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Paloma Circles: Dialogue on Carbon

On the morning of 10 March 2023, Paloma Sjahrir Foundation hosted its first Paloma Circles – Dialogue series which aims to connect climate startups in the same sector with each other. For this first event, the dialogue was focused on the Carbon sector. The event was co-hosted by Ecoxyztem, a venture builder for climate tech startups and P4G Partnerships.

The purpose of the forum was to provide a platform for participants to engage in discussions, exchange ideas, and expand their networks in order to promote the development of carbon-related businesses in Indonesia. The discussion forum was attended by various stakeholders, including startups, industries, and law firms, among others.

As climate change escalates over the years, many countries are increasingly adopting measures to reduce greenhouse gas emissions and mitigate its environmental impact. Among these measures, carbon credit programs have emerged as a promising mechanism to incentivize companies and nations to cut down their carbon footprint.

Indonesia is home to a rich biodiversity with diverse ecosystems but is also one of the world’s largest gas emitters due to deforestation and land-use changes. This is also on the back of Indonesia’s growing economy, which led energy demand to rise and having coal stepped in to fill the gap, subsequently making Indonesia relatively highly dependent on fossil fuels to support its growth. In an effort to address such issues and encourage sustainable practices, Indonesia has declared a target of net-zero emissions by 2060 as part of its development goal to become an advanced economy. Yet, implementation complexities often raise doubts on projects’ integrity and transparency. Lack of standardized measurement systems and difficulties in verification hamper accurate assessment of emissions reductions, leading to concerns on project integrity issues.

OJK announced that they will release regulations on carbon exchange in June 2023 and is targeting the trading or operation of the said carbon exchange to take place in September 2023. Earlier this month, the Indonesian government made a significant decision to permit foreign entities to participate in the country’s carbon market by purchasing credits. This move opens up opportunities for multinational corporations and institutions to leverage Indonesia’s vast carbon trading potential.

At the Paloma Circle Dialogue on Carbon players in the sector raised common challenges, such as:

  • Regulatory uncertainty
  • Gap in knowledge and communication among regulators
  • Enhanced collaboration is needed to bridge the gap between the government and private sector
  • Lack of talent
  • Unsynchronized established standards
  • Perceptions of industry integrity due to lack of public education on the topic
  • Insufficient integration within the industrial supply chain

PSF moderated the dialogue and players brought forth ideas for accelerating the development of carbon credit schemes in Indonesia, including:

  • Collective advocacy towards regulators
  • Engage and educate potential future leaders
  • Access to Indonesian Environment Fund (BPDLH) to initiate small-scale pilot projects
  • Advocate for indonesia scientific advisory on carbon
  • Encourage contribution from industry’s stakeholders
  • Creating a two-layer carbon exchange platform
  • Foster research by think tanks to drive policy change

The Paloma Sjahrir’s objective through this Paloma Circle Dialogue on Carbon is to disseminate the outcomes of our discussions and broader ideas on addressing these challenges, to raise awareness and provide genuine information to the general public. In doing so, we hope to make a meaningful contribution to the global efforts to mitigate climate change.

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