Strengthening conditions to attract finance and investment in clean energy

Strengthening conditions to attract finance and investment in clean energy

Indonesia's emissions trading system: Focus group discussions, November 2021 to May 2022

In order to assist the efforts of the Indonesian Government to develop a domestic emissions trading system (ETS), the OECD CEFIM, IEA and Indonesia’s Ministry of Energy and Mineral Resources hosted a series of four technical focus group discussions (FGD)s. Building on international experience and OECD/IEA experience, these FGDs provided a deep-dive into a variety of elements critical to the development of effective ETS schemes, each relevant to the Indonesian context. This series of FGDs brought together stakeholders from Indonesia and leading international experts to share their experience and lessons learned in the development, design and implementation of ETS. These events took place between November 2021 and May 2022.

FGD I examined Indonesia’s goals and early progress on the implementation of the ETS trial and different international approaches to designing and implementing ETS schemes in the power sector. During the discussion, country experts from China and Korea shared their respective countries’ experiences designing and implementing such schemes as well as key lessons learned.

FGD II looked at how other ETS schemes have addressed some early challenges in the design and implementation phase including determining the emissions cap, how the price will be determined and evolve, and the options of recycling the revenues raised from the scheme. Experts from the European Union, Poland and the United Kingdom shared their experience in technical design, monitoring ETS development and stimulating industry participation.

FGD III focused on implementation at the ETS pilot and early phases with a focus on design elements that can enhance participation. It also examined the impact of a carbon tax on the design and operation of the ETS. During the discussion, country experts from China, the United Kingdom and the European Union shared their insights as well as private sector perspectives on carbon tax versus ETS in carbon pricing policies.

FGD IV discussed regulation and the role of the financial sector in Indonesia’s emissions trading scheme and also looked at linkages to international carbon markets. The discussion included an overview of the Paris Agreement Rulebook as outlined under Article 6.  During the discussion, country experts from South Africa, Japan, New Zealand and South Korea discussed together with different Indonesian government agencies their experience on linking with other carbon markets, including institutional arrangements, monitoring and verification systems, and certification of carbon offsets.

Each of the four FGDs ended with a dialogue, convening representatives from government institutions, development partners and other relevant stakeholders to discuss opportunities that could be adapted to the Indonesian context.



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