Reorienting Climate Control Policy

The post-2024 election government needs to continue, as well as improve, the success of mitigation and adaptation in the land sector.

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Reorientasi Kebijakan Pengendalian Iklim

HERYUNANTO

Illustration/Heryunanto

The 28th Climate Change Conference or 28th Conference of the Parties which took place in Dubai, United Arab Emirates, at the end of 2023, leaves a lot of uncertainty, especially those related to phasing outfossil fuel-based energy.

Carbon has become a commodity or trade item that is closely related to lifestyle and vulnerable to politicization. Therefore, it is not surprising that meetings such as the Conference of the Parties (COP) become a bargaining platform like cattle trading, in which only large traders have a strong bargaining position.

For most COP members, the most effective way to improve their bargaining position is to improve the quality of carbon. This means that carbon credits have high technical and social credibility, making them more likely to be priced at a high value.

In addition, it is time for us to read the behavior of the market, including the position of each party in the COP.

Nature based solutions

Among a series of climate change mitigation solutions, nature-based solutions are known. This means that nature and the resources contained in it are endeavored so that they do not become sources (sources) of greenhouse gas (GHG) emissions, or even become sinks (sinks) of GHG whose concentration is in the atmosphere is increasing.

The characteristics of high quality nature-based carbon credits are when the project can prove that "leakages" can be overcome. This is demonstrated clearly and transparently through the transparency framework (enhanced transparency framework) which will be enforced globally.

Carbon has become a commodity closely related to lifestyle and susceptible to politicization.

Projects must also be designed and implemented transparently and supported by the community—so as not to violate their human rights—and maintain the biodiversity that local communities rely on. The latter is actually not a matter for the Climate Change Convention, but is indeed a reality in voluntary markets (voluntary markets).

The implementation of voluntary market mechanisms has been widely carried out in developing countries. The land sector opens up many opportunities for developers and investors to work together with owners (hosts), whether government, private sector or civil society. The value or price of carbon per unit mass is usually very low, namely no more than 5 US dollars per ton of CO₂.

This practice must end, including by Indonesia which has learned a lot and has sufficient capacity to produce high quality carbon. Indonesia must sell dearly in the free market for those who want to reduce their emissions as an obligation (compliance markets).

The carbon market (carbon exchange) mechanisms and infrastructure that have been built must be immediately utilized amidst the chaos of the election.

Natural-based carbon is very vulnerable to leakage or damage, but can provide large co-benefits.

Producing carbon credits from the land sector, especially high quality ones, is not an easy or cheap matter. Therefore, the selling price of natural-based carbon must also be expensive. Science provides enough reason to put a price tag of 25-30 US dollars per ton of CO₂.

Energy sector

The dead end and major obstacle towards the zero emissions target experienced at COP28 Dubai is the energy sector which is the main contributor. Industrial countries and fossil fuel-based energy producers (BBF), including the hosts, are still trying to buy time.

For this reason, developing countries that are ready can actually "sell high" and be skilled in taking advantage of this valuable opportunity. Moreover, the United States (US), which is not yet ready to reduce emissions from the energy sector, is propping up the European Union by buying time.

The US is promoting the voluntary market, especially for nature-based carbon credits, and this is something that Indonesia should take advantage of.

Considering the high dependency of the transportation and power generation sub-sectors on fossil fuels, especially coal, Indonesia needs to work extra hard in the energy sector. Domestic carbon market players, such as PLN, Pertamina, and private sector, can build partnerships in the primary market before Indonesia steps out and competes in trading carbon credits in the secondary market, which has a higher value.

Energy policy that is integrated with climate control requires new infrastructure so that emission reductions formulated in national contribution provisions (nationally determined contribution, NDC) do not sacrifice national development contained in the National Long Term Development Plan (RPJPN), including economic growth of 5-6 percent.

Considering the dependency of the transportation and power plant subsectors on fuel, specifically coal, which remains very high, Indonesia must work extra hard in the energy sector.

Transition

The state organizers after the 2024 election need to continue, even increase, the success of mitigation and adaptation in the land sector.

The energy sector that still lags behind requires strengthening through the development of regulatory frameworks and institutions that directly address climate change issues related to national energy policies. Both need to be addressed in a integrated manner within the new cabinet infrastructure.

The ministry in charge of forestry can now concentrate and focus on the management of production forests and the supply chain of forest products industry, as well as social forestry which is an integral part of improving the community's economy.

The conflict of interest in development to regain the glory of the industry from forest products and conservation of sensitive essential areas can be avoided. Therefore, we will no longer hear the term land conversion, which has legally consumed tens of millions of hectares of forest areas.

Meanwhile, the ministry that handles climate and energy issues will become the guardian (custodian) that looks after the land sector that is included in the conservation area category which has carbon reserves and high quality biodiversity, including peat and mangroves.

Policy and practices for reducing emissions through this sector can be continued and improved. Meanwhile, this new infrastructure must be mandated to increase the share of new and renewable energy in the energy mix that is still dominated by fossil fuels.

Golden Indonesia in 2045 will have industries that generate high foreign exchange and clean energy that does not burden economic growth because everything is based on high quality human resources.

Preserving natural resources is a sustainable asset to be passed on to future generations, as it is no longer used as the basis of development.

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Daniel Murdiyarso, IPB Professor, CIFOR-ICRAF Principal Researcher, Chair of AIPI