Japan, Germany Step Up on Indonesia Climate Deal as US Exits

(Bloomberg) -- Japan’s finance minister confirmed the nation will continue to support Indonesia’s energy transition following the exit of the US from a $20 billion initiative to help one of Asia’s biggest polluters shift away from fossil fuels.

Global backers of Just Energy Transition Partnerships, or JETPs — which also include a roughly $15.5 billion deal for Vietnam and South Africa’s $9.3 billion package — are assessing the financial impacts as US President Donald Trump pulls billions of dollars pledged to climate initiatives. 

Officials confirmed last month that Germany would replace the US as co-leader of work with Indonesia, where scant progress has been made so far to deliver pledged funding, or to resolve challenges with shuttering coal-fired power plants. 

“The US has withdrawn from its role as co-lead of the JETP with Indonesia,” Japan’s Finance Minister Katsunobu Kato told reporters Friday. “Japan will continue to support Indonesia’s efforts towards decarbonization and energy transition, while fulfilling its role together with Germany, which has taken on the co-leadership.”

Major polluters like the US have an obligation to support nations that are vulnerable to climate change, and the US exit from JETP sets a dangerous precedent, said Norly Mercado, Asia regional director at 350.org, a nonprofit that focuses on accelerating renewables development. 

“This should not be used as an excuse for developing nations such as Indonesia and Vietnam to delay their own commitments to phase out coal, and accelerate the shift to cleaner renewable energy sources,” Mercado said. 

Other nations remain committed to the efforts to accelerate decarbonization in some of the world’s most fossil fuel-reliant countries, Rachel Kyte, the UK’s climate envoy, said Thursday in an interview. JETP programs were initially feted as having potential to bring together public and private money and make it economically viable for large developing nations to shift to cleaner power sources.

(Updates with comment from fifth paragraph.)

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