In August 2023, Jakarta briefly became a symbol of what happens when governments ignore environmental warning signs for too long.
town RANKING among the most polluted countries in the world. Activities adapted from the school. Some offices required employees to work from home. Parents worried about their children getting outside air. Masks returned, not because of a pandemic, but because the air itself had become a threat to public health.
Many Indonesians treated the episode as an unfortunate seasonal event, but it was really a preview. The weathermen are now WARNING! that a new super El Niño could emerge, bringing hotter temperatures, longer dry seasons and worsening air quality to large parts of Indonesia.
Combined with the accelerating climate crisis, it could produce an air pollution emergency far worse than what Jakarta experienced three years ago. This time, however, the consequences may go beyond public health. They can turn into an economic and political crisis.
Indonesia’s weakness is not simply a result of the weather. It is the result of policy choices. Although the country talks about the energy transition, coal remains deeply embedded in its development strategy. The government’s latest electricity plan yet It includes 6.3 gigawatts of additional coal-fired power generation by 2034.
At the same time, industrial parks associated with nickel processing continue to rely heavily on coal-fired power plants. evaluations suggest that the capacity of coal captured in the service of industrial activities has expanded rapidly alongside Indonesia’s downstream mineral ambitions.
or joint study by the Center for Economic and Legal Studies and the Center for Energy and Clean Air Research found that air pollution related to Indonesia’s coal-fired nickel industry could contribute to more than 3,800 premature deaths each year in the near term and nearly 5,000 deaths annually by 2030.
The economic burden could rise from roughly $2.63 billion a year to $3.42 billion by the end of the decade, the same joint study said.
These figures often feel abstract because they are presented as environmental externalities. However, air pollution is not an externality when workers get sick, children miss school, and hospitals are filled with patients suffering from respiratory diseases. It is a direct economic cost.
This is the lesson that policymakers failed to learn during Jakarta’s pollution crisis.
In 2023, public debate focused much in identifying the source of pollution. Government officials often downplayed the contribution of nearby coal plants. Even as discussions emerged of temporarily reducing operations at some facilities, authorities largely defended coal production as necessary.
The preferred solutions were technological fixes, such as emission control devices and biomass co-firing. Meanwhile, many coal plants received operational lifelines that could extend their use for a decade or more.
These measures may reduce emissions at the border, but they do not solve the underlying problem. Indonesia is still choosing to protect aging coal assets even as cleaner alternatives become more affordable every year.
The danger is that a super El Niño would expose the true cost of this decision. Unlike 2023, Indonesia now faces broader economic pressures. The rupiah remains vulnerable to global financial uncertainty. High interest rates continue to affect households and businesses. Living expenses remain a concern for many families.
Add prolonged air pollution to the mix and the consequences become more serious. Workers lose productive hours. External economic activity slows down. Health care costs rise. Transport and logistics become less efficient. Economic losses from polluted air are beginning to spread throughout the wider economy.
At some point, protecting coal becomes more expensive than replacing it. Indonesia already has many of the tools needed to avoid that outcome.
First, the coal retirement must move from planning documents to actual implementation. This includes not only grid-connected coal plants, but also closed coal facilities operating in industrial parks.
Second, the deployment of renewable energy must be accelerated. Solar, wind and hydro are no longer separate technologies. They are increasingly the cheapest sources of new electricity in many parts of the world. Battery energy storage systems can address concerns about outages and help stabilize the electricity supply.
Third, industrial parks that process nickel must be connected to cleaner energy sources. Sulawesi possesses significant hydropower potential that can support industrial demand. Industrial operators should be encouraged, and where necessary, to replace captive coal generation with renewable electricity and energy storage solutions.
Indonesia’s air pollution problem is often discussed as a seasonal concern. This view is becoming dangerously outdated.
A future super El Niño could transform polluted air from an environmental issue into a full-scale economic challenge. The climate crisis is increasing the likelihood of extreme weather. Dependence on coal is making the consequences worse.
The choice facing Indonesia is no longer between economic growth and cleaner air. It’s between paying for the energy transition today or paying a much bigger pollution bill tomorrow.
