Indonesia and the Global Coal Conundrum

By Ken Shotts, Sheila Melvin
2023 | Case No. ETH35 | Length 16 pgs.
This case is intended for use in a business ethics course. In 2022, Indonesia was one of the world’s largest coal producers and exporters. Its use of coal-fired power plants contributed to its position as the world’s ninth largest emitter of CO2 in 2021. But Indonesia was also a signatory to the 2015 Paris Agreement and had pledged to significantly cut emissions by 2030 and reach net-zero by 2060. To help with this process, Indonesia entered a Just Energy Transition Partnership (JETP) in 2022. Under the terms of the JETP, Indonesia would receive $20 billion in grants, loans, and private investments in exchange for curtailing its use of coal, increasing its use of renewables, and cutting emissions earlier than expected. In 2023, many terms of the JETP remained unfulfilled and debate had arisen as to whether Indonesia would —or should —wean itself from coal.

Learning Objective

This case focuses on the ethical consequences of using coal in the context of Indonesia. It further explores the debate over the responsibility of developed nations to help developing nations wean themselves from fossil fuels like coal and of banks to lend – or not – to coal-related projects.
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