(Bloomberg) — Indonesia opened its first carbon exchange as part of a bid to cap emissions and reap the benefits of keeping its tropical forests intact.
The bourse, operated by the Indonesia Stock Exchange, saw 13 transactions covering 459,914 tons of carbon dioxide equivalent on its debut on Tuesday, according to a presentation during the launch ceremony in Jakarta.
In the first phase, trading is open for coal plants generating at least 100 megawatts of power and that are linked to state utility Perusahaan Listrik Negara’s grid, accounting for about 86% of the country’s total installed capacity.
IDXCarbon, as the exchange is named, would allow the government to urge coal plants to cut emissions without hindering economic activity reliant on the source of cheap electricity. The plants will be subject to an emissions budget. If they fall below the cap, the extra carbon credit they earn can be traded on the exchange at an estimated $2 to $18 per ton.
The Southeast Asian nation sees a potential economic gain of 3,000 trillion rupiah ($194 billion) from the nation selling carbon credits, said President Joko Widodo at the event.
“This is just the beginning, so we’re not expecting immediate big interest from the domestic market,” said Paul Butarbutar, executive director at think tank Indonesia Center for Renewable Energy Studies. “But it is hoped that as time goes by, and with better dissemination, the domestic carbon exchange will further grow.”
—With assistance from Eko Listiyorini.