In August 2023, Jakarta briefly became a symbol of what happens when governments ignore environmental warning signs for too long.
The city ranked among the most polluted places in the world. Schools adjusted activities. Some offices asked employees to work from home. Parents worried about their children breathing outdoor air. Masks returned, not because of a pandemic, but because the air itself had become a public health threat.
Many Indonesians treated the episode as an unfortunate seasonal event, but it was really a preview. Meteorologists are now warning that a new super El Niño could emerge, bringing hotter temperatures, longer dry seasons and worsening air quality across large parts of Indonesia.
Combined with the accelerating climate crisis, it could produce an air pollution emergency far more severe than the one Jakarta experienced three years ago. This time, however, the consequences may extend well beyond public health. They could become an economic and political crisis.
Indonesia’s vulnerability is not simply the result of weather. It is the result of policy choices. Even as the country talks about energy transition, coal remains deeply embedded in its development strategy. The government’s latest electricity plan still includes 6.3 gigawatts of additional coal-fired power generation through 2034.
At the same time, industrial parks connected to nickel processing continue to rely heavily on captive coal power plants. Estimates suggest that captive coal capacity serving industrial activities has expanded rapidly alongside Indonesia’s downstream mineral ambitions.
A joint study by the Center of Economic and Law Studies and the Centre for Research on Energy and Clean Air found that air pollution associated with Indonesia’s coal-powered nickel industry could contribute to more than 3,800 premature deaths annually in the near term and nearly 5,000 deaths per year by 2030.
The economic burden could rise from approximately US$2.63 billion annually to $3.42 billion by the end of the decade, the same joint study said.
These figures often feel abstract because they are presented as environmental externalities. Yet air pollution is not an externality when workers become sick, children miss school and hospitals fill with patients suffering respiratory illnesses. It is a direct economic cost.
That is the lesson policymakers failed to absorb during Jakarta’s pollution crisis.
In 2023, public debate focused heavily on identifying the source of pollution. Government officials often downplayed the contribution of nearby coal plants. Even when discussions emerged about temporarily reducing operations at some facilities, authorities largely defended coal generation as indispensable.
The preferred solutions were technological fixes, such as emission-control equipment and biomass co-firing. Meanwhile, many coal plants received operational lifelines that could extend their use for another decade or more.
Those measures may reduce emissions at the margins, but they do not solve the underlying problem. Indonesia is still choosing to defend aging coal assets even as cleaner alternatives become more affordable each year.
The danger is that a super El Niño would expose the true cost of that decision. Unlike in 2023, Indonesia now faces broader economic pressures. The rupiah remains vulnerable to global financial uncertainty. Higher interest rates continue to affect households and businesses. Living costs remain a concern for many families.
Add prolonged air pollution to that mix, and the consequences become more serious. Workers lose productive hours. Outdoor economic activity slows. Healthcare expenses rise. Transportation and logistics become less efficient. The economic losses from polluted air are beginning to spread throughout the wider economy.
At some point, defending coal becomes more expensive than replacing it. Indonesia already has many of the tools needed to avoid that outcome.
First, coal retirement must move from planning documents to actual implementation. This includes not only grid-connected coal plants but also captive coal facilities operating in industrial parks.
Second, renewable energy deployment must accelerate. Solar, wind and hydropower are no longer niche technologies. They are increasingly the cheapest sources of new electricity in many parts of the world. Battery energy storage systems can address concerns about intermittency and help stabilize the electricity supply.
Third, industrial parks that process nickel should be connected to cleaner power sources. Sulawesi possesses significant hydropower potential that can support industrial demand. Industrial operators should be encouraged, and where necessary required, to replace captive coal generation with renewable electricity and energy storage solutions.
Indonesia’s air pollution problem is often discussed as a seasonal inconvenience. That view is becoming dangerously outdated.
A future super El Niño could transform dirty air from an environmental issue into a full-scale economic challenge. The climate crisis is increasing the likelihood of extreme weather. Coal dependence is making the consequences more severe.
The choice facing Indonesia is no longer between economic growth and cleaner air. It is between paying for the energy transition today or paying a much larger bill for pollution tomorrow.
