Skip to main content

Indonesia to keep carbon trade local until GHG targets are met

by Sangam Paudel, Dec 3
2 minutes read

Indonesia’s finance minister said that the country will not allow cross-border carbon trade until it met its greenhouse gas reduction targets, highlighting that at current rates, its domestic carbon price would be among the cheapest in the world.

vehicle beside concrete building during daytime

So what?

The cost of carbon is usually determined through calculations of the cost of carbon abatement and the benefit from said abatement. This means that for developing nations where these costs are generally lower (relative to developed nations), the cost of carbon is also lower.

The differential cost of carbon across different economies complicates the trading of carbon credits across national borders. Indonesia’s recognition of their positionality has led to their decision to keep carbon trade local, so that carbon emission abatement through carbon trade gets attributed to local entities.

Indonesia is a large nation with huge potential for the generation of carbon credits. Will other nations follow suit and keep carbon trade local? What does this mean for countries like Singapore, who only recently announced their plans to develop an international carbon trading marketplace? Would such moves hinder global efforts to reduce carbon emissions, or would they provide local entities with more agency, while making it difficult for larger international companies to get a cheaper, easier way out of mitigating the climate crisis?

Sources

Details

by Sangam Paudel Spotted 90 signals

Have you spotted a signal of change?

Register to receive the latest from the Futures Centre.
Sign up

  • 0
  • Share

Join discussion

Related signals

Our use of cookies

We use necessary cookies to make our site work. We'd also like to set optional analytics cookies to help us improve it. We won't set optional cookies unless you enable them. Using this tool will set a cookie on your device to remember your preferences.

For more detailed information about the cookies we use, see our Cookies page.

Necessary cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytics cookies

We'd like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our 'Cookies page'.

>