Indonesia stands ready to contribute meaningfully to global efforts in preventing the climate crisis

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The relationship between macroeconomics and climate is fundamentally defined by the financial risks posed by climate change and the economic strategies used to mitigate them. Climate-driven disasters, such as extreme weather and rising sea levels, act as significant "supply shocks" that disrupt infrastructure, trigger food inflation, and threaten a nation’s GDP growth. To counteract these risks, governments implement macroeconomic policies like carbon pricing and green financing to incentivize sustainable industries, ensuring that environmental health and long-term economic stability are integrated into a single sustainable framework.
Stranded assets are resources that have suffered from unanticipated or premature write-downs, devaluations, or conversion to liabilities due to changes in the economic, regulatory, or physical environment. In the context of climate change, this primarily refers to fossil fuel reserves (such as coal, oil, and gas) and related infrastructure that can no longer earn a financial return because of stringent carbon regulations, the falling cost of renewable energy, or physical climate risks. As the world shifts toward a low-carbon economy, these assets remain on a company's balance sheet as high-cost investments that cannot be sold or utilized, posing a significant systemic risk to financial institutions and global macroeconomic stability.
To prevent climate change, we must implement a dual strategy that combines aggressive systemic reform with individual lifestyle changes. At the structural level, governments must accelerate the global energy transition by phasing out fossil fuels, enforcing carbon taxes, and investing heavily in renewable energy and green infrastructure. Simultaneously, individuals must reduce their environmental footprint by adopting energy-efficient technologies, shifting toward sustainable diets, and supporting a circular economy that prioritizes reuse over consumption. Only by integrating these high-level policy shifts with widespread behavioral changes can we effectively lower global emissions and protect the planet’s long-term ecological stability.
Macroeconomics is the branch of economics that studies the behavior, structure, and performance of an economy as a whole, rather than focusing on individual markets. Instead of looking at a single household or company, it analyzes aggregate indicators such as Gross Domestic Product (GDP), unemployment rates, inflation, and national income to understand how a country's economy functions. Governments and central banks use macroeconomic theories to develop policies—such as adjusting interest rates or government spending—to stimulate growth, manage stable prices, and ensure overall financial stability
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