Indonesia: Indonesia's Carbon Economic Value (NEK) instrument is expected to draw up to US$5.8 billion in green investment, aiming to cut down greenhouse gas emissions by roughly 570 million tonnes of carbon dioxide equivalent. Coordinating Minister for Food Affairs, Zulkifli Hasan, emphasized the need for innovative financing to bolster climate action, asserting that the NEK instrument is vital for driving green investment and aiding the country's emission reduction efforts.
According to BERNAMA News Agency, Zulkifli Hasan highlighted the broader implications of climate change mitigation, stating it is not just an environmental agenda but a crucial component of economic resilience, food security, and national sovereignty. Speaking at the launch of the Indonesia Forestry Carbon Centre, he noted that climate action currently constitutes only 3.5 percent of Indonesia's annual state budget, with a mere 0.7 percent dedicated to forest rehabilitation and conservation. This situation underscores the need for innovative financing mechanisms beyond relying solely on public funds.
One of the government's primary objectives is the introduction of the Carbon Unit Registration System (SERUK) on July 9, which Zulkifli described as the backbone of Indonesia's carbon infrastructure. This system is expected to play a significant role in facilitating the country's carbon market.
Furthermore, Presidential Special Envoy for Energy and Climate, Hashim Djojohadikusumo, revealed the government's plan to rehabilitate 12.7 million hectares of degraded forest over the coming years. This initiative, started under President Prabowo Subianto, could become a new source of carbon market projects. Investors are invited to finance the restoration of these degraded forests, with the potential to earn carbon credits through Indonesia's carbon trading mechanism.
Investors are encouraged to participate in the reconstruction and rehabilitation efforts, with the promise of receiving carbon credits as a return on their investment through the existing carbon mechanisms.