Dessi Yuliana, CarbonX’s Investment Director, was invited as one of the speakers in Bank Indonesia Institute (BI Institute) event on Green Economy and Finance, held virtually on April 12 2023.

Throughout the session, various features, mechanisms, and developments revolving around voluntary carbon market was discussed, such as the concept of additionality, the role of standards, and the success stories of projects in Indonesia already issuing carbon credits.

There are several types of projects able to be developed in the voluntary market, yet for this occasion the highlight was on the nature-based solutions for one simple reason: Indonesia is home to the third largest tropical rainforest in the world. The implementation of carbon projects in Indonesia could drive local economies as well, considering one of the key features of carbon project is the mandate of empowering local communities through benefit sharing mechanism. And given forecast of the credit price, there is an opportunity up for grabbed for private sector to develop nature-based carbon projects in Indonesia.

However, several risks are also identified in voluntary carbon market. Top of the list would be the regulatory aspects, which sometimes still unable to differentiate between compliance and voluntary market. Carbon market projects is still at an infant stage, and it is still long way to go before projects could request funding from financial institutions. Moreover, there is also the risk of carbon credits being overly commoditised, which then could compromise the integrity of the market.

Exciting exchanges of ideas also took place during the session, specifically on how private sector could collaborate with government and leverage the opportunity presented by the rapid development of voluntary carbon market. CarbonX recognises that both private sector and government still on the learning process on this matter. In time all stakeholders would be on the same page, and eventually conclude that voluntary market projects and the attempt of realising NDC target could go hand-in-hand.

Closing the session, CarbonX emphasised that the time when all enabling conditions are available for private sector to be actively involved in climate actions have finally come. It would be a misstep to postpone actions and miss this window of creating real climate impacts at both the national and local level.