Description
In December 2015, the Paris Agreement on Climate Change was officially adopted. It outlines a global action plan to avoid dangerous climate change by limiting global warming to below 2 degrees Celsius. Many interpret this agreement as a foundation for the development of carbon markets, particularly to accelerate the adoption of government-implemented carbon pricing as a critical policy instrument for managing greenhouse gas (GHG) emissions.
Indonesia is committed to reducing GHG emissions by 29 percent by 2030 and 41 percent with international assistance. This commitment is contained in the Nationally Determined Contribution (NDC) submitted as a result of the adoption of the Paris Agreement. However, this commitment is threatened by the forest and land fires that occurred in 2015.
Meanwhile, Indonesia’s land use, energy, waste and industrial process sectors under the business-as-usual scenario still contribute significantly to GHG emissions. Based on comparative studies to other countries and similar initiatives, regulations on voluntary carbon trading and mechanisms to set carbon credits or a floor and ceiling are important.
Multi-sectoral commitment is also needed to advance Indonesia’s efforts to achieve its NDC targets. However, the small number of actors involved, namely the Ministry of Energy and Mineral Resources, the Ministry of Industry and the Ministry of Public Works, has led the public to urge the government to make serious efforts to ensure the achievement of the NDC.
In addition, there is no clear division of roles between the ministries and agencies involved. It is in this context that support to the Ministry of Forestry and Environment (MoEF) as the focal point of the NDC is crucial. With support from CLUA, KEMITRAAN’s program aims to support MoEF in achieving the national low emission development agenda through carbon credit schemes and carbon markets. The project is also intended to develop an integrated approach among supporting ministries and government agencies to meet the Indonesian government’s NDC.
The strategic focus of the program is (1) the provision of academic papers that include, among others, policy recommendations on domestic carbon markets and carbon credit management schemes related to forestry and peatlands, and (2) analysis to improve collaboration and coordination between government agencies in producing policy reviews and integrated actions.
Key Outcomes
The program has produced a briefing note on “Valuing Carbon: Enabling Conditions for Indonesia’s Domestic Carbon Market”. This briefing note is intended to be a supporting document for proposing policy and technical recommendations on domestic carbon markets and carbon credit management schemes. The program also produced an integrated report on the 2016 National Action Plan for Emission Reduction (RAN-GRK) as well as an article published in Forest Digest and in-depth interviews with stakeholders.
Donor
Ministry of Foreign Affairs of Norway
Project Period
March 2017-December 2019
Implementing Partners
Ministry of Environment and Forestry and Ministry of Finance