7/27/2014 Carbon trading and its challenges for Indonesia | The Jakarta Post

http://www.thejakartapost.com/news/2013/08/31/carbon-trading-and-its-challenges-indonesia.html 1/3
News Views Life Election Watch World Cup 2014 Outlook
Carbonoffsettingisafalsesolution.Thatwasthemessageinbold
printontarpaulinhangingonthebackwallofastagewherean
IndonesianenvironmentalNGOwashostingapublicdiscussionon
climatechange.
Carbonoffsettingrelatestocarbontrading,anideathathasstirred
controversyasameansofreducingcarbonemissionsinthe
atmosphere,whichfuelglobalwarming.
Carbontradingisthetransactionofverifiedcarboncreditswherebya
companycanbuygreenhousegascreditswhenitscarbonemissions
quotaistotallyspent.Thesecreditsareboughtinagovernmentcreated
carbonmarketbyfossilfuelbasedindustriestooffsetthecarbonthey
emitinexcessoftheircarbonallowance.
Essentially,firmsthatyieldlesscarbonthantheamounttheyare
allowedtoemitcansellcreditstocompaniesthatexceedtheircarbon
emissionlimits.
Carbontradingcomesintwovarieties:compliancebasedandvoluntary.
Thefirsttypeisfornationstatesandcompaniestocomplywiththe
emissionreductionrulesofthe1997KyotoProtocol.Thesecondtypeis
forvoluntaryoffsetting.Evenindividualswhoarefrequentflyerscanbuy
creditstooffsettheircarbonfootprint.
IndustrialOrganizationforEconomicCooperationandDevelopment
(OECD)countries,particularlyintheEuropeanUnion(EU),asratifiers
oftheKyotoProtocol,arelegallyboundtoreducetheircollectivecarbon
emissionsby5.2percentfrom1990levels.
Acaporgovernmentimposedlimitisplacedontheamountofcarbonan
industrialplantcanemitinagiventradingperiod.Withacapandtrade
mechanism,however,industriescangetaroundthislimitthrough
offsettingexcesscarbonbybuyingcarboncredits.
Asanapparentescapehatchforpollutionpronebusinesses,carbon
offsettinghasbeenaccusedbyenvironmentalNGOslikeGreenpeace
andtheIndonesianForumfortheEnvironment(Walhi)ofbeingafalse
solution.ItallowsmainlyWesternindustriestoemitcarbongasesin
excessandnotreducethem,thusdefeatingtheintentoftheKyoto
Protocol,theyargue.
Argumentsaside,forIndonesia,carbontradingisanincentivetosave
itscarbonrichforests.Byprotectingitsvasttropicalforestsand
peatland,Indonesiacanearnalotofcarboncreditsitcansell.Oneway
Indonesiacanconserveitsforestsandbecomeacarbonvendoris
throughitsREDDinitiativetoreduceemissionsfromdeforestationand
forestdegradation.REDDisamajorclimatemitigationschemethat
compensatescountrieslikeIndonesiatoavoiddeforestationand
degradation.
The13thUnitedNationsConferenceonClimateChangeinBaliin2007
producedtheBaliActionPlan(BAP).Thisisalongtermprocessfora
global,legallybindingclimatestrategy.ItsoutcomereplacestheKyoto
Protocol,whichendsonDec.31,2020.Onemeasurerecognizedinthe
BAPistheREDDinitiative.
Carbon trading and its
challenges for Indonesia
WariefDjajantoBasorie,Jakarta|Opinion|Sat,August312013,1:08PM
Editor's Choice Headlines Business National Archipelago Jakarta World Sports Photos Videos
Search
7/27/2014 Carbon trading and its challenges for Indonesia | The Jakarta Post
http://www.thejakartapost.com/news/2013/08/31/carbon-trading-and-its-challenges-indonesia.html 2/3
Paper Edition | Page: 4
ForaREDDschemetowork,CIFOR,theBogorbasedCenterfor
InternationalForestryResearch,identifiesfourchallenges:measuring
carbon,makingpayments,accountabilityandfunding.
Measuringcarbonisatthecoreofcarbontrading.Accuracyin
calculatingthecarboncontentinaforestedareaisimperative.Thisis
whyaREDDactivitymustcomplywithmeasuring,reportingand
verifying(MRV)standards.Hightechnologytoolssuchassatellite
imagingandcomputermodelingareusedtomeasurecarbonstocks.
Aftermeasuringreducedemissions,alsocalledavoideddeforestation,
creditscanbecounted.Thosecreditscanbesoldinaninternational
carbonmarket.Thecreditscanalsobetakentoaninternationalfund
thatprovidesfinancialcompensationtocountriesthatconservetheir
forests.
Whateveroutletisused,REDDprojectsstillhavetocompeteon
economictermswiththedriversofdeforestation,CIFORcontends.
Economicdriversthatdestroyforestsandpeatlandarebusinesses
involvedinlandusechanges.Theyconvertforeststolivestockpasture,
extractiveminingandoilpalmestates,tonamejustthreeenterprises.
Thus,foracarbonmarkettofunctionviably,thecarbonpricemustbe
highenoughtodissuadeinvestorsfrompursuingventuresthatraze
forestsandpeatland.
Internationally,carbonmarketsareknownasemissionstrading
schemes(ETS).TheEUisoneofadozenrecognizedmarkets.The
EUETSstartedin2005with31participatingcountriesandappliesthe
capandtradesystem.Itcoversmorethan11,000factoriesand
installations.
InAsia,JapanandKoreahaveestablishedETS.Indonesiasellscarbon
creditsintheEuropeanandJapanesemarkets.Giventheeconomic
downturninEuropethatcausedanoversupplyofallowances,the
carbonpriceintheEUETShasdroppedfrom30pertonofcarbon
dioxideinApril2006to6inDecember2012.
Meanwhile,IndonesiasowndomesticETSisintheconceptstage.The
CarbonTradeMechanismDivisionoftheNationalCouncilonClimate
Change(DNPI)isworkingonanETSthatitcallstheSkemaKarbon
Nusantara(SKN,ArchipelagicCarbonScheme).TheSKNmakesita
conditionthatforaprojecttoqualifyforcarboncredits,itnotonlyhasto
reducegreenhousegasemissionsbutmustalsoproveitserves
sustainabledevelopment.
Proofofthatcontributiontosustainabledevelopmentisdeterminedin
fiveaspects.Theprojectmustmeetrequirementstiedtonatural
resourcesandtheenvironment,humanresources,economicaffairs,
socialaffairsandtechnology.
Ascredit,compliancecanearntheprojectoneUKN(Indonesiancarbon
unit)forevery1tonofcarbondioxideitsavesfromemission.Onits
website(skn.dnpi.go.id),theSKNworkinggrouphaspostedtwodraft
documentsontheSKNconceptforpubliccomment.
HowsuccessfulIndonesiasETSwillberestsonseveralfactors:the
SKNsinstitutionalsetup,themethodologyadopted,economicstabilityto
ensureadesirablecarbonsellingprice,thecompetitionfromeconomic
driversforlandusechangeinvestmentsalbeitforshortertermprofit,
andtheargumentsagainstcarbonoffsettingfromvocalNGOs.
ThewriterteachesjournalismatDr.SoetomoPressInstitute(LPDS),
Jakarta.
21 Like

Tweet 90

Bagikan
1
Readalso:
EUsetsnewsafeguardsforcarbontrading
Australiaspeedsupcarbondeal
Post Your Say
SelectedcommentswillbepublishedintheReadersForumpageofourprintnewspaper.
1 comment