Government acts on Kyoto Protocol

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

The government is moving to implement the Kyoto Protocol by setting up a commission by October in charge of approving carbon emission swap agreements -- a unique program between rich and poor countries stipulated in the protocol to reduce worldwide carbon emissions.

Deputy State Minister for the Environment Sudariyono said the body, called the National Commission for Clean Development, would consist of representatives from several state institutions such as the Ministry of the Environment, the Ministry of Energy and Mineral Resources, the Ministry of Forestry and the Ministry of Trade and Industry.

"Companies or groups planning to 'sell' carbon emissions must report their projects to the commission to get approval.

"If they are approved, the commission will hand it over to the Designated World Authority for authorization," he told reporters on the sidelines of a national seminar on the Kyoto Protocol here.

Under the Kyoto Protocol, the World Designated Authority is in charge of bringing together parties involved in carbon emission trading.

"Apart from the establishment of the commission, we must still revise a number of regulations and policies, which are not favorable to the reduction of Greenhouse Gas (GHG) emissions," Sudarijono said.

The Kyoto protocol regulates three mechanisms for countries to work together to reduce GHG levels. One of them, which applies to Indonesia as a developing country, is a clean development mechanism (CDM) between advanced and developing countries.

The CDM is a financing scheme where advanced countries invest in environmental projects in developing countries to reduce GHG levels, because most of the developed countries are unable to reduce them further in their own countries.

Sudarijono estimated that Indonesia could "sell" some 125 million tons of carbon from the energy sector and another 125 million tons from forestry.

Agus P. Sari, the director of the Pelangi Foundation, said that two companies were ready to seek carbon emission credits under the Kyoto Protocol.

They are giant cement producer PT Indocement, which is expected to sell some 20 million tons of carbon, and U.S.-owned Amoseas Indonesia Inc, which plans to invest US$100 million in a third geothermal power plant on the Darajat volcano in West Java.

"We do expect small-scale groups and businesses to also seek carbon emission trade," he said.

Josef Leitmann of the World Bank, Helmut Krist of the Germany's GZT and Tohmei Takegawa of the Japan's NEDO, have also offered to support Indonesia to enforce the protocol soon.

"We've provided some $450 million to finance the CDM projects. And Indonesia could get more money from it," Leitmann told reporters during a press conference.

Takegawa added that many Japanese companies are ready to buy carbon emissions from Indonesia.

A reduction of one ton of carbon dioxide can be bought for four or five U.S. dollars.

But Sudarijono said that it would still be a long time before the Kyoto Protocol could go into effect as it required the commitment of 55 countries, which cover some 44.5 percent of carbon emissions.

So far, the United States has been reluctant to ratify the protocol as it would have a big impact on its economy. Many countries now are putting their hopes on Russia, which has shown a willingness to ratify the treaty.

Only developed countries are required to reduce or limit their GHG emissions to their 1990 levels. But if they cannot do so in their home countries, they are allowed to purchase reduced GHG emissions from developing countries that have ratified the protocol, to meet their obligation.