Indonesia will finalise a bilateral agreement with Japan to promote carbon trading between the two nations, the Southeast Asian country’s Vice-Minister for Environment and Forestry Alue Dohong announced yesterday.
During a visit to Tokyo, he told Japan-based industry trade platform Nikkei Asia that a target had been set for September with the MRA (mutual recognition agreement) to be signed by both countries.
Alue Dohong met with his counterpart at Japan’s Environment Ministry this week. Both countries will align their emission-reduction certification schemes – Japan’s Joint Crediting Mechanism and Indonesia’s SPEI – regarding methodologies and registry systems.
“This will promote carbon trading involving the private sector as well as the public sector,” Dohong said.
Indonesia and Japan are already considering potential projects that would generate carbon credits, involving both the governments and the private sector. This includes a project with Japan’s Sumitomo Forestry, which is working on a peatland restoration project in Central Kalimantan.
Peatlands are among the most valuable terrestrial ecosystems in the fight against climate change. These deep layers of partially decayed plants and other organic materials are tens of thousands of years old.
Globally, peatland covers more than 3 million square kilometres and contains more than 550 gigatonnes of carbon – more than any other type of terrestrial ecosystem, including forests.
In fact, one square metre of northern peatlands contains five times the amount of carbon as one square metre of Amazon’s tropical forest.
Globally, peatland covers more than three million square kilometres and contains more than 550 gigatonnes of carbon—more than any other, with one square metre of northern peatlands containing five times the amount of carbon as one square metre of Amazon’s tropical forest.
Alue Dohong emphasised that carbon trading schemes were part of Indonesia’s effort to reach carbon neutrality by 2060, saying that “a high commitment from the developed countries,” such as financing, technology and capacity building were needed.
The Indonesia-Japan discussions are taking place against the backdrop of ongoing talks over international carbon trading, which is authorised under Article 6 of the Paris Agreement on Climate Change. The clause allows companies to create and trade carbon credits across countries.
The vice-minister said Indonesia hopes to showcase its bilateral framework with Japan at the 29th United Nations Climate Change Conference, or COP29, in Azerbaijan in November.
Bilateral schemes are a “quick strategy to show the Paris Agreement parties that [the Article 6 clause] is doable since it is easier to agree on terms between two countries than in multilateral discussions,” he said.
“We hope the other countries are going to join in and also orchestrate this kind of [agreements],” Dohong added. “There is interest in similar programs from South Korea, Singapore and Malaysia.
As part of the global effort to meet the goals of the Paris Agreement, countries are submitting their climate goals for 2035, or the second Nationally Determined Contributions (NDCs), by early next year. Indonesia submitted its first NDC, which set the target for 2030 in 2016. It has updated the document since then.
Dohong said that the second NDC is being drawn up and that President-elect Prabowo Subianto will need to be consulted after he takes office in October.
Prabowo, who is planning to set up a new agency for climate change and carbon trading mechanisms, will “put a high priority on environmental issues,” the vice-minister said.
On top of the sectors included in the first NDC — forestry, energy, industry, waste and agriculture — the second NDC will address mitigation and adaptation of the marine sector.
Dohong said there was also huge potential for carbon sequestration in the marine ocean sector, such as with the mangroves and coral reefs.
