President of the Republic of Indonesia: Carbon Exchange, Indonesia's Contribution to Fighting the Climate Crisis

  The President of the Republic of Indonesia, Joko Widodo, emphasized that the Indonesian carbon exchange, which was officially launched on Tuesday, is Indonesia's real contribution to fighting the climate crisis. The Antara website reported that President Jokowi explained that the proceeds from this trade would be reinvested in efforts to protect the environment, especially reducing carbon emissions, because Indonesia has extraordinary potential in nature-based solutions and is the only country where around 60 percent of its carbon emissions reduction comes from from the natural sector.

"In my records there are approximately 13 tonnes of CO2 potential carbon credits that can be captured, and if we calculate the potential for our carbon exchange it could reach IDR 3,000 trillion, even more," said President Jokowi at the launch of the Indonesian Carbon Exchange at the Indonesia Stock Exchange, Jakarta, Tuesday. This very large figure, according to him again, will be a new economic opportunity that is sustainable and environmentally friendly, in line with the world's direction towards a green economy. "The carbon exchange could be a big step for Indonesia to achieve its emissions reduction target," said Jokowi, referring to the Nationally Determined Contribution (NDC) or Indonesia's commitment to reduce greenhouse gas emissions by 31.89 percent on its own or 43.20 with international assistance.

For this reason, Jokowi asked that carbon trading refer to international carbon standards and utilize technology, so that the transaction process can be effective. Then, he asked that there be clear targets and time frames for both domestic and foreign carbon markets. The President also requested the regulation and facilitation of a voluntary carbon market in line with practices in the international community, ensuring that these standards do not interfere with Indonesia's emissions reduction targets. "I am optimistic that Indonesia can become the world's carbon axis as long as it is worked on consistently together with all stakeholders," said Jokowi. Previously, the Financial Services Authority (OJK) issued Regulation Number 12/SEOJK.04/2023 concerning Procedures for Organizing Carbon Trading Through the Carbon Exchange (SEOJK 12/2023) as a technical rule from the Financial Services Authority Regulation (POJK) Number 14 of 2023.

OJK then appointed BEI as the organizer of the carbon exchange. A carbon exchange is a carbon trading system that includes buying and selling carbon credits. The carbon exchange is designed to regulate the trading of carbon emission permits and record ownership of carbon units according to market mechanisms. In short, a carbon exchange is a trading system in which carbon emission permits are traded with the aim of reducing greenhouse gas emissions. One tradable carbon credit is equivalent to a reduction in emissions of one tonne of carbon dioxide. When a carbon credit is used to reduce, save, or avoid emissions, it becomes a substitute and can no longer be traded. Through the carbon trading platform, which has been preparing since 2022, Indonesia is able to take a bigger role in efforts to control the impact of climate change globally.