Forests in Indonesia Have Contributed to Reducing Carbon Emissions for a Long Time, They Have Just Got Monetized in 2021

Deputy Minister of Finance Suahasil Nazara (Photo: Capture CIMB Youtube screen)

JAKARTA – Deputy Minister of Finance (Wamenkeu) Suahasil Nazara revealed that Indonesia has actually contributed actively to efforts to reduce world carbon emissions. He said that this had actually been going on for quite a long time.

"If we imagine that Indonesia's forests have been producing carbon reduction for a long time, already from the existence of forests," he said when speaking at the Sustainability in Action: Opportunities for a Better Tomorrow in Indonesia forum on Wednesday, September 13.

According to Suahasil, because of this, the government is making efforts to monetize the existence of forests in Indonesia in accordance with the green development agenda which is currently going global.

“But when will we admit that carbon has economic value? New in 2021. This has economic value, it can be assessed. Here Indonesia must create instruments that encourage emission reduction. "If we don't recognize its economic value then there will never be any business calculations," he said.

Deputy Sri Mulyani also conveyed that the regulatory basis for implementing carbon economic value is contained in Presidential Regulation number 98 of 2021.

"We are trying to ensure that the economic value of carbon can accelerate the achievement of contribution targets set nationally to control the effects of greenhouse gases and encourage national growth," he stressed.

Furthermore, Suahasil explained that the direction of this policy provides wider space for business actors to be able to contribute business-wise. The reason is, the more steps taken to reduce carbon emissions, the more the government can provide incentives in the form of carbon credits.

"This is potential and it is our homework to be able to calculate this," he added.

Most recently, the Financial Services Authority (OJK) issued OJK Regulation (POJK) Number 14 of 2023 regarding carbon trading through the carbon exchange (POJK carbon exchange). This regulation will become a guideline and reference for carbon trading through the carbon exchange implemented by market organizers.