TEMPO.CO, Jakarta - The energy specialist at the Canadian Embassy in Indonesia, Dicky Edwin Hindarto, said companies engaging in the green paradox scheme in carbon trading are inefficient and incur high costs.
The green paradox occurs when a business entity commits to reducing emissions by solely purchasing carbon credits. "The green paradox is inefficient and very costly," said Dicky during a discussion on energy transition in Jakarta on Monday, June 30, 2025.
According to Dicky, in a well-designed carbon project, companies or industries cannot sell all their carbon credits. For example, he said, if a company owns 100 kilotons of carbon credits, or the equivalent of 100 thousand tons of CO2, the carbon trading scheme can limit the amount that can be traded.
"The scheme can impose limitations, not everything has to be traded. Around 80% or 85% would serve as a safeguard," he said.
Dicky mentioned that currently, international carbon transactions can no longer be carried out through carbon credit transfers. "Adjustments must be made. In Indonesia or any country, when exporting carbon, there must be a corresponding adjustment," he said.
According to Dicky, the best approach for business entities committed to reducing emission production is to apply Environmental, Social, and Governance (ESG) standards. Subsequently, the company can improve energy efficiency.
The third and fourth steps would involve renewable energy and carbon sequestration. "Then, we can at last engage in carbon offset. Let's do good first, instead of sanctify our sin with the costly carbon credits," he said.
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