Climate change demands swift and measurable action to reduce greenhouse gas (GHG) emissions. Community-based carbon projects offer a solution that combines climate mitigation with local welfare improvement: protecting forests, rehabilitating peatlands and mangroves, or adopting regenerative agricultural practices that store carbon while increasing farmers’ income. This article assesses whether Indonesia’s current environmental policy framework is adequate to support such initiatives, identifying opportunities, implementation challenges, and concrete recommendations for stakeholders.
- Background of Indonesian Environmental Policy
- Potential for Community-Based Carbon Projects
- Policy Readiness Analysis
- Policy and Practice Recommendations
Background of Indonesian Environmental Policy
Environmental policy development in Indonesia over the past two decades has laid the legal foundation for carbon projects. Law No. 32 of 2009 regulates environmental protection and management, while Presidential Regulation No. 110 of 2025 introduces a clearer framework for carbon economic value and mechanisms that enable participation from regional governments and non-state actors in national and international carbon markets. In addition to national authorities (Ministry of Environment and Forestry, regional agencies, and managing bodies), technical alignment with international standards such as Gold Standard and Verra opens verification opportunities and access to voluntary markets for projects that meet transparency and additionality criteria.
Potential for Community-Based Carbon Projects
Community-based projects essentially leverage local assets and traditional knowledge. The main types that are realistically feasible for communities include:
- Conservation and protection of community forests to prevent emissions from land degradation or conversion.
- Mangrove and peatland restoration that stores carbon in biomass and soil.
- Regenerative agriculture and agroforestry that increase soil carbon stocks while boosting productivity.
- Small-scale energy efficiency projects and biomass fuel substitution with cleaner technologies.
Technically, measurement, reporting, and verification (MRV) methodologies are now available in the form of national guidelines and adaptations of international protocols, allowing communities to design baselines and calculate emission reductions or carbon sequestration that can be converted into carbon credits—provided they are supported by parties with MRV expertise.
Policy Readiness Analysis
Strengths:
- Regulatory certainty: Presidential Regulation 110/2025 establishes carbon economic value as a policy instrument, providing a legal basis for incentive schemes and carbon transactions involving sub-national actors.
- Connectivity to international standards: Recognition of international standards facilitates access to voluntary markets and potential international financing.
- Initial support programs: The central government and several NGOs/international organizations have launched pilot programs to build MRV capacity and project design.
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Weaknesses and implementation barriers:
- Limited local technical capacity: MRV design, baseline development, and verification processes require technical expertise that communities often lack without external assistance.
- Access to initial financing: Many projects require upfront capital (surveys, measurements, certification), which poses a barrier for poor communities or village institutions.
- Equity and benefit-sharing: Without strong governance mechanisms, there is a risk of marginalizing vulnerable groups (indigenous peoples, smallholder farmers) in the distribution of carbon credit benefits.
- Administrative and bureaucratic complexity: Project registration, inter-agency coordination, and policy synchronization between central and regional governments still need simplification to avoid burdening local actors.
- Risk of greenwashing and benefit leakage: Oversight is needed to ensure emission reduction claims are truly additional and do not replace mitigation commitments in other sectors.
Policy and Practice Recommendations
To translate regulatory readiness into real implementation, the following priority recommendations can be adopted by relevant actors:
- Strengthen MRV capacity at the local level: Provide standardized training modules and simple technical packages for carbon stock calculation and data collection.
- Initial financing schemes and certification subsidies: Governments or donors can cover upfront costs to facilitate community projects until they generate sellable credits.
- Participatory governance mechanisms: Require inclusion of indigenous communities, transparent benefit-sharing agreements, and conflict mediation as part of the Free, Prior, and Informed Consent (FPIC) process.
- Simplify administrative procedures: Establish one-stop services at the provincial or district level for community project registration, with step-by-step guidance.
- Partnership networks: Facilitate collaboration between communities, universities, NGOs, and verifiers for technical knowledge transfer and market access.
- Standardize social and environmental sustainability practices: Ensure projects meet non-negotiable criteria such as biodiversity protection and local human rights safeguards.
Conclusion
Indonesia’s policy framework shows significant progress with legal foundations and efforts to integrate international standards, making opportunities for community-based carbon projects increasingly viable. However, transformational readiness still depends on strengthening technical capacity, access to initial financing, and equitable governance mechanisms. With focused interventions—MRV training, certification subsidies, bureaucratic simplification, and community rights protection—community-based carbon projects can become effective instruments for achieving mitigation goals while enhancing local welfare.
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Author: Nadhifa
Editor: Sabilla Reza
References:
Badan Pengelola Lingkungan Hidup. (2025). Peraturan Presiden Republik Indonesia No. 110 Tahun 2025 tentang Nilai Ekonomi Karbon. Republik Indonesia.
Intergovernmental Panel on Climate Change. (2021). Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the IPCC. Cambridge University Press.
Pemerintah Republik Indonesia. (2009). Undang Undang Republik Indonesia No. 32 Tahun 2009 tentang Perlindungan dan Pengelolaan Lingkungan Hidup. Lembaran Negara Republik Indonesia.
Sukhdev, P., & Reid, R. (2020). Community-based natural resource management and carbon markets: lessons learned. Journal of Environmental Policy and Planning, 22(4), 345–361.