Prof. Dr. Ridwan Dewayanto Rusli

Book chapter

• The Indonesian transboundary haze game: Countering free-riding and local capture
  Rusli, Ridwan D., 2018, Publisher: Chapter 13 in Pollution Across Borders: Transboundary Fire, Smoke and Haze in Southeast Asia, Editor Prof. Euston Quah, Nanyang Technological University, Singapore,
  We identify solution strategies and policies to abate man-made forest fires in Indonesia, mitigate the resulting transboundary haze pollution and enforce zero-burning regulation. Bargaining for abatement and enforcement exhibits characteristics of a repeated game-of-chicken with cross-border free-riding and local capture problems. The combined free-riding and capture problems must be tackled by shifting the incentives of the Indonesian central government, local bureaucrats and business elites, plantation and forestry companies, farmers and residents. Neighbouring country governments can offer technical and financial incentives to the Indonesian central and local governments, residents and farmers, while asserting control over regional plantation companies with business and financial interests in their jurisdictions.
• The logic of energy policy: The case of upstream oil, gas, coal and downstream oil sectors in Southeast Asia
  Rusli, Ridwan D., April 2013, Publisher: Co-editors Hong, Mark and Amy Lugg, Asan Institute of Policy Studies (AIPS) and Institute of Southeast Asian Studies (ISEAS), Singapore,
  This chapter describes a systematic approach to energy policy in Southeast Asia. It analyzes the interdependence between two out of the three main objectives of energy policy, namely economic competitiveness and energy security. The focus is on the Southeast Asian upstream oil, gas and coal as well as downstream oil refining and distribution industries. The framework takes on a holistic approach to the making of energy policy. It can be extended to other alternative energy sources and fuel types, to the downstream gas and coal processing, transport and distribution infrastructure sectors. This framework can also be applied to more specifically target the interdependence between economic competitiveness, energy security and environmental sustainability. The analysis starts with an examination of country-specific geographic, demographic, economic and socio-political determinants of energy policy. These provide the basis for selecting an optimal set of industrial, sector, trade, investment and fiscal policy instruments, as well as a feasible implementation program. The derived policy grid is compared to the actual energy policies of selected Southeast Asian countries. It is observed that all governments have relatively detailed energy sector policy blueprints, albeit with variations across sub-sectors especially in relation to the relatively recent alternative energy and climate change sub-sectors. However, the implementation of these energy policy programs in some countries is hampered by institutional and socio-political constraints, and the need for governments to pursue more rigorously commercial strategies.

Book review

• Review of Vlado Vivoda: Energy security in Japan, challenges after Fukushima
  Rusli, Ridwan D., 2016, Publisher: Singapore Economic Review 61:4,
  The study of Japan's energy security challenges post-Fukushima is not only critical to this highly industrialized nation that possesses almost no indigenous resources, but also of great relevance to other countries exposed to imported energy feedstocks, whose energy mix include nuclear power generation, and whose industries are regulated and affected by political and institutional inertia. The author argues that Japanese energy policy is embedded in the country's specific political, economic and social context. While energy transitions are inherently difficult and costly, the implementation of new energy policies is further constrained by existing interests and institutions. This path dependency makes it more difficult for government and industry to engineer major shifts in energy mix and develop new energy technologies in a shorter time period.

Book

• Hydrogen Demand and Supply in ASEAN's Industry Sector: Current Situation and the Potential of a Greener Future
  Editors A.J. Purwanto and R.D. Rusli; Autors A.J. Purwanto, R.D. Rusli H.P.R. Graha, S. Koonaphapdeelert, R.M. Ulum, A.Z. Abidin, C.E.N. Setyawati, D.Lutfiana, B. Munir, D. Ferdian, V. Elsye, R.W. Bhaskara, N. Pranindita, 2024, Publisher: Economic Research Institute for ASEAN and East Asia
  Departing from the fact that current hydrogen use in the Association of Southeast Asian Nations (ASEAN) countries is entirely absorbed in the industry sector, and that this hydrogen is almost entirely produced via conventional steam methane reforming with high-carbon intensity, this study aims to contribute to an optimal hydrogen market development strategy for the ASEAN region. This strategy is critically important as hydrogen will play an important role in the energy transition in ASEAN that aims to reach carbon neutrality by mid of the century. The specific goal of this study is to provide a set of policy recommendations for policymakers in the ASEAN Member States to accelerate the process of obtaining lower carbon intensity of hydrogen supply in the industry sector, as part of an optimal hydrogen market development strategy for the ASEAN region. This goal is attained via two pathways. First, by understanding hydrogen use in the ASEAN countries for the last 5 to 10 years and its current and future demand and supply to the industry sector, and second by analysing how the supply of hydrogen in the ASEAN countries can become greener or less carbon intensive. This includes an analysis of future production, storage, transport costs, and capacity development along the different low-carbon hydrogen production routes. To accelerate the process of obtaining low-carbon hydrogen supply in the industry sector, this study recommends the governments of ASEAN Member States to proceed with the following: •Continue to increase renewable electricity generation’s share and reduce transmission costs. •From the perspective of sectoral, regional, and international political economy, formulate strategies and manage the horizontal and vertical institutional interactions to gain maximum support for the greening of hydrogen production for key industrial applications in the ASEAN region. •Elaborate policies on how to combine public sector co-financing, subsidies, and/or tax breaks with optimal carbon pricing to incentivise the production of low-carbon (green) hydrogen in the near term. •Launch low-carbon hydrogen pilot projects, such as producing it from the surplus electricity generated by variable renewable energy resources including solar photovoltaic and geothermal or producing it from electricity generated by variable renewable energy in remote areas where electricity demand is negligible. Along these production pathways, hydrogen plays the role of batteries and/or transportable batteries, thus facilitating penetration of variable renewable electricity.
  https://www.eria.org/publications/hydrogen-demand-and-supply-in-aseans-industry-sector

Journal Article

• State-Owned Firms and Private debt
  Picard, Pierre M., and Ridwan D. Rusli, October 2018, Publisher: Journal of Public Economic Theory 20:5, pp. 672-702,
  We study the role of private debt financing in reducing government transfers and information costs in a state-owned firm. We show that debt contracts allow the government to reduce socially costly subsidies by letting undeperforming state-owned firms default. When the firm has private information, the government uses debt to reduce the firms` information rents. The option of default and privatize allows the government to stop subsidizing the firm. We identify the conditions under which information costs outweigh privatization costs and a positive debt level benefits governments.
  04.2018 JPET Picard Rusli

• Reinterpreting social processes: How system theory can help to understand organizations and the example of Indonesia’s decentralization
  Duek, Ana, Brodjonegoro, Bambang, and Ridwan D. Rusli, 2010, Publisher: Emergence: Complexity & Organization 12:4, pp. 30-56,
  The complexity of social systems is characterized by the possible occurrence of simultaneous or sequential processes of structural change. This paper is focused on certain types of structural change: (i) those produced by assembly and disassembly and (ii) those resulting from decisional and/ or behavioral processes, including both bottom-up and top-down processes. These general concepts from system theory are applied to the case of Indonesia’s decentralization. The well-known story of Indonesia’s remarkable transition to a democratic society and decentralized nation is presented here in an alternative manner that has allowed us to identify types of structural changes in empirical events. Ultimately, this analysis offers a better explanation of the intrinsic complexity of any social organization and demonstrates an approach to similar problems.
  Duek Brodjonegoro Rusli Reinterpreting social processes

Journal Article

• Mechanism of CH2+. Radical-Cation Transfer from Distonic Ions X-CH2+. to pi- and n-Electron Bases in the Gas Phase. A Fourier Transform Ion Cyclotron Resonance Study Supplemented by ab initio MO Calculations
  Rusli, Ridwan D., and Helmut Schwarz, 1990, Publisher: Chemische Berichte 123 pp. 535-540,
  

PhD Thesis in Microeconomics

• Financing and Regulation for Developing Country Natural Resource and Energy Industries
  Rusli, Ridwan D., mimeo 2013, Publisher: University of Luxembourg
  This thesis summarizes my PhD research on the institutional and political economy aspects of the resource, energy and infrastructure industries in developing countries. The papers that constitute this thesis relate to my previous work on natural resource and energy policy as well as my research in public finance and fiscal decentralization. In the first paper Pierre M. Picard and I use a contract-theoretical model to study the role of private debt financing in disciplining a state-owned firm. In the second paper we model and examine the impact of price caps on the welfare of build-operate-transfer concessions. In the third paper, written with James Cust, we use a panel regression to analyze direct and fiscal spillovers related to resource extraction across Indonesian districts.

Working Paper

• On the Economics of Low Emission Hydrogen Production for Large-Scale Industrial Facilities in Southeast Asia
  A.J. Purwanto, R.D. Rusli, C.E.N. Setyawati, N. Pranindita, R.W. Bhaskara, S.S. Wibawa, 2024
  Green hydrogen is a key alternative for transport and power generation fuels, a potential energy carrier and, importantly, an industrial feedstock for a decarbonized future. We study the economics of blue and green hydrogen as feedstock for large industrial facilities in Southeast Asia. To understand how the Association of Southeast Asian Nations (ASEAN) member states can adopt emission-free and renewable hydrogen, the levelized costs of blue and green hydrogen are calculated, along with the necessary electrolyser, storage and transport facilities. First, a large-scale carbon capture and storage facility is located a few hundred kilometers away from an existing conventional steam methane reforming hydrogen plant. Second, a gigawatt-scale electrolysis facility adjacent to a large industrial site is fed by renewable energy from the grid or a third party provider. Third, given its enormous land and space requirements, a remote solar photovoltaic (PV) farm located several hundred kilometers away feeds an onsite electrolyser via dedicated electricity transmission lines. Alternatively, fourth, locating both the solar farm and electrolyser remotely at such distances requires hydrogen transport via pipelines or compressed hydrogen trucking. In all pathways the region’s transition toward green hydrogen must overcome challenges of high renewable electricity costs, insufficient availability of large landbanks required for remote GW-scale solar PV farms, long-distance power transmission lines or efficient hydrogen transport solutions, and an inconsistent track record in implementing billion dollar-scale public-private projects within budget and on time. We argue for an optimal configuration and sequencing of hydrogen production solutions for Southeast Asian industries.
• Political Economy of Low Carbon Hydrogen for Large-Scale Industries in ASEAN
  Alloysius Joko Purwanto, Ridwan Dewayanto Rusli, Citra Endah Nur Setyawati, 2024
  Significant industrial restructuring, heavy investments and government subsidies are required for decarbonizing hydrogen production across Southeast Asia's developing and transition economies. Therefore robust pressure and strong support are necessary to encourage ASEAN member states and companies to accelerate the implementation of their ambitious industrial decarbonization goals. Building on the literature on industrial policy and decarbonization politics, public procurement and regulation we focus on the political economy of transitioning to blue and green hydrogen for large-scale industries in ASEAN. On the one hand, conducive regulatory and fiscal frameworks, rigorous project planning and controlling, competition, transparency and accountability are key features of effective industrial policy and public-private infrastructure projects. On the other hand, the successful decarbonization of hydrogen production in ASEAN industries depends on aligning interests and incentivizing multiple international and domestic, public and private stakeholders. The potential winners and losers on the path towards decarbonization of industrial hydrogen are analyzed with regard to their origins, characteristics, the strength and power of their support or resistance to transitioning to blue and green hydrogen.
• Carbon Emission Reduction Potential of Hydrogen Production for Large-Scale Industrial Facilities in Southeast Asia
  Alloysius Joko Purwanto, Ridwan Dewayanto Rusli, Hafis Pratama Rendra Graha, Sirichai Koonaphapdeelert, Reza Miftahul Ulum, Citra Endah Nur Setyawati, Nadiya Pranindita, Ryan Wiratama Bhaskara, 2024
  Making use of hydrogen demand and supply forecasts reported by ERIA (2024) for the oil refining, ammonia, methanol and steel industries in ASEAN, this paper studies the carbon emission reduction potential of blue and green hydrogen for these large-scale industries until 2050. Future hydrogen supply and demand under IEA’s announced pledges scenario are examined for each of these four industrial sectors, the corresponding carbon emissions calculated, and their future carbon emission reduction potential estimated. The potential of ammonia fuels and methanol for e-fuels is also considered. Levelized cost of hydrogen estimates and various carbon price scenarios are studied to calculate the government subsidies required to help finance the transition from grey to green and blue hydrogen production in the four industrial sectors in Southeast Asia in the coming decades. The insights gained inform on policy strategies for a future industrial hydrogen decarbonization transition.
• Energy Transition and Energy Security in Germany: A Path to Sustainability and Security
  Chang, Youngho, Ridwan D. Rusli and Jackson Teh, Forthcoming 2021, Publisher: Technische Hochschule Köln
  We use the 4A framework of energy security to analyze Germany’s energy transition (“Energiewende”) over the last 20 years. While Germany’s forced build-up of renewables capacity and exit from nuclear and coal is a pioneering achievement among export-oriented, industrialized nations, the process has been and continues to be very costly. We find that, while the acceptance of climate change policies is very high among its society and voters, affordability to energy consumers and availability of energy resources have steadily decreased in recent years. As a result of high renewables feed-in tariffs and fuel taxes Germany’s households pay the highest electricity tariffs and among the highest fuel prices worldwide. Part of the country’s fiscal capacity is required to support energy-intensive industries. Exit from nuclear and coal electricity production necessitates increasing natural gas imports, which in turn creates geopolitical dependency on gas producing countries, requires extensive collaboration with European neighbors and partially undermines the benefits of the coal exit. Growth in renewables capacity has slowed down, hampered in part by local public resistance and increasing bureaucratic hurdles. Moreover, the technological leadership of the country’s engineering-oriented multinationals and SMEs (“Mittelstand”) has been challenged by increasingly sophisticated, highly efficient competitors, for example from China. To ensure German energy security in the long run, the country must accelerate significant domestic and European-wide renewables capacity, infrastructure and interconnector investments.
• Transboundary Haze Games: Local Capture and Common Agency
  Rusli, Ridwan D. and Youngho Chang, September 2021, Publisher: Technische Hochschule Köln and University of Luxembourg
  We study how transboundary, intergovernmental fire and haze negotiations interact with local, subnational government collusion and capture in a decentralized country. The local government collusion and capture problem is modelled as a competing principals and common agency problem that interacts with the central government's transboundary game of chicken. The results show that the central government can persuade farmers and prevent burning when the incremental benefits from slashing and burning are lower, the total direct and indirect costs and damages of fire and haze are higher and the required enforcement and abatement costs are not too high. Neighbouring governments can help mitigate the central government's budget constraint and punish violating multinational companies. We develop a multitask multiprincipal framework to expand our solution set to include partial burning outcomes and negative compensations. The results inform on a set of policy strategies to these complex transboundary fire and haze negotiation and local capture problems.
  Rusli & Chang Transboundary Haze Local Capture and Common Agency
• Gojek: From Ride-Hailing App to Diversified and Sustainable Platform Business Model
  Rusli, Ridwan D., Forthcoming 2021, Publisher: Institute of Global Business and Society (GloBuS), Technische Hochschule Köln
  We show how prisoner's dilemma-type competition problems can be mitigated through rapid platform diversification and ecosystem expansion. We analyze a ride-hailing company in Southeast Asia, Gojek, whose network grew to more than 170 million Users comprising consumers, partner-drivers, merchants and complementors within a few years and already achieves higher contribution margins than ride-hailing peers Uber and Lyft. Its ecosystem integrates ride-hailing, food delivery and logistics, merchant solutions, e-commerce, marketplace and advertising, payments and fintech offerings. The company continues growing its network of complementors and App developers, expanding content and gaining critical mass in consumer data analytics and advertising. We compare the company's growth and diversification trajectory with those of its main international rivals and peers. The company's rapid growth and future potential is analyzed using Cusumano's (2012) Staying Power and Six Principles, Hax and Wilde's (2003) and Hax’s (2010) The Delta Model as well as Santos' (2016) home-market advantages frameworks. The recently announced multi-billion-dollar merger with one of Southeast Asia's largest e-commerce majors lends additional support to the above arguments.
• Subnational Government Budgets and Resource Revenues in Indonesia: Indications of Resource Blessings?
  Rusli, Ridwan D., and Wessel N. Vermeulen, Research Paper 222, 2019, Publisher: Oxford Centre for Research in Resource Rich Economies (OxCarre)
  We examine the economic consequences of resource extraction and the associated revenue windfalls on subnational government revenues and spending patterns. Making use of Indonesia’s fiscal sharing rules and an offshore oil and gas production instrument, we find a positive impact of resource revenues on the center-local balancing funds including the general allocation fund, despite the latters’ fiscal re-balancing purpose. Fiscal windfalls from resource extraction increase public sector spending on capital and infrastructure projects as well as public goods and services, with positive spillover benefits on local tax revenues. At the same time spending on personnel and administration increases less and decrease as percentage of total expenditures. Interaction with district economic governance index data indicates enhanced infrastructure spending but also increases in the balancing funds.
  Rusli Vermeulen Indonesia budget Resource blessing
• The economic spillovers from resource extraction: a partial resource blessing on the subnational level?
  Cust, James, and Ridwan D. Rusli, 2014, Publisher: Economic Governance Centre, NTU, Discussion paper 2014-02,
  We examine the economic consequences of resource extraction and associated revenue windfalls, measured at the subnational level. Our analysis focuses on variations across Indonesian districts and municipalities to estimate the spillover effects on economic activity, measured in terms of local GDP. Two important channels are identified: direct spillover effects from extraction activity, and the fiscal spillovers from local government spending associated with revenue windfalls from extraction activity. We use Indonesia`s fiscal sharing rules to quantify and disentangle these two channels by application of an instrumental variable. We show that the main economic gains accrue via transfers to, and spending by, local government. While direct project-level investments and production contribute to measures of overall GDP, these are found to be largely driven by the value of oil extraction, with only limited evidence for a direct impact on non-oil GDP. In contrast to other works, it appears that regionally decentralized government spending can be growth-enhancing over the decade surveyed. We argue that resource endowments do contribute to increased economic activity at the subnational level in Indonesia, but may lower the overall growth effect of spending.
  Cust Rusli Subnational economic spillovers Oil
• The natural resources industry in decentralized Indonesia: how has decentralization impacted the mining, oil and gas industries?
  Duek, Ana, and Ridwan D. Rusli, Dec 2010, Publisher: CREA Discussion Paper 2010-25,
  Indonesia’s decentralisation laws have granted local governments more authority for generating higher own revenues and running more tailored decentralised public services. There is evidence, though, that inefficient and ineffective local governance continues to predominate after decentralisation. Regional autonomy, as defined in the decentralisation laws, has left some matters ambiguous, requiring more detailed implementing regulations. In the natural resource sector, in particular, the implementation of these laws has generated uncertainty for most social actors. Traditional as well as new formal and informal rules of conduct among a wide array of social actors continue to influence the management and allocation of the economic and social benefits of natural resources at the local level. All this has resulted in central-local policy inconsistencies and coordination issues, new hierarchies along geographic-political divisions, the wider spread of corruption, serious fiscal and environmental issues and adverse effects on the investment climate of the country.
  Duek Rusli Indonesia natural resources Decentralization
• State-owned firms: Private debt, cost revelation and welfare
  Picard, Pierre M., and Ridwan D. Rusli, Nov 2012, Publisher: CREA Discussion Paper 2012-10,
  We study the role of private debt financing in reducing information costs in a state-owned firm. We show that debt contracts allow the government to avoid socially costly subsidies by letting unprofitable state-owned firms default. When the firm has private information, the government uses debt to reduce the firms` information rents. The option of default and privatize allows the government to stop subsidizing the firm. We identify the conditions under which information costs outweigh privatization costs and a positive debt level benefits governments.
  Picard Rusli State-owned firms Private debt

• On the Public vs. Private Financing of Strategic Industries (and Crisis Bailouts)
  8. Jahrestagung AK Finanzierung der Professor*innen an Hochschulen für Angewandte Wissenschaften
  May 2021
• Transboundary Fire and Haze Games: Local Capture and Common Agency
  European Public Choice Society Conference
  April 2021
• Subnational Government Budgets and Resource Revenues in Indonesia: Indications of Resource Blessings?
  Singapore Economic Review Conference
  Aug 2019
• Go-Jek's Platform and Ecosystem Strategy
  GloBuS Conference, University of Warsaw
  Apr 2019
• On the welfare impact of price caps on build-operate-transfer (BOT) concession contracts
  Public Economic Theory Conference, Catholic University Lisbon
  Jul 2013
• State owned firms: Private debt, cost revelation and welfare
  Workshop on Procurement and Infrastructure, Toulouse School of Economics, World Bank and ANR
  Mar 2013
• State owned firms: Private debt, managerial commitment and welfare
  Public Economic Theory Conference, University of Indiana, Bloomington
  Jun 2011