The Indonesian government has firmly warned business actors not to turn the carbon trading mechanism into a mere arena for business speculation. This emphasis was conveyed by the Minister of Environment, Mohammad Jumhur Hidayat, on the sidelines of a mangrove seedling planting event in the coastal area of Labuan Alas, Sumbawa, West Nusa Tenggara, on Tuesday (7/7/2026).
In his statement, Minister Jumhur emphasized that the carbon market is actually a strategic solution to reduce greenhouse gas emissions. Given that the funding required for climate change mitigation in Indonesia reaches a fantastic figure of around IDR 4,000 to IDR 5,000 trillion, it is impossible for the entire funding to be borne by the state budget. Therefore, involving the private sector through the carbon market mechanism is crucial to fill this funding gap.
The scheme promoted by the government requires companies with high emission footprints to compensate by financing ecosystem rehabilitation, such as forests and mangroves. This step is seen as a concrete form of corporate responsibility towards environmental sustainability while also generating carbon credits with economic value.
Furthermore, the government requires this carbon trading scheme to provide direct benefits to the communities surrounding the rehabilitation sites. Minister Jumhur encouraged investors to involve local residents in mangrove planting and maintenance activities. This synergy is expected to create opportunities for "green jobs" or sustainable environmentally friendly employment for coastal communities.
The main principle espoused is climate justice, where the communities at the forefront of guarding the rehabilitation areas must be the ones who feel the positive impact of the carbon trading the most.
