Indef: Technology Sector Can Potentially Trigger Indonesia's 'Greenflation'

JAKARTA - Researcher from the Center of Food, Energy and Sustainable Development Indef Dhenny Yuartha assessed that the technology sector for the transition to New and Renewable Energy (EBT) has the potential to trigger 'greenflation' or green inflation in Indonesia.

This is because one of the efforts to switch to EBT is to apply Solar Power Plants (PLTS), but many components of PLTS still come from abroad.

"Maybe this greenflation will emerge from technological items such as solar panels. We are still importing this solar panel for these technologies," said Dhenny in a public discussion on 'Indef Response to Fourth Debate' in Jakarta, quoted from Antara, Monday, January 22.

Not only PLTS, the use of other technologies related to the EBT transition in Indonesia still relies on imported components. This will have an impact on inflation considering that Indonesia still imposes a fairly high import rate for environmentally friendly goods or technology.

The green inflation in question refers to the increase in environmentally friendly goods caused by the green transition effort.

The term green inflation was widely discussed by the public after the candidate for vice president (cawapres) number 2 Gibran Rakabuming Raka asked the strategy to overcome green inflation to vice presidential candidate number 3, Mahfud Md during the fourth debate of the 2024 presidential election at JCC, Senayan, Jakarta, Sunday night (21/1)

However, Dhenny assessed that green inflation in Indonesia is currently not an issue that needs to be feared considering that the determination of Indonesia's energy transition target is still not optimal.

"But if we look at the target (Indonesian energy transition), it's actually not too ambitious. The renewable energy target. So the greenflation has not actually become an issue for cases in Indonesia," he explained.

In addition, Gibran's vice presidential action in providing examples of the yellow vest demonstration or 'The Yellow Vest Movement' in France is also considered irrelevant to Indonesia.

This is because France is a country that is prone to triggering green inflation because it does not have many EBT sources in carrying out the energy transition. Followed by climate factors that will impact changes in the prices of goods.

"Like France, which was mentioned last night, there was a yellow vest demo. This is a different case, because in France they don't have enough resources, to make shifting to renewable energy," said Dhenny.