Overview

In response to the 2021 Presidential Decree on the ‘Economic Value of Carbon’, the Government of Indonesia is looking to implement an emission trading system (ETS) under a “Carbon Market Exchange”. The vision for the Exchange is to drive a more equitable domestic price of Indonesia’s potential carbon credit and offset market given the country’s vast natural capital of intact forest, peatland, mangrove, coral reef, seagrass, and to some extent the untapped potential of regenerative agriculture from Indonesia’s expansive farming land. Carbon pricing will also be integrated into the government’s taxation regime with regard to the effort to achieve the national emission reduction targets.

The Natural Capital Communities Carbon (NCCC) Marketplace initiative aims to invite Indonesia, other ASEAN countries, and the Pacific to create a regional carbon market (both green and blue carbons) to support innovative financing for a just transition toward net zero emission in the region. The regional carbon marketplace aims to bring together owners of natural capital, who provide a stream of carbon offsets or sequestration services, and those interested in buying carbon offsets; providing deep and liquid offsets attractive to investors; and defining a standard that is clear and transparently monitored, which will take into account important elements of the region’s natural capital which include carbon stock enhancement, conservation and biodiversity.

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