Carbon Trading and Its Impact on Indigenous Peoples and Forests

The Joko Widodo administration in Indonesia passed the Presidential Decree No. 98 in 2021 on Carbon Economic Value Management, which grants private companies exclusive rights to manage carbon trading schemes. Since then, multinational companies have bought carbon credits through such projects across the country, yet questions about inclusivity and fairness persist.

During COP29 in Baku, Azerbaijan, Indonesia reiterated its commitment in reducing emissions to achieve net zero by 2060 or sooner, positioning carbon trading as a cornerstone strategy. However, experts and activists argue that privatization-driven approaches risk perpetuating conflicts with local communities due to overlapping regulations, insufficient recognition of Indigenous rights, and a lack of transparency and accountability.