Leveraging Fiscal Stimulus to Improve Energy Transition: Case of South Korea and Indonesia

This report analyzes the role of COVID-19 fiscal stimulus packages in South Korea and Indonesia, evaluating how these recovery efforts align with each country's energy transition goals. While South Korea has integrated climate challenges into its recovery via the Green New Deal, Indonesia's National Economic Recovery program focuses primarily on short-term social and economic survival with minimal allocation to the energy transition.

• South Korea and Indonesia experienced similar electricity consumption patterns during the first half of 2020, with declines in industrial and commercial sectors and increases in residential demand. South Korea's consumption fell by 2.8% from January to July 2020, while Indonesia's fell by 7.06% from January to June 2020. Conversely, residential demand rose by 5.5% in South Korea and 10% in Indonesia.
• South Korea has leveraged its economic recovery to address climate goals through the Green New Deal (GND), part of a larger USD 238 billion stimulus package. The GND focuses on three areas: greening buildings and infrastructure, expanding low-carbon and distributed energy, and green industrial innovation. However, the GND lacks specific emission reduction targets and timelines, and 42% of its success depends on mobilizing private investments, which is currently hindered by unfavorable market policies.
• Indonesia's National Economic Recovery (PEN) program, totaling USD 49 billion, focuses on social protection and business incentives rather than a green recovery. Only 0.9% of the total PEN budget is allocated to the energy transition. While the program provides some subsidies for small and medium enterprises (SMEs) and consumers, the 2021 fiscal stimulus saw a 15.7% decline in the budget for business and tax incentive programs, limiting support for small renewable energy businesses.
• Both countries have established renewable energy targets: South Korea aims for a 20% share of renewable electricity production by 2030 and 30-35% by 2040, while Indonesia targets a 23% national renewable energy share by 2025.

APA

Climate Policy Initiative (2021). Leveraging Fiscal Stimulus to Improve Energy Transition: Case of South Korea and Indonesia. https://www.climatepolicyinitiative.org/publication/leveraging-fiscal-stimulus-to-improve-energy-transition-case-of-south-korea-and-indonesia/

Chicago

Climate Policy Initiative. Leveraging Fiscal Stimulus to Improve Energy Transition: Case of South Korea and Indonesia. 2021. https://www.climatepolicyinitiative.org/publication/leveraging-fiscal-stimulus-to-improve-energy-transition-case-of-south-korea-and-indonesia/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Leveraging Fiscal Stimulus to Improve Energy Transition: Case of South Korea and Indonesia |date=31 May 2021 |url=https://www.climatepolicyinitiative.org/publication/leveraging-fiscal-stimulus-to-improve-energy-transition-case-of-south-korea-and-indonesia/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021leveraging, author = {{Climate Policy Initiative}}, title = {{Leveraging Fiscal Stimulus to Improve Energy Transition: Case of South Korea and Indonesia}}, institution = {Climate Policy Initiative}, year = {2021}, month = may, url = {https://www.climatepolicyinitiative.org/publication/leveraging-fiscal-stimulus-to-improve-energy-transition-case-of-south-korea-and-indonesia/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }