Fidelis E Satriastanti

Indonesia's Carbon Trades Need UN Backing: Environmentalist

If Indonesia hopes to maximize the monetary rewards of carbon trading, its must ensure any new deals it forges remain under the umbrella of the UN climate change convention, an environmentalist said on Tuesday.

“It’s fine if the United States wants to have a bilateral meeting with Indonesia, but [the mechanism] must be done under the UNFCCC [UN Framework Convention on Climate Change],” Emmy Hafild, chief of the economic and environment cluster at government reform group Kemitraan, said during a meeting in Jakarta called “2009 US-Indonesia Comprehensive Partnership: Engaging the Nongovernmental Sector.”

She said if such partnerships were forged outside the UN framework the two countries could set their own prices, which could mean lower compensation for Indonesia down the road.

Emmy said the two countries played crucial roles in the fight against climate change. The United States is the largest emitter of carbon, while Indonesia is the third largest. The two nations have agreed to establish a carbon trading market through the Reducing Emissions from Deforestation and Degradation, or REDD, scheme. REDD was included in the Bali Action Plan, a roadmap for negotiating a new strategy to replace provisions in the Kyoto Protocol, which was hammered out during the 13th Climate Change Conference in Bali in 2007.

Indonesia could end up earning “only a small amount of money from REDD, not enough to compensate local people and also try to preserve forests, because the United States might want to pay less” for the carbon credits, Emmy said.

She added that carbon credit prices in the only market in the United States stood at $3 to $5 per ton, much lower than in Europe.

Rezal Kusumaatmadja, a partner at Starling Resources, a private sector organization that has been investing in REDD, said the lack of understanding of REDD and carbon markets had influenced the market’s development.

“Everyone seems to think that [REDD] is easy money, but it’s not,” Rezal said. “The private sector needs market assurance considering that there has not yet been any REDD transactions in the voluntary carbon market,” he said.

Yus Rusila Noor, senior program officer at Wetlands International, said any carbon trading partnerships had to take into consideration the effect on local residents of projects.

The REDD scheme won’t be successful unless parties “involve the local communities because peatland forests are not found in major cities. They are in remote areas with a lower level of human development,” he said.