Tuesday saw the debut of Indonesia’s first carbon market, providing businesses with a means of offsetting their emissions as Jakarta makes a commitment to becoming carbon neutral in its power sector by 2050.
The nation is one of the worst polluters in the world, and the multibillion-dollar investment plan to wean the archipelago off coal that was agreed upon with the US and other European countries last year has made little headway.
The exchange has been praised by the government as a means of lowering emissions in order to meet the nation’s climate goals by the 2050 date set forth in the $20 billion Just Energy Transition Partnership at the G20 conference held in Indonesia in November.
“I want to congratulate OJK (Financial Services Authority), BEI (Indonesia Stock Exchange) and related authorities for the launch of the first carbon exchange in Indonesia, marking the beginning of carbon trading in our country,” President Joko Widodo said at the launch.
“This is Indonesia’s real contribution to fight with the world against the climate crisis.”
He said the emissions trading market would help Indonesia reach its target climate pledges agreed under the 2015 Paris Agreement to help prevent global warming past 1.5 degrees Celsius.
“Concrete steps are needed to address this, and the carbon exchange that we launch today can be a concrete step,” he said.
The Indonesian president stated that the transaction had the potential to generate a new, sustainable economy worth at least 3,000 trillion rupiah ($194 billion).
The Financial Services Authority will be in charge of monitoring the trading, which will take place on the Indonesia Stock Exchange.
A board at the stock exchange reported that at least 13 transactions occurred at the start of Tuesday’s trading, resulting in the trading of more than the equivalent of 459,000 tons of carbon dioxide. Environmentalists have questioned Indonesia’s government’s adherence to its climate pledges as it continues to construct coal-fired power facilities that it had already commissioned. Indonesia is the world’s largest exporter of coal.
They have laid the blame for recent pollution rises in Jakarta on more than a dozen of these factories that are located close to the city.
