Singapore and Indonesia have entered into a Memorandum of Understanding (MoU) regarding climate change and carbon credits.
Currently, Singapore is the center of commodity trading in Asia. Indonesia is among the biggest carbon credit suppliers in the region. It is also home to one of the earth’s biggest rainforests.
The agreement between the two countries allows them to collaborate on carbon-related projects. Through the deal, they can create projects that boost international carbon markets. As a result, it helps them meet their carbon emission reduction goals.
Tidbits of Singapore and Indonesia Carbon Trading Deal
The MoU will boost cooperation between Singapore and Indonesia in four major areas:
- Carbon pricing and markets
- Nature-based solutions and ecosystem-based approaches
- Clean technologies and solutions
- Green and blended finance
As for blended finance, it refers to a combination of capital sources supporting sustainable projects. Their carbon trading agreement includes developing pilot projects in those areas. It also involves research collaborations and technical exchanges.
The deal will support research financing solutions in several areas of the industry. These include carbon credit projects, carbon capture and storage, and regional decarbonization.
What The MoU Will Entail
Representatives from both countries show commitment to promoting the goals of the MoU. As proof, they have issued a joint statement that seals their pledge. There will also be annual ministerial meetings and a bilateral Working Group.
Many stakeholders are involved in Singapore and Indonesia’s carbon trading deal. But government agencies are taking the lead.
The tie-up will bring more jobs and growth opportunities to Singapore. Also, it will provide greener solutions for a sustainable future. The minister said that it would help the nation achieve its net-zero goals by 2050.
The success of the MoU will advance Indonesia’s Blended Finance Alliance. It has been developed through the G-20 framework which Indonesia is the leader. Its major task is to gather funds for climate change and UN SDG-related projects.
The pooled funding offers capital for Indonesia’s environmental rehab and restoration projects. The funds will also support the replacement of coal-fired power plants in Indonesia. They will be replaced by renewable energy sources.
What to Expect
Under this agreement, Singapore and Indonesia are expected to work closely. Their exchanges on carbon trading and carbon pricing are promising.
Singapore stated that their carbon tax for one ton of carbon emission will increase a lot. So, from $5 this year, it will become $80 by 2030. Likewise, Indonesia has regulations on carbon emission prices and trading carbon.