Greenhouse gases (GHGs), such as carbon dioxide, methane, and nitrous oxide, have long been a global concern. Although these gases naturally occur in the atmosphere, human activities such as the burning of fossil fuels, the use of motor vehicles, and deforestation have accelerated their accumulation, contributing to global warming. Data from 2022 show that the forestry sector accounted for the largest share of Indonesia’s emissions at 45 percent, followed by the energy sector at 36 percent, agriculture at 8 percent, waste at 8 percent, and industry at 4 percent.
“It is ironic that forests, which should serve as carbon sinks, have instead become major emission sources due to land burning, forest conversion, and peat degradation,” said Dr. Ahmad Zaki, a lecturer at the Accounting Study Program, Faculty of Economics and Business, Universitas Gadjah Mada (FEB UGM), during a recent podcast titled Accounting for Society: Akuntansi Karbon.
According to Dr. Zaki, awareness of the importance of emission control has existed for a long time, even before the emergence of carbon trading mechanisms. Several large companies that use fossil energy have voluntarily disclosed their emissions as part of their corporate social responsibility efforts.
“In the past, disclosure was carried out voluntarily to show that companies were taking steps to mitigate global warming. Over time, this initiative evolved into a market-based approach through carbon trading,” the lecturer explained.
Indonesia has launched the IDX Carbon as its official carbon exchange, with transaction values expected to reach IDR 60 billion by 2024, which is still considered small compared to its potential.
Relevant regulations have also been established, including Presidential Regulation No. 98 of 2021 on Carbon Economic Value and Financial Services Authority Regulation (POJK) No. 14 of 2023 on carbon trading.
“One carbon credit in IDX Carbon is equivalent to one ton of CO₂, with an average value of around IDR 500,000,” said Dr. Zaki.
He noted that the mechanism offers significant opportunities for companies to reduce emissions below established limits, allowing them to sell surplus credits while promoting the growth of green projects across Indonesia.
However, he also cautioned that the carbon market faces serious challenges, including the risks of greenwashing, data manipulation, and weak measurement standards.
“Emission data are different from financial figures. Many factors can alter the numbers, creating significant potential for fraud or manipulation,” he emphasized.
As a scholar specializing in environmental and social accounting, Dr. Zaki underlined the increasingly strategic role of accounting in this field. Carbon accounting has emerged as a specialized branch of accounting that focuses on measuring, reporting, and disclosing greenhouse gas emissions, including carbon dioxide.
Using activity-based and supply chain approaches, accountants can calculate a company’s total carbon footprint. This information is then reported through sustainability reports, corporate social responsibility (CSR) programs, or used in carbon trading.
“When carbon becomes a tradable commodity, the role of accountants becomes even more crucial. Accountants calculate the extent of carbon emissions generated by a company’s operations, and this data becomes valuable for investors and creditors,” he said.
Discussing the concept of net zero emissions, Dr. Zaki explained that it has become a global strategy to address climate change. Companies can achieve this target through green projects, energy efficiency measures, or purchasing carbon credits. However, he cautioned that this mechanism is not a final solution.
“Some argue that carbon trading is a ‘low-hanging fruit’ solution, which means relatively easy to implement but insufficient to solve systemic problems. In essence, natural resources are still being exploited for operations, so the root issues remain unresolved,” Dr. Zaki remarked.
Despite these criticisms, Dr. Zaki affirmed that carbon accounting remains essential. Quantifying emissions makes environmental issues clearer and more measurable, allowing them to be managed responsibly. For accounting professionals, this opens new opportunities to contribute.
Accountants today are not only responsible for preparing financial statements but also for calculating emissions, evaluating third-party data, and managing emission surpluses or deficits in the carbon market.
To illustrate, Dr. Zaki offered a simple example: if a company operates one hundred taxis consuming 10,000 liters of gasoline per year, an accountant can calculate the total emissions by multiplying the number of vehicles, fuel consumption, and the emission factor.
“From there, it becomes clear how much carbon footprint the company generates,” he explained.
As the podcast moderator, Dr. Rijadh Djatu Winardi, expressed hope that addressing environmental issues, such as carbon emissions, would help accounting students develop skills in carbon accounting. Through projects and case studies, students should learn activity-based and supply chain-based methods for calculating emissions.
“This way, future accounting professionals can play a greater role in supporting environmental sustainability,” he concluded.
Author: Agung Nugroho
Reporter: FEB UGM/Kurnia Ekaptiningrum
Post-editor: Rajendra Arya
Photographs: Freepik & FEB UGM