An environmental activist rings a noisy instrument during a protest against climate change in front of the Arjuna Wijaya horse statue in Central Jakarta on June 4, 2021. (JG Photo/Yudha Baskoro)

Private Sector's Role Pivotal in Achieving Climate Targets

BY :JAYANTY NADA SHOFA

OCTOBER 23, 2021

Jakarta. The Indonesian Chamber of Commerce and Industry, or Kadin, is calling the private sector to start its journey towards becoming net-zero companies to help the government achieve its climate targets.

“As an emitter, the private sector must find a way to contribute to [the climate targets],” Kadin’s renewable energy committee head Muhammad Yusrizki told a conference on Thursday.

Yusrizki feared the non-legally-binding nature of the Paris Agreement might lead to climate free-riders, thus encouraging the more committed countries to use trade instruments. For instance, by imposing tariff or non-tariff barriers, particularly on products with a high carbon footprint.

“So, the threat to our product competitiveness is not just an illusion. This is the only way to avoid free-riders in the context of the Paris Agreement. [...] This calls for a moral movement, which Kadin cannot help but start as the representation of the private sector,” Yusrizki said.

According to Yusrizki, the journey in becoming a net-zero company builds on three scopes. The first scope covers the direct emissions that are under the company’s control, including company vehicles.

Yusrizki suggested companies could try switching to electric vehicles.

“The second scope is the indirect emission that is still under the company’s control, such as purchased electricity. In this case, companies can install rooftop photovoltaic systems. Whereas the third scope encompasses the indirect emissions coming from outside the company’s activities,” Yusrizki said. 

But it is not just the large companies that need to go net zero. The micro, small and medium enterprises (MSMEs) must also do the same, considering how they make up about 99 percent of the business entities in Indonesia, according to Yusrizki.

He also unveiled Kadin’s plan to establish a net-zero hub to nurture more like-minded, climate-conscious companies, including MSMEs. The Kadin net-zero hub will offer tools, insight, and practical guidance, among others.

“Starting with the large companies will hopefully lead to a critical mass, that is followed by the medium-scale [companies] and eventually the MSMEs. Thus, everyone in the ecosystem is moving towards becoming net-zero companies,” he said.

Under its nationally determined contribution (NDC) pledge in the Paris Agreement, Indonesia aims to cut its greenhouse gas emissions by 29 percent on its own or 41 percent with international assistance by 2030. 

The Indonesian government has also set a goal of achieving net-zero emissions by 2060.

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