OJK Highlights Indonesia’s Carbon Exchange as a Model for Effective Climate Action

The Financial Services Authority (OJK) has lauded Indonesia’s carbon exchange, noting it as the leading exchange in Asia. “The launch of our carbon exchange has seen substantial transaction volumes, reflecting the urgency and effectiveness of addressing climate change,” said Aldy Erfanda, Director of Carbon Exchange Supervision at OJK.

Indonesia initiated its carbon credit trading on September 26, 2023, marking a historic step in financing emissions reductions and participating in the global carbon market. The exchange, managed by the Indonesia Stock Exchange (IDX), received its operational license from OJK on September 18, 2023.

Aldy Erfanda praised the complexity of Indonesia’s carbon trading system, which includes cap-and-trade and carbon tax mechanisms. This contrasts with simpler systems in other countries. The complexity of Indonesia’s approach aims to ensure credibility and transparency, although it has faced challenges.

Looking ahead, Aldy announced plans for a pilot project on international carbon trading, with coordination among regulators and relevant ministries. Despite initial skepticism, Indonesia aims to launch international carbon trading in 2024, supported by comprehensive regulations and international interest.

Indonesia’s rich forest resources and commitment to significant global emission reductions continue to attract international attention. The country’s rigorous regulatory framework and efforts to integrate diverse sectors underscore its dedication to a robust and credible carbon trading system. ( Uki Ruknuddin)