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The electricity sector before and after the fast track program

Author

Listed:
  • Maxensius Tri Sambodo

    (Economic Research Centre, Indonesian Institute of Sciences (P2E-LIPI), Jakarta, Indonesia)

  • Tatsuo Oyama

    (National Graduate Institute for Policy Studies (GRIPS),Tokyo, Japan)

Abstract

Underinvestment is a major problem facing Indonesia’s electricity sector after the Asian financial and economic crisis of 1997/98. There are two major issues that will change the structure of Indonesia’s electricity sector. First, the Indonesian government in 2009 issued the Electricity Law No 30/2009. This law adopted the autonomy principle, which meant that the local governments assume the responsibility to build power plants. Second, Indonesia has implemented the ‘Fast Track’ program. This program not only affects the energy mix in the electricity sector, but also the Indonesian government emissions target following the Copenhagen Accord. In a quantitative analysis, we constructed a growth model, diversity index and energy-CO2 converting formula, and a coefficient variation index. This paper offers policy recommendations on how the Indonesian government can pursue sustainable development in dealing with the fast track program and the new institutional setting

Suggested Citation

  • Maxensius Tri Sambodo & Tatsuo Oyama, 2010. "The electricity sector before and after the fast track program," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 58, pages 285-308, December.
    • Handle: RePEc:lpe:efijnl:201014
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    More about this item

    Keywords

    electricity sector; fast track program; autonomy principle; CO2 emissions;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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