Indonesia’s Carbon Trading Market: Things You Need to Know
Summary
- The Energy and Mineral Resources (ESDM) Ministry will conduct trials of the carbon market in the electricity sector, following the government's plan to optimize carbon trading through Presidential Regulation on Economic Value of Carbon. During the trials, PLN may get extra revenue because of the emission surplus.
- Many doubt the carbon trading effectiveness in reducing greenhouse gas emissions. Besides, the government even made a relatively low emission reduction commitment. The Climate Transparency Report 2020 recorded that Indonesia's commitment was below the fair share of the Paris Agreement target. The government has not revised it even though there will be carbon trading regulations.
- Indonesia, one of the most heavily forested countries in the world, may economically benefit from the Paris Agreement up to Rp 350 trillion in five years based on the size of its forest area. The economic potential can be exploited by the government, local administrations, business players, and local communities.