The credibility currency : how state credibility shapes access to Just Energy Transition Partnership (JETP) negotiations in Indonesia and Nigeria

Abstract

Access to large-scale climate finance is increasingly mediated by negotiated partnerships such as Just Energy Transition Partnerships (JETPs), however the factors that determine which countries receive prioritized access, remain poorly comprehended and under-researched in the literature of climate finance and of public policy. As a consequence of that, this thesis therefore explores how state credibility influences participation as well as outcomes in JETP negotiations using a comparative qualitative case study of Indonesia and Nigeria. Through a process tracing of publicly available documents, policy statements, institutional reports, and elite statements by donor organizations, this paper shows that increased observable state credibility, operationalised through policy consistency, institutional capacity, reform track record, and diplomatic signaling, play a very significant role in increasing the chances of being prioritized and granted structured access to the JETP negotiations. The success of Indonesia in securing a US$ 20 billion JETP package at the 2022 G20 Summit is especially incongruent with the ongoing inability of Nigeria to strike a comparable deal, despite comparatively similar material needs as well as strong indications of interest. The overall findings from the research reveal that credibility acts as a type of gatekeeping mechanism in climate finance architecture, which filters access prior to even formal negotiations commencing. The research contributes to the body of literature on climate finance by offering further information and understanding of the political-economic and reputational processes that shape negotiated climate capital allocation, providing policy implications for countries especially those in the Global South seeking to enhance their credibility currency in international climate finance.