The Peatland Restoration Agency (BRG) has estimated Indonesia’s peat-land could generate a revenue of $16 billion (Rp 214 trillion) from carbon trading that should help the country to preserve its delicate biosphere and plug the deficit in its external balance. (Antara Photo/Sheravim)
Carbon Sales Could Generate $16b in Foreign Exchange: BRG
BY :RH NAPITUPULU
DECEMBER 25, 2016
Jakarta. The Peatland Restoration Agency, or BRG, has estimated Indonesia’s peatland could generate a revenue of $16 billion (Rp 214 trillion) from carbon trading that should help the country to preserve its delicate biosphere and plug the deficit in its external balance.
“The carbon price in the Californian market is around 10 to 15 dollars per ton,” BRG head Nazir Foead told state news agency Antaranews.com on Saturday (24/12). “In Sweden the price for carbon per ton reaches up to $168, so the potential foreign exchange for peat lands could reach up to Rp 214 trillion.”
According to Nazir, this potential should be optimized so that Indonesia can achieve multiple outcomes. First, Indonesia can reach carbon emission reduction target of 29 percent in 2030, and secondly, exploit carbon sales for foreign exchange to a number of foreign countries.
This way, Nazir said, Indonesia could be the world’s center for peatland restoration and climate change mitigation.
“People could then come to Indonesia not just to learn [how to restore peat], but also for consultation,” Nazir said. “We can export knowledge, human resources and carbon out of the country, as a form of peat land restoration in the country.”
He said selling carbon to foreign countries is a step in accordance with the Paris Agreement, which was signed in 2015 by United Nations State Members to reduce carbon emissions.
Nazir added that every hectare of peatland has a carbon storage 100 times higher than tropical rainforests.
As Indonesia has a goal of restoring 2.4 million hectares of peat land by 2020, Nazir believes that the outlook for foreign exchange from carbon sales is a positive.
Indonesia's current account deficit — the broadest ledger of a country’s goods and services trade with other countries, as well as remittances and investment income — was at $4.5 billion or equal to 1.8 percent of its gross domestic product (GDP) in the July-September period.
That narrowed from $5 billion shortfall in the second quarter or 2.2 percent of the GDP, thanks to rising prices of the country's main commodities like coal and palm oil in the global market.