent for future JETP agreements in other developing countries. Lastly, Dr Julia discussed how stakeholders can align their interests in just transition frameworks. She emphasised the need to understand trade-offs, be transparent, and involve the international community to improve fair transitions in developing countries.
During the Q&A session, the panellists addressed questions on the obstacles and resistance to the smooth rollout of JETP, particularly for Indonesia’s new government, how the gap between what is actually required for energy transition and what the JETP provides can be reconciled, and what developments both Vietnam and Indonesia would face in implementing their JETPs. Questions were also raised about whether any qualitative factors could be used to evaluate just transition, what different stakeholders like international partners and civil society play in the just transition process, and what can be done to make it easier for countries to access their JETP funds.
The webinar drew an audience of over 180 participants.
To view the webinar, click here.