Government Insists Carbon Trading Must Not Become Business Speculation

Indonesia’s Environment Minister Mohammad Jumhur Hidayat has stressed that carbon credit trading through coastal mangrove rehabilitation programmes must not be allowed to become an arena for business speculation.

Speaking after a mangrove seedling planting event in Sumbawa, West Nusa Tenggara, on Tuesday, the minister said the government is adamant that carbon trading should not be exploited for speculative gain.

The carbon market is seen as one solution to reducing greenhouse gas emissions, with the buying and selling of carbon credits offering a potential new revenue stream.

Jumhur noted that Indonesia requires an estimated US$286 billion, or around Rp4,000 to Rp5,000 trillion, to fund its emissions reduction efforts, making it impossible for the state to bear the full cost.

The government is therefore opening opportunities for the private sector to participate in mitigating climate change through the carbon market mechanism.

Under the scheme, companies or entities that produce high emissions can offset them by financing the rehabilitation of mangroves or forests, which in turn generate carbon credits.

“Those who emit a lot of carbon must compensate by nurturing plants,” Jumhur said.

He added that the carbon trading scheme must provide real benefits to communities living around the rehabilitation areas, in addition to supporting carbon emission reduction targets.

Investors can involve local residents in planting and maintaining mangroves, an activity that simultaneously creates environmentally friendly employment, known as green jobs.

“In the context of mitigating climate change, the communities on the ground must feel the primary benefits,” the minister concluded.