PROPOSED IMPLEMENTATION PLAN TO ACCELERATE CARBON MARKET IN INDONESIA TO ACHIEVE NET ZERO TARGET BY 2060

• Main Author: Budiono, Kurniadi
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/70610
• Institution: Institut Teknologi Bandung

Many countries have committed to net zero pledges in 27th Conference of the Parties to reduce their carbon emissions including Indonesia that has pledged to achieve net zero by 2060 and reach carbon neutrality in the forestry sector by 2030. Faced with these challenging transitions, Indonesia needs to secure sizeable financing and technical support to reach its goals. In the other hand, as a developing country, Indonesia needs to balance between sustainability effort and its economic growth that requires lot of energy source that is sufficient and affordable. Innovative method such as carbon market could be explored as alternative financing scheme. Carbon market allow transaction of carbon credits that in returns could be utilized to fund low-carbon project development. As one of the world's lungs, Indonesia contributes 75-80% of the world's carbon credits and provide huge opportunity for Indonesia to unlock its economic potential of carbon market. There are three frameworks that will be used to analyze the business conditions of Indonesia’s carbon market, e.g., PESTLE to analyze the external factors, Porter’s Five Forces to identify attractiveness of carbon market in Indonesia, and carbon market mechanism framework to identify archetypes of carbon market and their key success factors. There are four main categories of carbon market based on regulatory requirement and trade mechanism from emission trading scheme, carbon tax, voluntary carbon market, to internal carbon pricing. Furthermore, carbon market maturity and development framework are being developed to provide insights on what stage is the carbon market in multiple countries. This framework will be based on three key categories: annual CO2 emissions, size of carbon market, and what type of carbon market are available in these countries. Later, best practices from selected countries such as European Union, China, South Korea, and Mexico will be explored to identify the relevant key learning points for Indonesia. Finally, a carbon market roadmap will be developed as a guidance for future implementation including mapping of key stakeholders to be engaged.