REFORMING INDONESIA'S CARBON TRADING FRAMEWORK TO ACHIEVE ECONOMIC AND ENVIRONMENTAL SUSTAINABILITY
This study investigates establishing a carbon trading mechanism in Indonesia through a carbon exchange, driven by global climate change commitments. It underscores the need to update carbon trading regulations to support green economy initiatives, with a focus on Indonesia’s international agreements such as the Kyoto Protocol and the Paris Agreement. Utilizing normative and conceptual research methods, the study highlights the benefits of a regulated carbon market, including price transparency and efficient carbon credit transactions, compared to voluntary markets. It discusses the roles of the Indonesian government and the Financial Services Authority (OJK) in managing the exchange. The paper proposes an ideal regulatory framework to align with sustainable development and human rights goals and recommends establishing an operational carbon exchange under the Indonesian Stock Exchange, contributing valuable insights into integrating carbon trading with Indonesia’s financial and environmental strategies.
Carbon Trading Mechanism; Carbon Exchange; Green Economy Initiatives; Regulatory Framework; Indonesia.