Jakarta (ANTARA) - Special presidential envoy for the Global Blended Finance Alliance (GBFA), Mari Elka Pangestu, has underlined the significance of carbon trading to support climate financing.
Creating a market for carbon trading is expected to attract private sector investment and thereby, contribute to advancing the energy transition, she explained.
"The core of climate finance mostly requires the private sector because 75 percent of financing comes from the private sector," she said after a roundtable discussion on green financing at the Indonesia International Sustainability Forum (ISF) 2024 here on Friday.
The discussion highlighted efforts made by the financial sector to realize green financing, such as the rules related to the Indonesian Taxonomy for Sustainable Finance regulated by the Financial Services Authority (OJK).
According to Pangestu, the taxonomy could provide a classification of sectors driving decarbonization. In the future, she said, an agreement on the classification of project taxonomy will be needed to enable financing providers to determine the sectors driving the green economy.
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Based on OJK data, the volume of carbon exchange trade reached 572,064 tons of carbon dioxide equivalent (tCO2e) as of April 30, 2024. Its accumulated trading value was Rp35.31 billion, with the regular market accounting for 27.9 percent of the transaction value, the negotiation market 19.76 percent, and the auction market 52.34 percent.
As of March 28, 2024, the number of licensed service users, trading volume, and accumulated trading value showed an increase, though it was not significant. The Indonesian government has emphasized its commitment to cut emissions by 912 million tons of CO2 by 2030 in the Enhanced Nationally Determined Contributions (ENDC) document.