Universitas Gadjah Mada
Faculty of Economics and Business

Indonesia plans to implement a carbon trading scheme to reduce carbon emissions and achieve sustainable development goals. Indonesia will be the fourth country in Southeast Asia to implement such a scheme after Malaysia, Singapore, and Thailand. This step is reinforced by establishing the Indonesian Carbon Exchange (IDXCarbon) on September 26, 2023. IDXCarbon will be organized by the Indonesia Stock Exchange (IDX) under the Financial Services Authority's (OJK) supervision.

In his speech at the National Green Economy Seminar at the Learning Center Building FEB UGM on Friday (08/11/2024), Inarno Djajadi, Chief Executive of the Capital Market, Derivatives and Carbon Exchange Supervisory Division at OJK, discussed the importance for companies to focus not only on profitability but also on ESG (Environmental, Social and Governance) principles in their business activities. According to him, investors are becoming increasingly selective in selecting companies to fund, so companies that do not implement ESG principles will find it challenging to attract investors.

Regarding the newly inaugurated President of Indonesia's plan to establish the Climate Change Control and Carbon Trading Management Agency (BP3I-TNK), Inarno hopes this will improve coordination in implementing carbon trading in Indonesia. In addition, Indonesia has enacted OJK Regulation (POJK) No. 14 of 2023, which regulates carbon trading through the Carbon Exchange.

Finally, Inarno added that the trading value of Indonesia's carbon exchange is still far from its maximum potential. However, this is normal, as Indonesia still needs a solid carbon market ecosystem. "I hope that with the support of academics and students, the formation of a carbon market ecosystem in Indonesia can be accelerated," he concluded.

Reportage: Najwah Ariella Puteri

Sustainable Development Goals