Urgent transition, urgent extraction? Global decarbonization, national governance, and local impacts in the Indonesian nickel industry

Abstract The shift to low-carbon societies will require large amounts of energy transition materials for batteries to support intermittent renewable energy generation. While this energy transition is still at an early phase, the risks of negative social and environmental impacts associated with the extraction of these materials are becoming increasingly apparent. The challenges associated with resource extraction are well documented. However, there are significant gaps in knowledge about how the energy transition reconfigures natural resource governance and how this shapes impacts from resource extraction. This knowledge is critical for understanding the full impact of transition policies, and for identifying opportunities for, and barriers, to more sustainable and just extractive practices. We contribute to addressing this gap by exploring how Indonesian nickel governance has been reconfigured and centralized in the context of early energy transition efforts, and examining the social and environmental impacts this is having in Sulawesi, Indonesia, one of the largest nickel production areas in the world. Drawing on 88 interviews and six focus group discussions with key stakeholders, we show that while this centralization has enabled a 14-fold increase in extraction rates over a 10 year period, it has also resulted in a series of well-known negative social and environmental impacts that degrade important ecosystem services and threaten health, livelihoods, and ways of life. Importantly, these impacts are exacerbated by the rapidly shrinking political space for local participation caused by the centralization of nickel governance, highlighting the tension between urgency in up-scaling extraction of energy transition materials and undertaking a just low-carbon transition. Reflecting and addressing this tension will be essential to designing policies that can achieve just outcomes while successfully addressing the current nature and climate crisis.