The Ministry of Forestry (Kemenhut) is strategically developing diverse funding schemes to embark on the ambitious rehabilitation of 12 million hectares of critical land across Indonesia. This monumental initiative directly supports President Prabowo Subianto’s significant commitment, articulated during the 30th Conference of the Parties (COP30) on Climate Change held in Brazil, underscoring Indonesia’s dedication to environmental restoration.
This extensive rehabilitation program is designed to leverage a multitude of financial resources. Deputy Minister of Forestry, Rohmat Marzuki, highlighted that while the State Budget (APBN) will serve as a foundational funding pillar, it alone cannot fully address the vast requirements of restoring critical land. The sheer scale of the task, with degraded land parcels spread both within and outside designated forest areas, necessitates a broader approach.
Recognizing the limitations of national coffers, the government is proactively implementing a blended finance model. This innovative approach seeks to engage a wide array of stakeholders, ensuring comprehensive support for the recovery of degraded landscapes. Rohmat emphasized on Wednesday, November 26th, that approximately 50% of critical land lies outside forest zones in areas designated for other uses (APL), placing significant rehabilitation responsibility on regional governments. Consequently, beyond central and regional government allocations, the strategy also involves increasing private sector participation through Corporate Social Responsibility (CSR) programs and fostering community self-reliance in rehabilitation efforts.
A significant opportunity for bolstering these efforts emerges from climate finance, particularly through the burgeoning global carbon trading market. Indonesia is uniquely positioned with a substantial potential of approximately 13 million tons of CO2 equivalent in forestry carbon credits. These credits can be issued and actively traded on the international market, offering a powerful avenue for attracting crucial investment.
The Ministry aims to harness this potential by attracting international commitments to aid in the rehabilitation of Indonesia’s forests and critical lands through robust carbon credit schemes. According to Rohmat, Indonesia’s carbon credits are expected to command a competitive price due to their origin from high-integrity projects. These include vital contributions from the forestry sector and the significant potential of blue carbon initiatives in the nation’s extensive coastal regions.
Furthermore, future high-integrity carbon credits are anticipated to arise from Indonesia’s ongoing transition towards renewable energy. While a fixed price for these carbon credits has yet to be established, the government remains confident in achieving high valuations. This optimism stems from the commitment to offering only “high-integrity carbon,” a premium asset in the global effort to combat climate change and drive sustainable environmental recovery.
Summary
The Ministry of Environment and Forestry is developing diverse funding schemes to rehabilitate 12 million hectares of critical land across Indonesia, an initiative supporting President Prabowo Subianto’s commitment at COP30. While the State Budget serves as a foundational pillar, the program necessitates a broader blended finance model involving regional governments, the private sector through Corporate Social Responsibility, and community participation. This comprehensive approach aims to restore degraded landscapes both within and outside designated forest areas.
A significant funding avenue emerges from climate finance, especially through the global carbon trading market. Indonesia holds substantial potential with approximately 13 million tons of CO2 equivalent in forestry carbon credits, available for international trade. These high-integrity carbon credits, derived from forestry and blue carbon projects, are expected to command competitive prices, attracting crucial investment for environmental restoration efforts.
