President Joko Widodo at the IDX Carbon launch

Civil society groups oppose the Indonesian carbon exchange

President Joko Widodo launches and open the Indonesia Carbon Exchnage (IDX Carbon) at the Indonesia Stock Exchange in Jakarta on Tuesday, 26 September 2023. Cabinet Secretariat/Agung

By Sandy Pramuji

5 October 2023 at 10:30 (Updated on 4 December 2023 at 16:07)

CSOs warn of the potential dangers in carbon trading and urge the government to choose other instruments to address climate crisis.

The Indonesia Carbon Exchange (IDX Carbon) was launched by President Joko Widodo at the Indonesia Stock Exchange on Tuesday, 26 September 2023.

In his opening speech, Joko Widodo stated that IDX Carbon is a demonstration of the government’s effort in dealing with the impacts of climate crisis.

“The proceeds from this trade will be invested in efforts to protect the environment, especially through reducing carbon emissions,” said the President.

A carbon exchange is a marketplace to buy and sell certifications or permits for an entity (generally a company) to produce emissions – be it carbon dioxide (CO2) or other greenhouse gases – in a certain amount. The permission to release the emissions is called a carbon credit. It needs to be purchased if the company produces carbon beyond the threshold set by the authority.

Jokowi explained that Indonesia’s carbon credit potential reached around 1 gigaton of carbon dioxide (CO2) that could be captured, with a value of Rp3,000 trillion ($200b). Jokowi believes the sector will be a new economic opportunity that is sustainable and environmentally friendly.

Additionally, he said, the exchange is a concrete step towards realizing Indonesia’s Nationally Determined Contribution (NDC) target.

The Indonesian government has set the NDC with its own efforts (unconditional) at 29% and with international assistance (conditional) at 41%. By the end of 2022, the government released an Enhanced-NDC to update these targets to 31.89% (unconditional) and 43.2% (conditional) respectively.

Not all are on board the ambitious carbon exchange ship. Civil society organizations oppose it. The CSO group wrote an open letter titled “Boycott Carbon Trading, Stop Emission Release and Offloading, and Accelerate the Recognition of Indigenous Territories and People’s Management Areas!”, addressed to the president, relevant ministries, the Indonesia Stock Exchange, and international verification agency Verra.

This is a colonialism practice against indigenous peoples. Various legal instruments issued by the government in bridging carbon trade, which are oriented only towards investment interests, are a clear manifestation of the government’s “hand washing” of extractive industry practices.
Muhammad Arman, Legal and Human Rights Policy Advocacy Director, AMAN

A total of eight civil society organizations – the Indonesian Forum for the Environment (Walhi), the Indigenous Peoples Alliance of the Archipelago (AMAN), Greenpeace, the Mining Advocacy Network (Jatam), Pikul Foundation, Pusaka Bentala Rakyat Foundation, the Indigenous Peoples Defenders Association of the Archipelago (PPMAN), and the School of Democratic Economics (SDE) – agree that the government is crisis trading.

The group believes carbon trading is essentially the state giving permission to corporations and industrialized countries to continue releasing emissions through carbon offsetting.

A misguided solution the climate crisis

Uli Arta Siagian, WALHI’s Forest and Plantation Campaign Manager, said carbon trading is a misguided way to solve the climate crisis.

In his view, carbon trading is used only by corporations and industrialized countries to extract nature, prolonging conflict and worsening climate crisis impacts.

AMAN highlights the potential dangers if “carbon trading politics” are carried out without the recognition, protection, and fulfillment of indigenous peoples’ rights to the resources they have had for generations.

There are 2,449 indigenous communities with a population of around 17 million who are also members of the AMAN Society. They have a significant interest in this issue because much of the carbon to be traded is located where they live or have customary rights.

“This is a colonialism practice against indigenous peoples. Various legal instruments issued by the government in bridging carbon trade, which are oriented only towards investment interests, are a clear manifestation of the government’s “hand washing” of extractive industry practices, which are upstream of the emissions chain,” said Muhammad Arman, AMAN’s Director of Legal and Human Rights Policy Advocacy.

Torry Kuswardono, executive director of Pikul Foundation believes that championing carbon trading in addressing the climate crisis is a setback.

“Currently, carbon credits, especially forest carbon credits, are experiencing a credibility crisis. Recent research proves that carbon trading does not automatically reduce emissions,” said Kuswardono.

“Indonesia embarrasses itself by proudly choosing an instrument under global criticism and scrutiny.”

Kuswardono said Indonesia needs to choose other instruments that are more credible in terms of mitigation, environmental protection, and social and human rights protection than market instruments.

The network of civil society organizations demanded the government to: stop carbon trading; accelerate and expand the recognition and protection of people’s land and customary territories; reduce emissions immediately and significantly, and restore ecology and increase people’s adaptive capacity.

About the writer

Sandy Pramuji

After graduating from Padjadjaran University, Sandy has been active in journalism. Starting as a repoter at The National News Agency (LKBN) Antara in 2003, he then helped developing an English language... More by Sandy Pramuji

There are no comments yet. Leave a comment!

Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

REPUBLISH THIS CONTENT

Republish

The Indonesia Carbon Exchange (IDX Carbon) was launched by President Joko Widodo at the Indonesia Stock Exchange on Tuesday, 26 September 2023. In his opening speech, Joko Widodo stated that IDX Carbon is a demonstration of the government’s effort in dealing with the impacts of climate crisis. “The proceeds from this trade will be invested in efforts to protect the environment, especially through reducing carbon emissions,” said the President. A carbon exchange is a marketplace to buy and sell certifications or permits for an entity (generally a company) to produce emissions – be it carbon dioxide (CO2) or other greenhouse gases – in a certain amount. The permission to release the emissions is called a carbon credit. It needs to be purchased if the company produces carbon beyond the threshold set by the authority. Jokowi explained that Indonesia’s carbon credit potential reached around 1 gigaton of carbon dioxide (CO2) that could be captured, with a value of Rp3,000 trillion ($200b). Jokowi believes the sector will be a new economic opportunity that is sustainable and environmentally friendly. Additionally, he said, the exchange is a concrete step towards realizing Indonesia’s Nationally Determined Contribution (NDC) target. The Indonesian government has set the NDC with its own efforts (unconditional) at 29% and with international assistance (conditional) at 41%. By the end of 2022, the government released an Enhanced-NDC to update these targets to 31.89% (unconditional) and 43.2% (conditional) respectively. Not all are on board the ambitious carbon exchange ship. Civil society organizations oppose it. The CSO group wrote an <a href="https://www.walhi.or.id/boikot-perdagangan-karbon-hentikan-pelepasan-dan-pembongkaran-emisi-dan-percepat-pengakuan-wilayah-adat-serta-wilayah-kelola-rakyat">open letter</a> titled “Boycott Carbon Trading, Stop Emission Release and Offloading, and Accelerate the Recognition of Indigenous Territories and People’s Management Areas!”, addressed to the president, relevant ministries, the Indonesia Stock Exchange, and international verification agency Verra. <figure class="wp-block-pullquote is-style-jeo"><blockquote>This is a colonialism practice against indigenous peoples. Various legal instruments issued by the government in bridging carbon trade, which are oriented only towards investment interests, are a clear manifestation of the government’s “hand washing” of extractive industry practices.<cite>Muhammad Arman, Legal and Human Rights Policy Advocacy Director, AMAN</cite></blockquote></figure> A total of eight civil society organizations – the Indonesian Forum for the Environment (Walhi), the Indigenous Peoples Alliance of the Archipelago (AMAN), Greenpeace, the Mining Advocacy Network (Jatam), Pikul Foundation, Pusaka Bentala Rakyat Foundation, the Indigenous Peoples Defenders Association of the Archipelago (PPMAN), and the School of Democratic Economics (SDE) – agree that the government is <a href="https://www.ekuatorial.com/en/2021/11/siti-maimunah-the-climate-crisis-is-not-being-responded-to-by-recovery-instead-by-trading-the-crisis/">crisis trading</a>. The group believes carbon trading is essentially the state giving permission to corporations and industrialized countries to continue releasing emissions through carbon offsetting. <h3 class="wp-block-heading" id="h-a-misguided-solution-the-climate-crisis">A misguided solution the climate crisis</h3> Uli Arta Siagian, WALHI’s Forest and Plantation Campaign Manager, said carbon trading is a misguided way to solve the climate crisis. In his view, carbon trading is used only by corporations and industrialized countries to extract nature, prolonging conflict and worsening climate crisis impacts. AMAN highlights the potential dangers if “carbon trading politics” are carried out without the recognition, protection, and fulfillment of indigenous peoples’ rights to the resources they have had for generations. There are 2,449 indigenous communities with a population of around 17 million who are also members of the AMAN Society. They have a significant interest in this issue because much of the carbon to be traded is located where they live or have customary rights. “This is a colonialism practice against indigenous peoples. Various legal instruments issued by the government in bridging carbon trade, which are oriented only towards investment interests, are a clear manifestation of the government’s “hand washing” of extractive industry practices, which are upstream of the emissions chain,” said Muhammad Arman, AMAN’s Director of Legal and Human Rights Policy Advocacy. Torry Kuswardono, executive director of Pikul Foundation believes that championing carbon trading in addressing the climate crisis is a setback. “Currently, carbon credits, especially forest carbon credits, are experiencing a credibility crisis. Recent research proves that carbon trading does not automatically reduce emissions,” said Kuswardono. “Indonesia embarrasses itself by proudly choosing an instrument under global criticism and scrutiny.” Kuswardono said Indonesia needs to choose other instruments that are more credible in terms of mitigation, environmental protection, and social and human rights protection than market instruments. The network of civil society organizations demanded the government to: stop carbon trading; accelerate and expand the recognition and protection of people’s land and customary territories; reduce emissions immediately and significantly, and restore ecology and increase people’s adaptive capacity.

The Indonesia Carbon Exchange (IDX Carbon) was launched by President Joko Widodo at the Indonesia Stock Exchange on Tuesday, 26 September 2023. In his opening speech, Joko Widodo stated that IDX Carbon is a demonstration of the government's effort in dealing with the impacts of climate crisis. "The proceeds from this trade will be invested in efforts to protect the environment, especially through reducing carbon emissions," said the President. A carbon exchange is a marketplace to buy and sell certifications or permits for an entity (generally a company) to produce emissions - be it carbon dioxide (CO2) or other greenhouse gases - in a certain amount. The permission to release the emissions is called a carbon credit. It needs to be purchased if the company produces carbon beyond the threshold set by the authority. Jokowi explained that Indonesia's carbon credit potential reached around 1 gigaton of carbon dioxide (CO2) that could be captured, with a value of Rp3,000 trillion ($200b). Jokowi believes the sector will be a new economic opportunity that is sustainable and environmentally friendly. Additionally, he said, the exchange is a concrete step towards realizing Indonesia's Nationally Determined Contribution (NDC) target. The Indonesian government has set the NDC with its own efforts (unconditional) at 29% and with international assistance (conditional) at 41%. By the end of 2022, the government released an Enhanced-NDC to update these targets to 31.89% (unconditional) and 43.2% (conditional) respectively. Not all are on board the ambitious carbon exchange ship. Civil society organizations oppose it. The CSO group wrote an open letter titled "Boycott Carbon Trading, Stop Emission Release and Offloading, and Accelerate the Recognition of Indigenous Territories and People's Management Areas!", addressed to the president, relevant ministries, the Indonesia Stock Exchange, and international verification agency Verra. This is a colonialism practice against indigenous peoples. Various legal instruments issued by the government in bridging carbon trade, which are oriented only towards investment interests, are a clear manifestation of the government's "hand washing" of extractive industry practices.Muhammad Arman, Legal and Human Rights Policy Advocacy Director, AMAN A total of eight civil society organizations - the Indonesian Forum for the Environment (Walhi), the Indigenous Peoples Alliance of the Archipelago (AMAN), Greenpeace, the Mining Advocacy Network (Jatam), Pikul Foundation, Pusaka Bentala Rakyat Foundation, the Indigenous Peoples Defenders Association of the Archipelago (PPMAN), and the School of Democratic Economics (SDE) - agree that the government is crisis trading. The group believes carbon trading is essentially the state giving permission to corporations and industrialized countries to continue releasing emissions through carbon offsetting. A misguided solution the climate crisis Uli Arta Siagian, WALHI's Forest and Plantation Campaign Manager, said carbon trading is a misguided way to solve the climate crisis. In his view, carbon trading is used only by corporations and industrialized countries to extract nature, prolonging conflict and worsening climate crisis impacts. AMAN highlights the potential dangers if "carbon trading politics" are carried out without the recognition, protection, and fulfillment of indigenous peoples' rights to the resources they have had for generations. There are 2,449 indigenous communities with a population of around 17 million who are also members of the AMAN Society. They have a significant interest in this issue because much of the carbon to be traded is located where they live or have customary rights. "This is a colonialism practice against indigenous peoples. Various legal instruments issued by the government in bridging carbon trade, which are oriented only towards investment interests, are a clear manifestation of the government's "hand washing" of extractive industry practices, which are upstream of the emissions chain," said Muhammad Arman, AMAN's Director of Legal and Human Rights Policy Advocacy. Torry Kuswardono, executive director of Pikul Foundation believes that championing carbon trading in addressing the climate crisis is a setback. "Currently, carbon credits, especially forest carbon credits, are experiencing a credibility crisis. Recent research proves that carbon trading does not automatically reduce emissions," said Kuswardono. "Indonesia embarrasses itself by proudly choosing an instrument under global criticism and scrutiny." Kuswardono said Indonesia needs to choose other instruments that are more credible in terms of mitigation, environmental protection, and social and human rights protection than market instruments. The network of civil society organizations demanded the government to: stop carbon trading; accelerate and expand the recognition and protection of people's land and customary territories; reduce emissions immediately and significantly, and restore ecology and increase people's adaptive capacity.