Vol. IV No. 1 | March 2023

Ahmad Hidayat (Associate at Department of International Relations, Universitas Indonesia. Policy and Diplomacy Specialist at Carbon Policy Lab, CarbonEthics Indonesia)


Carbon trading or emission trading system (ETS) has been a hot topic for climate change mitigation and adaptation in recent years; commencing within the Global North by European ETS in 2005, now moving forward to the Global South market and economies like Mexico ETS 2020, China ETS 2021, and Indonesia Energy-subsector ETS in 2023. After the Paris Agreement in 2015, the Global South changed its perspective in terms of becoming more susceptible to market mechanisms and lessening criticism/skepticism towards Global North’s intention to commercialize climate issues. It allows parties to formulate their action based on their needs and domestic capacity (Nationally Determined Contributions/NDC) to meet net zero. Green capitalism favors this approach, emphasizing on the market capacity to correct environmental externalities as firms will be keen to follow the high environmental standard while maintaining high productivity. However, Green Capitalism receives criticism from the socio-ecological justice perspective that underlines the uncontrollable nature of the capitalistic approach which tends to exploit the system’s weaknesses for profiting firms, and disregard the protection for marginalized minority, and non-human organism from exploitation. Regardless, the fast progression of global economic dynamism today  evokes people-environment-economy nexus relations and still needs further scrutinization for enhancement.

Keywords: Global South, Carbon Trading, Climate Change, Green Capitalism, Socio-Ecological Justice