Indonesia is uniquely positioned to lead a new Global South negotiating bloc to protect the world’s tropical rainforests, four years after Indonesia, Brazil, and the Democratic Republic of Congo pledged to cooperate at the 2022 G20 summit in Bali. Together, these three nations hold more than half of the planet’s tropical forests, yet they continue to struggle with meager international aid, heavy foreign debt, and low carbon-offset pricing.
The Financial Pressures Hindering Forest Protection
The core challenge for tropical forest nations remains a harsh economic reality: they are asked to keep vast ecosystems standing for the global good while lacking internal capital to offset the economic sacrifice. In April, Indonesia’s finance minister warned that high oil prices could push the national budget deficit to 2.9% of the economy. Meanwhile, the Republic of Congo, which owes about US$5 billion abroad, is exploring a deal to cancel part of its debt in return for forest protection.
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International aid has historically fallen short of addressing these structural deficits. Data from the Center for International Forestry Research reveals that between 2008 and 2017, the Congo Basin captured a meager 11% of international tropical forest financing. Southeast Asia secured 55% of those funds, while the Amazon region received 34%. Financial valuation models for avoided emissions remain severely skewed. A 2022 study found that Norway paid Indonesia roughly $1 per tonne of carbon emissions avoided, falling well below Norway’s stated rate of $5 per tonne.
A new multilateral funding mechanism aims to address these valuation disparities. Launched in Brazil last year, the Tropical Forest Forever Facility plans to disburse annual payments for every hectare of preserved forest. The vehicle has raised $7.3 billion from participating governments, though disbursements are not expected to begin before 2028. Significantly, both Brazil and Indonesia have committed $1 billion each to the fund, outpacing several wealthy donor nations that pledged only a few million dollars.
| Country | Tropical Forest Share | Pledge to Forest Fund | Key Economic Pressures |
|---|---|---|---|
| Indonesia | Major Regional Share | $1 Billion | Budget deficit pressures (2.9% projected) |
| Brazil | Amazon Basin Holder | $1 Billion | Satellite tracking and basin coordination |
| Democratic Republic of Congo | Congo Basin Holder | Pending Contribution | Foreign debt load (~$5 Billion) |
Bridging the Amazon and Congo Basins
Indonesia brings critical experience to the table, having worked closely with Norway on forest payment frameworks and navigating the pitfalls of carbon-offset transactions. It has also implemented domestic reforms, granting local villages legal rights to manage state forests and deploying new strategies to combat peat fires. By leveraging its position on the board of the Tropical Forest Forever Facility alongside Brazil and the Democratic Republic of Congo, Indonesia can help unify fractured bilateral negotiations.
Bhima Yudhistira Adhinegara, executive director of the Center of Economic and Law Studies (CELIOS), and Muhammad Zulfikar Rakhmat, director of the China-Indonesia and MENA-Indonesia desks at CELIOS, emphasize that a unified South-South bloc must center on three critical pillars. First, finance structures must provide grants rather than loans that compound national debt, ensuring payouts fully offset the opportunity costs of clearing land. Second, member states must enforce standardized safeguarding rules to protect indigenous populations, fulfilling the fund’s mandate to direct 20% of payments to indigenous peoples and local communities. Third, the bloc must establish a baseline minimum price for carbon results so that avoided emissions in Borneo or the Congo Basin are not undervalued compared to European offsets.
Beyond financial bargaining, the coalition serves as an exchange network for practical governance. Brazil contributes satellite tracking methods for monitoring forest loss, while Congo Basin nations offer models for community-led conservation.
The Diplomatic Test at COP31
As the United Nations climate summit, COP31, opens next month in Antalya, Indonesia faces a clear opening to consolidate these disparate nations into a single negotiating bloc. Holding more than half of the world’s vital tropical forests gives these countries leverage. If they succeed in speaking with one voice, they may finally secure the financial autonomy required to keep their canopies standing.
