Jakarta, May 25, 2022 - The voluntary carbon market or in Indonesia better known as the carbon offset market has an important role in global decarbonization. Indonesia's abundant natural resources - from mangroves and tropical forests to hydroelectric power plants and vast geo power potential - mean that carbon offsets produced in Indonesia will not only help Indonesia achieve the international commitments contained in the Paris Agreement as a Nationally Determined Commitment (NDC), but will also create new jobs, increase government revenues, and export revenues.
Seeing the current situation, the Indonesian Chamber of Commerce and Industry (KADIN) as the organizer of the Indonesian B20, together with the ICDX, Commodity Futures Exchange, held an online webinar with the theme "Organized voluntary carbon marketplace to tackle the global climate crisis" as part of the B20 Side Event to Trade and Investment Task Force. This webinar is expected to provide the impetus for the government in establishing a voluntary carbon market in Indonesia. The form of the Voluntary Carbon Market implemented in Indonesia can be an inspiration for other G20 countries facing similar climate challenges.
Chairman of the B20 Trade and Investment Task Force, Arif Rachmat, in his remarks said, “The functioning of an effective carbon market with its carbon pricing mechanism must significantly reduce the level of carbon emissions in the atmosphere. In order to attract interest from as many countries as possible, carbon markets must operate on the principles of transparency, integrity, inclusivity, and fairness for all.”
Furthermore, Arif also said that the B20 Trade and Investment Task Force aspires to have a market mechanism that allows the private and public sectors to contribute in reducing overall carbon emissions. After the ratification of the Paris Agreement, the carbon trading scheme must also be aligned with the interests and objectives of the country's NDC. However, considering all available options, today the world needs an effective global carbon trading system that is safe and fair, especially for least developed and developing countries.
On the same occasion, Executive Director for Public Policy, GFANZ, Alice Carr said, “If we can establish a cross border market, we can achieve a scenario where the combined advance economy can buy high quality renewable carbon credits, which can be used to support the development of nature-based solutions today, and carbon capture technologies in the future. This will also help developing countries like Indonesia to preserve the environment, as well as reduce carbon emissions by three times."
In line with Alice Carr, Special Advisor of CDP, Member, Distinguished Advisory Board, Integrity Council for the Voluntary Carbon Market, Paula DiPerna explained that the establishment of a voluntary carbon market marks a new stage in the development of carbon trading, as well as a long step for energy conservation and emission reduction. , as well as accelerating economic development and making society more environmentally friendly and conserving natural resources.
“Carbon offsets traded in the voluntary market do not affect the achievement of NDC, if this carbon offset is purchased by a foreign company, the emission reductions will still be calculated as Indonesia's NDC and not for foreign country's NDC. In other words, the voluntary carbon market will encourage private sector investment in carbon reduction efforts as a contribution to Indonesia's NDC, while creating new sources of income,” said ICDX CEO Lamon Rutten.
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