Powering Prosperity: A framework for a fair and inclusive energy transition in Indonesia

Overview

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Powering Prosperity: A framework for a fair and inclusive energy transition in Indonesia is a report from the Centre for Policy Development that addresses Indonesia’s energy transition and the often overlooked social and human dimensions of decarbonisation and moving away from fossil fuels.

Drawing on lessons from Australia’s energy transition and extensive research across Indonesia, the report offers a practical framework to guide a just transition in Indonesia—one that not only reduces emissions but drives economic opportunity, protects the most vulnerable, and ensures all Indonesians can benefit from the shift to a low-emissions economy.

The framework is built on three key principles that, taken together, support the whole-of-society approach needed to build lasting support, deliver social benefits and economic growth, and make the transition not only possible but beneficial for all.

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Powering Prosperity is a report from the Centre for Policy Development that provides a practical framework to guide a fair and just transition in Indonesia.

What is the report about?

Powering Prosperity explores not only why Indonesia’s energy transition is essential—but why making it a just transition is even more critical. By analysing the current landscape and the scale of the challenge ahead, the report argues that without a clear commitment to fairness, equality, and a strategy to ensure no one is left worse off, the transition risks deepening inequality, fuelling social unrest, and failing to secure public support.

The report examines the risks and opportunities facing three key groups—regions, households, and workers—and outlines what’s needed to ensure they are supported through the transition.

It also provides practical case studies showing how the framework can be applied in three high-impact areas: expanding access to renewable energy in remote communities, developing Indonesia’s critical minerals and EV battery industries, and phasing out coal-fired power plants.

What does the report recommend?

Powering Prosperity’s just transition framework outlines three core principles to guide a fair energy transition in Indonesia:

  1. Enable those affected by the transition to have a voice and access to choices: A just transition requires those most affected—households, workers, and communities—to help shape decisions, ensuring policies reflect local needs, build trust, and drive lasting change.
  2. Ensure those who face vulnerability are not made worse off: Without deliberate support, vulnerable groups risk bearing the brunt of the transition—so policies must ensure access to affordable energy, protect livelihoods, and provide pathways to new opportunities through training and social protection.
  3. Ensure the benefits and costs of the transition are shared equitably: The transition must ensure that both the costs and benefits are shared fairly—across society and generations—so that no group is left bearing an unequal burden today or tomorrow.

The framework should be applied to all aspects of Indonesia’s energy transition to ensure it is effective and sustainable.

The report also provides practical recommendations, steps the Indonesian government can take now to support the implementation of the just transition framework:

  • Embed just transition principles across all high level regulations in Indonesia to ensure a whole-of-government approach is taken and that all parts of government are working towards a low emissions future.
  • Take an ‘Impact First Approach’ to project planning by reversing the traditional planning approach to start with considering social and human aspects before the financial and technology considerations of green projects. 
  • Develop ‘social and human aspects roadmaps’ to accompany major financial and technical milestones and net zero commitments, laying out important considerations beyond financial and technical priorities.
  • Establish a coordinating body within government that brings together all relevant stakeholders for the just transition to ensure efforts are coherent, coordinated and well-integrated.

Why does this matter?

Indonesia is on track to become one of the world’s largest economies by 2040—but its growth has relied heavily on emissions-intensive industries. As climate change poses mounting risks and the world moves away from fossil fuels, Indonesia must decarbonise to stay competitive.

The government has set ambitious climate targets, including phasing out coal and reaching net zero by 2060—offering a chance to lead in green technology and unlock new economic opportunities. But success will require more than hitting emissions goals; it must be a just transition that supports all affected communities—fossil fuel workers, farmers, households and regions alike.

With the right approach, Indonesia can lift living standards, grow its economy, and lead the world in building a fair, inclusive path to net zero.

In the media

Transisi dari energi fosil ke terbarukan semakin relevan di tengah perubahan iklim yang semakin nyata.
Indonesia's energy transition will shape regional prosperity and global emissions.
A new report from the Centre for Policy Development, Powering Prosperity, lays out a practical framework to guide a just energy transition in Indonesia

About the authors

Mara Hammerle

Dr Mara Hammerle is senior policy adviser for the Just Transition focus area at the Centre for Policy Development

Ruddy Gobel

Ruddy Gobel is Senor Policy Adviser for the Just Transition focus area at the Centre for Policy Development

Caitlin McCaffrie

Caitlin McCaffrie is policy director for the Forced Migration and Just Transition Indonesia focus areas at the Centre for Policy Development

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