Indonesia, explained.
Conservation forest at Rantau Panjang, Eastern Aceh province, Indonesia (Chaideer Mahyuddin/AFP via Getty Images)
Indonesia values the forests, but can it fund the trees?
Jakarta is buying influence in the new climate order.
Indonesia, explained.
Conservation forest at Rantau Panjang, Eastern Aceh province, Indonesia (Chaideer Mahyuddin/AFP via Getty Images)
Jakarta is buying influence in the new climate order.
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Indonesia values the forests, but can it fund the trees?Indonesia values the forests, but can it fund the trees?
Brazil’s President Luiz Inácio Lula da Silva met with Indonesian President Prabowo Subianto at the Merdeka Palace in Jakarta last week. This bilateral engagement sought to strengthen relations between the two nations, formalised by eight memorandums of understanding in agriculture, defence, technology, and energy, valued at more than US$5 billion.
While these agreements primarily reflect cooperation on trade and development, the meeting served as a diplomatic platform to discuss Brazil’s role in advancing global climate change commitments and forest management. Brazil is set to host the United Nations Climate Change Conference (COP30) that will be held from 6 to 21 November 2025 in Belém. Prabowo endorsed Brazil’s central role, committing to dispatch a strong Indonesian delegation to the conference.
Prabowo also backed a Brazilian-initiated forest finance scheme, the Tropical Forest Forever Facility (TFFF). This initiative aims to raise a total target of US$125 billion, with 80% sourced from capital market investors and 20% from wealthy nation donors. The fund’s financial structure is ambitious, with a target return 7.5%, which is then disbursed to forest-owning countries meeting specific deforestation reduction criteria. The TFFF is scheduled for an official launch at COP30.
Indonesia joins Brazil, Colombia, the Democratic Republic of Congo, Ghana, and Malaysia as a member of the TFFF’s Interim Steering Committee. Prabowo’s backing was translated into a pledge for an Indonesian contribution to the TFFF’s initial seed funding, following Brazil’s own US$1 billion investment commitment.
Brazil’s President Luiz Inácio Lula da Silva and Indonesian President Prabowo Subianto at the Merdeka Palace in Jakarta (Ricardo Stuckert/Lula Official/Flickr)
Given the TFFF’s objectives and structure, Indonesia, with its extensive forest cover, stands to gain potentially billions of dollars annually. Simultaneously, however, Indonesia is also injecting its own capital as a sponsor. This dual role signals a new Indonesian approach to the geopolitics of climate governance. It suggests Indonesia is no longer content to be merely a recipient within a system designed by other nations. By joining the Steering Committee and becoming a sponsor, Indonesia is effectively “buying a seat” at the decision-making table, influencing the rules, governance, and operational mechanisms of the framework. This move is a form of geopolitical investment aimed at co-designing the architecture of 21st-century climate governance.
Yet, Indonesia’s promise of active engagement in the TFFF raises questions. Chief among these is Indonesia’s institutional capacity and political will to meet the TFFF’s performance requirements. Political ambition does not automatically guarantee bureaucratic readiness.
The TFFF scheme demands that deforestation be contained at 0.5% annually or lower. Indonesian deforestation data, however, is volatile, highly sensitive to commodity prices, power transitions, and the capacity for law enforcement. The penalty mechanism is severe. Every hectare of forest loss at a deforestation rate up to 0.3% results in a payment reduction equivalent to one hundred hectares. If the rate falls between 0.3 and 0.5%, the penalty escalates to two hundred hectares for every lost hectare. A single large-scale land-clearing operation or a spike in peat fires could evaporate hundreds of millions of US dollars.
Satellites cannot always distinguish between legal and illegal deforestation, much less detect degradation that does not result in total forest cover loss.
The challenge of eradicating deforestation extends far beyond simple forest cover calculations, as the root causes lie in Indonesia’s institutional capacity and domestic political situation. The Indonesian forestry sector is widely known to be plagued by corrupt practices, spanning from the operational level to policymakers. Should these malpractices persist, TFFF funds flowing into the government system would be vulnerable to embezzlement, failing to address the core issues of deforestation. Indonesia must ensure that every dollar is effectively distributed and generates tangible change on the ground. A comprehensive monitoring system tracking the flow of funds from the national treasury to concrete activities must function across all bureaucratic levels.
The TFFF structure also promotes the active involvement of indigenous peoples and local communities, mandating that a minimum of 20% of funds be channelled to these groups. This presents another distinct challenge for Indonesia, a nation home to hundreds of customary groups with a long history of land tenure conflicts. Determining who is eligible to receive funds, what proportion they receive, and ensuring distribution transparency is not merely a technical issue, but a political one that risks triggering new disputes. The requirement to establish a grievance mechanism grants communities the right to challenge government decisions, potentially unsettling long-established concessions held by major capital owners. The question of equitable distribution will inevitably create winners and losers.
Layered on top of these domestic realities is the matter of sovereignty and perception. The TFFF system relies on satellite monitoring to assess the performance of tropical forest nations, including Indonesia. However, satellites cannot always distinguish between legal and illegal deforestation, much less detect degradation that does not result in total forest cover loss. An overly narrow focus on forest cover metrics could create an illusion of surface success while the quality of ecosystems and the rights of indigenous peoples and local communities are neglected. The political narrative of sovereignty surrounding the TFFF is important, yet it risks legitimising poor policy if participating states feel they can avoid massive reform by merely submitting reports on forest cover, deforestation, and degradation metrics.
To transform promises into execution, Indonesia must establish systems capable of controlling corruption, ensuring accountability across bureaucratic levels, and equitably distributing benefits to indigenous peoples and local communities. All of this demands political commitment, the courage to confront established interests, and consistency across presidential administrations.
Prabowo’s commitment signals Indonesia’s readiness to take a risk. The question is whether this conviction can be substantiated.
About the author
Mohd Yunus
Mohd Yunus is an independent researcher hailing from Riau Province, Indonesia, and is currently pursuing a master’s degree in biological sciences at Khon Kaen University, Thailand.
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