"The rise in energy prices has made fiscal sustainability harder to maintain," he noted during the 2022 CSIS Global Dialogue virtual event on Wednesday.
"Limited fiscal space makes it hard to invest in handling the climate crisis," he added.
Meanwhile, delay in handling the climate crisis can make the global economy vulnerable to the food and commodity crisis that is headed toward inflation in the future.
Indonesia’s G20 Presidency has made energy transition a priority, with the problems that must be resolved including financing scale and distribution.
There is still a massive gap between advanced and developing nations in terms of efficient energy transition investment. This must continue to be narrowed until 2030, Pandjaitan opined.
"Financing scheme and mechanism must also be done through transparent, honest, inclusive, and fair methods," he said.
The mechanisms for energy transition financing that can also be utilized by developing nations include mixed financing and carbon market establishment.
Related news: Kadin forms Carbon Market Hub to support energy transition
On account of the pandemic and geopolitical tensions, G20 members are also being encouraged to maintain the global supply chain.
This is especially important given that the crisis of rising food and energy prices affects low-income nations the most.
G20 members must handle this issue through cooperation with all nations working to build a more resilient supply chain in the future, the minister noted.
This effort must include supporting an effective multilateral trade system with stronger trade organization, he added.
During the event, Pandjaitan informed that Indonesia’s G20 Presidency is committed to closing the health financing gap between advanced and developing nations.
Related news: B20 Task Force continues to design constructive energy policies
Translator: Sanya Dinda S, Fadhli Ruhman
Editor: Rahmad Nasution
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