Green Industrial Policy from Below: Local Externalities and Global Supply Chain Politics in Indonesia’s Nickel Transition

12 Jan 2027, 08:30

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Indonesia’s nickel boom is usually read through the language of strategic minerals, industrial upgrading, and great-power competition. This paper asks what becomes visible when the same transition is read from the local level. Drawing on Indonesia’s nickel sector, it examines how green industrial policy produces uneven local externalities through land pressure, pollution concerns, labour tensions, fiscal dependence, and contested promises of development. The paper argues that these local effects are not peripheral social costs of the energy transition. They shape the political durability of supply chains that the United States, China, and Europe increasingly treat as strategic infrastructure.

The paper contributes to international studies by connecting global supply-chain politics with subnational political economy. It shows how the clean-energy transition creates new forms of cooperation and contestation between producing regions, national governments, foreign investors, and downstream markets. Indonesia’s nickel transition illustrates a broader problem for green industrialization in the Global South: supply chains cannot be made resilient through investment, trade agreements, or technology standards alone if the places that host extraction and processing experience the transition as externally imposed. A credible transition therefore depends on how global climate ambitions are negotiated locally.

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