Environment Minister: Carbon Trading Can Be a New Source of Economic Growth

JAKARTA, KOMPAS.com – Minister of Environment Jumhur Hidayat said environmental protection is no longer viewed merely as an obligation or additional cost for the business world. According to him, efforts to preserve ecosystems can now also become a source of economic growth through carbon and biodiversity businesses. “We are slowly shifting the paradigm of building by destroying the environment. Now, economic growth can also be achieved through environmental conservation. One way is through carbon and biodiversity businesses,” Jumhur said at the Biodiversity Business Forum on Thursday (23/7/2026). He cited mangrove forest restoration as an opportunity that can generate economic benefits through carbon trading. According to him, the cost of planting and maintaining mangroves for three years is estimated to reach around Rp 200 million per hectare. However, if the project generates tradeable carbon credits, its economic value has the potential to increase. “Once it enters carbon trading and is offset, its value could be much greater. This is what we mean by economic growth through environmental protection,” Jumhur said. Besides offering potential profits for businesses, he said carbon projects can also create economic benefits for surrounding communities by providing employment during the restoration and maintenance of the area. Jumhur also explained that the carbon trading scheme allows forestry permit holders to obtain incentives from efforts to avoid emissions. For example, a company that has the right to clear a forest area but chooses to maintain its forest cover could potentially earn carbon credits from the emissions successfully avoided. According to Jumhur, similar opportunities exist in the waste management sector. Closing open dumping sites and utilising methane gas can produce emission reductions that are then converted into carbon credits. Therefore, he encouraged businesses to start preparing their capacity to enter environment-based businesses. Jumhur suggested that companies, both large and small scale, form teams or divisions that understand climate change issues, carbon trading, and biodiversity credits in order to capitalise on the economic opportunities developing alongside the transition to a low-carbon economy. “I want Indonesian businesses to become major players in this environmental business. The potential is huge and we must not be left behind because we do not understand the mechanism,” Jumhur said.