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AEGIS : Journal of International RelationsAEGIS : Journal of International Relations

This manuscript explores Indonesias complex position in the global climate crisis, with the central argument that Indonesias success in climate leadership hinges on bridging persistent tensions between economic priorities and environmental justice. Indonesia faces mounting pressure to balance economic growth with climate commitments. Despite its substantial forest carbon sinks and ambitious net-zero targets, Indonesias reliance on coal and weak enforcement of environmental policies hinder progress. The countrys carbon market (IDXCarbon) and natural resource endowment, especially nickel for EV batteries, position it as a potential green economy leader. However, challenges persist, including low carbon credit prices, fragmented ASEAN markets, and elite-driven economic policies prioritizing coal exports over environmental stewardship. This paper argues that Indonesia can leverage regional cooperation under ASEANs carbon frameworks, align carbon markets with international standards, and negotiate debt-for-nature swaps to strengthen its green transition. Ultimately, while international forums highlight Indonesias proactive climate diplomacy, domestic realities reveal persistent tensions between economic priorities and environmental considerations. Indonesias success or failure in managing this paradox will have far-reaching consequences for its people and the global climate system. The authors conclude that Indonesia must pursue a holistic, inclusive approach integrating political will, equitable financing, and rigorous governance to actualize its green industrial ambitions and establish itself as a leading actor in the Global Souths climate transformation.

Indonesia faces a critical juncture in balancing economic growth with climate commitments, hampered by its reliance on coal and weak environmental enforcement.The nations potential as a green economy leader is evident through its carbon market and natural resources, but challenges such as low carbon credit prices and fragmented regional markets remain.Ultimately, Indonesias success hinges on a holistic approach integrating political will, equitable financing, and robust governance to achieve its green ambitions and establish leadership in the Global South.

Indonesia should prioritize research into the feasibility of establishing a unified ASEAN carbon market, streamlining certification processes and promoting interoperability between existing national schemes to enhance regional carbon trading. Further investigation is needed to assess the potential of debt-for-nature swaps, specifically exploring opportunities to leverage Indonesias natural assets—like its extensive mangrove forests—to negotiate debt relief with creditor nations. Finally, research should focus on identifying and addressing the systemic barriers—such as regulatory capture and conflicting economic interests—that hinder the effective implementation of sustainable policies and impede the transition towards a green economy, ensuring that economic development aligns with long-term environmental sustainability and social equity. These research avenues will contribute to a more comprehensive understanding of Indonesias climate challenges and opportunities, paving the way for informed policy decisions and effective climate action.

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