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☀️💨 When we discuss climate change, conversations tend to center around specific technologies like solar photovoltaic and wind turbines, conserving nature to prevent deforestation, or financial innovations like carbon credits. However, an important topic that underlies all of this is the justice component.

🪧 Climate change is indeed deeply intertwined with issues of social, racial and environmental justice; the University of California system literally has a research center that’s dedicated to this.

❓ So how exactly does climate justice come into play?

🔥 A clear example of this is the recent landfill fire in Bali’s TPA Suwung, which burned for around a month during last year’s dry season and threatened the health of primarily impoverished trash picker communities, with around 200 families directly affected (Now Bali, 2023).

📊 Generally speaking, lower income populations tend to bear the brunt of climate and environmental issues while higher income populations tend to have a much higher carbon footprint. Check out the chart below to see just how strongly correlated gross domestic product (GDP) per capita (x-axis) is correlated with carbon dioxide (CO₂) emissions per capita (y-axis).

💰 Fortunately, in the last COP (COP28 in Dubai) there was recognition of the importance of a “loss and damage fund” which is meant to support lower income countries to deal with the impacts of climate change with funding coming from higher income countries due to their responsibility stemming from historically higher emissions.

🌐 Such arrangements are critical for ensuring climate justice and this is also where the Just Energy Transition Partnerships (JETPs) come in. It’s philosophically similar to the “loss and damage fund” in that funding is coming from wealthier countries and directed towards poorer countries, although in this case the use case is targeting climate mitigation rather than climate adaptation and resilience.

💥 This is indeed a pretty big deal historically, so you could say it’s a Big Deal Energy (BDE)

🤿 Let’s dive in!

🤔 What’s the deal with a Just Energy Transition?

🤝 The JETPs represent political & financial initiatives to address this very issue. The partnerships are between a host developing country and wealthier nations under the International Partners Group (IPG) banner. While the host countries have identified decarbonization commitments as per their Nationally Determined Contributions (NDCs), their growing energy needs also represent the threat of potential increases in greenhouse gas emissions that need to be addressed urgently in order to reach net zero targets.

⚖️ The key thing to highlight here is the just part of of the JETP. There is an implicit understanding in these partnerships that the source of most of historical greenhouse gas (GHG) emissions is from these wealthier countries rather than the hosts. The host countries of course have a right to develop and grow their economies in order to improve their citizens’ standards of living. This dynamic between the global north & global south partnerships is critical in ensuring that the world decarbonizes and within a reasonable timeframe.

🌏 So far, four countries–including 2 in Southeast Asia–have signed JETP deals: South Africa, Indonesia, Vietnam, and Senegal.

🥇 The first JETP deal was announced in November 2021 at COP26 for South Africa, in partnership with the UK, EU and US; It pledged $8.5 billion over three to five years to catalyze the transition from coal to renewable power (South Africa Climate Commission, 2022).

🥈 The second JETP deal (and first in ASEAN) was announced about a year later in November 2022 at the G20 Leaders’ Summit in Bali, in partnership with most of the same countries plus Japan. In this case, the amount pledged was over the double the amount for South Africa at $20 billion over the same period. As we mentioned in our previous issue, the funding represents a blended finance arrangement, including a mix of grants, concessional loans, market-rate loans, guarantees, as well as private investments (UNDP, 2023).

🥉 The third JETP deal was announced a mere month after the one for Indonesia, this time in a neighboring ASEAN country: Vietnam. The amount was 22.5% less than Indonesia’s at $15.5 billion, with the same countries involved plus the ADB & IFC also making pledges (Vietnam News, 2022).

🆕 The fourth–and latest–JETP deal was announced in Senegal in June 2023 with an aim to increase the share of electricity generated by renewables to 40% by 2030. An objective that we must add is not without precedent… For instance, a country on the opposite (eastern) end of the Africa continent, Kenya, currently gets around 75% of its energy from renewables sources (IRENA, 2023).

☀️ Yet another ASEAN country is being considered for a JETP deal. Climate Smart Ventures  has conducted an analysis to determine that the Philippines would need around $9 billion in funding to accelerate their transition: “The Philippines has a highly ambitious energy transition goal, with targets to achieve a 50% renewable share of total power generation as early as 2040, and an openness to decommission coal-fired power plants (CFPPs)” (Rockfeller, 2024)

Challenges to scaling the model

While the above are all incredibly promising and progressive steps in the right direction, ensuring the success of these energy transition partnerships is not without its challenges.

1. 🪨 Over-dependence on a heavy political burden for IPG members

2. 💸 Insufficient quantities of truly new and additional concessional finance

3. 🧑🏻‍🦯 Lack of clarity around country demand for future JETPs and no established pathways to access support

4. 😵‍💫 Insufficient access to in-country (or externally provided) technical, planning and modelling capacity

5. ⁉️ Inconsistent, ad-hoc, and unclearly defined role for the Multilateral Development Banks (MBDs)

6. 🏛️ Challenges encountered in the JETP countries themselves when translating JETP investment plans into investable projects, including maintaining political momentum and continued societal buy-in

👊🏻 That being said, Southeast Asian societies (and apparently Tinashe who is pictured in the gif below) aren’t one to shy away from such challenges! Later on in this issue, we have an interview with one such voice who is tackling these aforementioned challenges from the Indonesia JETP perspective.

📚 Want to learn more about this topic?

1. “Scaling the JETP model: prospects & pathways for action” by Rockefeller Foundation & Environmental Defense Fund

2. “Scaling Up to Phase Down: Financing Energy Transition in Developing Countries” by The World Bank

3. “The Managed Phaseout of High-emitting Assets” by GFANZ

🗞️ Recent News

🎙️ Interview with Adhityani of JETP Indonesia

💡 Why were you initially inspired to work on energy transition to begin with?

📝 I had been inspired to work on the climate crisis in 2007, when I was assigned as a junior reporter at Reuters to cover environmental stories leading up to the 2007 13th Conference of Parties of the UNFCCC that took place in Bali.

🌏 For an entire year, I was made to realize that Indonesia has an abundance of energy resources, a potential that could position Indonesia as a global geopolitical power.

⚡ I had then decided that I would focus on the energy question, when focusing on addressing the climate challenge. Energy transition is both a key strategy when addressing Indonesia's rising greenhouse gas emissions, and at the same time, is the answer to Indonesia's quest for growth and prosperity.

🛠️ How exactly is JETP taking action against this?

🤝 JETP is an energy transition financing initiative agreed between Indonesia and 10 donor countries in a group called the International Partners Group (IPG) that is led by the United States and Japan. The initiative has pledged USD 20 billion from public and private finance sources for the purpose of decarbonizing Indonesia’s power sector.

🔌 The power sector is one important piece of the energy transition puzzle - for Indonesia to transition, it must wean off its over reliance on fossil fuels and diversify its energy portfolio. That means an accelerated uptake of renewable energy, facilitated by green enabling grid infrastructure and a phasing down of coal use in power plants.

🏎️ JETP aims to catalyze this process—the funding pledged can only covers one fifth of all investment needs to do this until 2030. So JETP hopes to channel much needed finance into transformative projects, such as the building of transmission infrastructure and dispatchable renewable energy.

😲 What is a surprising fact about the energy transition?

🔫 The biggest misconception about energy transition is the idea of a silver bullet or a singular strategy that can solve the entirety of the energy-climate problem.

📐 Indonesia, in particular, faces a challenging trilemma: It must provide affordable energy to its people to power growth and ensure prosperity, but it also must ensure that the energy provided is secure and, at the same time, environmentally sustainable.

🫕 Therefore, there is no single solution to address this trilemma, rather, Indonesia must opt for a mix of solutions, which would need to include new energy technologies, decarbonization technologies as well as accelerating the update of well known, well proven renewable energy technologies to get the most optimal result for the Indonesian people.

🦸🏻 What do you do when you’re not saving the world?

🏃🏻‍♀️ I love endurance sports and right now I am trying to return to marathon form. I used to run marathons and ultra marathons in my 30s, but after sustaining a number of injuries from a cycling accident and overtraining, the road to returning to marathon fitness has been long and slow.

⏭️ Next week, we’ll be diving deeper into specific technologies towards the clean energy solution

❓ Did you enjoy this week’s issue? If yes, please do forward to your friends who would enjoy the read as well.

📧 Also, feel free to let us know what you thought by giving us feedback at [email protected].

🌊 SEA you next week!

Karina & Massimiliano