Employment Impacts of Energy Transition in Indonesia
Indonesia's ambitious decarbonization targets are projected to impact employment in the power and automotive sectors significantly. A study analyzing three decarbonization scenarios for 2020–2050 indicates that aligning the electricity sector with the Paris Agreement could generate 5.86 million direct job-years, surpassing the business-as-usual scenario by 2.67 million.
Solar photovoltaic projects primarily drive this job growth, despite anticipated job losses from coal plant retirements. The majority of these positions are expected during the construction and installation phases. Overall, the energy transition could result in net job creation, encompassing direct, indirect, and induced impacts, ranging from 7.07 million to 12.17 million job-years by 2050.
Conversely, the shift from internal combustion engine vehicles to electric vehicles may lead to net job losses due to decreased demand for traditional manufacturing roles and increased need for workers skilled in automation technologies. Policymakers are advised to invest in human capital through targeted training and certification programs and to promote stakeholder collaboration to effectively manage labor market transitions during this period.