President-Elect Prabowo Subianto to Form New Climate Change, Carbon Trade Agency

TEMPO.CO, Jakarta - President-elect Prabowo Subianto will establish a special agency to handle climate change and the carbon trade system, according to the Expert Council of Prabowo-Gibran National Winning Team Ferry Latuhihin.

Ferry said he’s currently drafting the government regulation as the basis for the new agency. "The head of the climate change and carbon trade system agency will likely be chosen after Mr. Prabowo is officially inaugurated as president,” he said on Thursday, August 22, 2024. 

The new agency, Ferry said, will have the duty to coordinate climate change policies and carbon trading. The new agency is a realization of Prabowo-Gibran’s green economy mission and will answer directly to the president. "It is similar to the National Nutrition Agency, it is established to achieve certain purposes and targets,” he said. 

According to Ferry, the agency is a response to various ministerial policies that are not in line with carbon management. This, he said, will harm Indonesia’s potential in the global carbon market. 

On the other hand, Ferry said the carbon trading scheme thus far is controlled by overseas carbon traders. "With the existence of a special agency, the optimization of carbon’s economic value will require domestic and foreign business actors to respect the basic principle of carbon as a state sovereignty," he said.

The new agency will be able to control the volume of carbon traded, Ferry said. The global demand for carbon credit is estimated to grow by 632 million tons in 2030. "And Indonesia has the potential to supply 20 percent of that amount," he said.

Ferry added that the existence of the new agency could strengthen Indonesia's geopolitical position in the world. In addition, this agency is expected to facilitate carbon offsets. 

Carbon offsets allow individuals and corporations to participate in global environmental project investments, such as protecting tropical rainforests and coral reef ecosystems. Simply put, carbon offsets are redemptions by individuals or corporations to reduce harm by compensating for carbon emissions in separate locations. 

"With a special agency, the carbon management and trade system will be more focused and its investments will have an impact on Indigenous communities and development in rural areas," said Ferry.

NANDITO PUTRA

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