The Contribution of Forest Carbon Trading to Indonesia's Net Zero Emissions Target

Abstract

This study analyzes the contribution of forest carbon trading to Indonesia’s Net Zero Emissions (NZE) target using a qualitative approach involving five key informants, including policymakers, academics, practitioners, private sector actors, and community representatives. The findings reveal that forest carbon trading plays a strategic role in reducing greenhouse gas emissions through forest conservation, restoration, and sustainable land-use management. Carbon trading also generates significant economic benefits by mobilizing climate finance, supporting community livelihoods, and stimulating private sector participation. Additionally, the mechanism strengthens governance through improved monitoring, reporting, and verification (MRV) systems. However, challenges remain, including regulatory uncertainties, technical limitations, market volatility, land tenure issues, and inconsistent community engagement. The study concludes that forest carbon trading has strong potential to accelerate Indonesia’s progress toward NZE, provided that policy harmonization, institutional capacity, and community empowerment are reinforced. These insights offer valuable recommendations for enhancing carbon market effectiveness and supporting national climate goals.