Indonesia and Japan sign Agreement for Carbon Trading
Indonesia and Japan have signed a Mutual Recognition Arrangement (MRA) for carbon trading, announced at COP29 in Baku. Indonesia’s Ministry of Environment and Forestry stated that the MRA is the world’s first bilateral collaboration model under Article 6.2 of the Paris Agreement. It ensures equity between Indonesia’s and Japan’s carbon credit systems, covering mitigation methodologies, emission reduction calculations, monitoring systems, and carbon credit certification.
Eco-Business, a sustainability intelligence organization, noted that the agreement reflects ASEAN’s growing momentum toward carbon trading, signaling a shift in regional climate strategy. By 2030, offsets from the region could generate up to $10 billion annually. However, Eco-Business cautioned that cross-border trading risks relocating emissions instead of reducing them, potentially enabling high-carbon economies to delay fossil fuel cuts. A robust regulatory framework is critical to ensure carbon trading supports, rather than replaces, efforts to lower emissions at the source.
