The global discourse surrounding climate change often privileges high-level diplomatic negotiations, corporate pledges, and technocratic solutions hatched in metropolitan conference centers far removed from the ecological frontlines. However, during the Bangkok Climate Action Week held from October 5 to 7, 2026, a distinctly different paradigm took center stage at Lumpini Park. Initiated by the Earth Legal Economy Coalition, known locally as Koalisi Ekonomi Membumi (KEM), the Nature-based Economy Pavilion broke away from conventional expo conventions. Rather than displaying sterile corporate booths or abstract technological innovations, the pavilion operated as a dynamic narrative hub, a cross-sectoral exchange platform, and a living testament to community-led climate solutions rooted in the Nusantara region of Indonesia.
According to KEM Executive Director Fito Rahdianto, the pavilion was deliberately conceived as an unconventional climate action strategy. Instead of remaining isolated within closed doors, the initiative positioned indigenous peoples and local communities—the true custodians of Indonesia’s remaining ecological assets—at the center of the global climate narrative. The core objective was to forge genuine pathways of collaboration capable of reconciling the tension between macroeconomic development imperatives and strict ecological preservation. Throughout the three-day event, the pavilion pulsed with activity, hosting civil society panel discussions that successfully bridged the gap between remote grassroots realities and international climate forums, ensuring that systemic environmental struggles back home remained urgently relevant to global audiences.
Shifting Paradigms: The Fiscal Architecture of Green Governance in Indonesia
The urgency of this grassroots outreach is underscored by Indonesia’s broader developmental trajectory, where rapid infrastructure expansion has historically catalyzed environmental degradation while marginalizing indigenous and local populations. Institutional mechanisms for environmental protection have frequently lagged behind the breakneck pace of industrial growth, constrained by chronic underfunding relative to other budgetary sectors. This structural imbalance has long hampered effective conservation efforts at both the national and subnational levels.
To counter this systemic oversight, Indonesian policy advocates have increasingly championed the replication and expansion of Ecological Fiscal Transfer (EFT) mechanisms. By shifting the governing paradigm away from a narrow focus on gross domestic product growth toward holistic ecological health, EFT seeks to reward local governments that prioritize environmental conservation. Since its pioneering introduction in 2018, Indonesia has progressively embedded ecological transfers across multiple administrative tiers: National Ecological Fiscal Transfers (TANE), Provincial Ecological Fiscal Transfers (TAPE), and District Ecological Fiscal Transfers (TAKE). More recently, this framework has trickled down to the sub-district level through Ecological Village Budget Allocations (ALAKE).
During a high-level panel discussion on October 5, 2026, titled “Building Indonesia’s Green Finance Architecture: From Macro-Fiscal Policy to Inclusive Grassroots Benefit Sharing,” Bupati Bulungan Syarwani elaborated via video link on the practical implementation of these green incentives. As the capital of North Kalimantan province—which notably pioneered TAPE at the national level in 2019—Bulungan launched its own "Green Bulungan" TAKE policy in 2022. This policy represents a bold administrative gamble amid tightening fiscal spaces, designed specifically to safeguard local living spaces threatened by deforestation, forest fires, and watershed degradation.
Bulungan’s regional budget (APBD) allocated 7 billion rupiah specifically for TAKE, complemented by an additional 1 billion rupiah earmarked through the revised 2026 budget for seven local sub-districts under the ALAKE scheme. These funds are strategically deployed to protect critical water resources—such as the 576-kilometer-long Kayan River basin—preserve forest cover, manage waste, foster sustainable agriculture, and aggressively prevent forest and land fires.
Despite these localized successes, structural bottlenecks persist. Rabin Ibnu Zainal, Executive Director of Pilar Nusantara (PINUS) Indonesia, noted that while ecological incentives successfully foster grassroots conservation awareness, they run counter to current trends of fiscal centralization. With central government transfers to regional budgets (TKD) slashed to less than 20 percent of the national budget, local authorities find themselves financially hamstrung. Consequently, Zainal and Hadi Prayitno, Executive Director of The Reform Initiatives (TRI), reached a consensus that Indonesia’s fiscal architecture requires radical reform. They argue that the central government must elevate regional transfers back above the 50 percent threshold, given that local municipalities and villages operate on the absolute frontline of climate defense.
To sustainably underwrite these regional efforts, Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies (CELIOS), advocated for bold fiscal instruments, including a biodiversity loss tax, a 2 percent wealth tax targeting the nation’s 50 wealthiest individuals, and aggressive demands for climate debt restitution from the Global North—including the United States, Canada, European Union member states, Japan, Singapore, South Korea, and Australia. Furthermore, Yudhistira cautioned against the perils of corporate greenwashing, emphasizing that imposing windfall profit taxes or extra levies on extractive commodities like nickel should not serve as a regulatory blank check for environmental destruction. Citing the stark regional disparity in Morowali, he pointed out that less than 2 percent of the immense wealth generated by local nickel smelters returns to the regional government and indigenous communities, even as locals shoulder the heavy health and environmental costs of industrial pollution.
Transboundary Haze and the Imperative of Regional Accountability
The devastating environmental toll of unchecked extractivism inevitably bleeds into broader ecological crises, most notably the perennial scourge of forest and land fires that plague Southeast Asia. Months after initial outbreaks, Indonesia continues to grapple with severe, lingering haze events that routinely breach national borders, casting a toxic pall over neighboring Malaysia and Singapore.
Recent satellite data compiled by MapBiomas Fire reveals a troubling surge in burned areas across all major Indonesian islands as of August 2026, with the highest concentration of fire hotspots recorded in Kalimantan and Papua. Furthermore, comprehensive spatial analysis by Auriga Nusantara indicates that a staggering 6.1 million hectares of land burned across Indonesia between 2013 and 2023, with 55 percent of these fires occurring within the carbon-rich ecosystems of Kalimantan and Sumatra. The majority of these blazes erupted in natural cover areas, inflicting profound public health crises, severe economic losses, and cross-border mobility disruptions.
A dedicated panel session on October 6, 2026, titled “From Forest Fires to Transboundary Haze: A Call for Collective Action in Southeast Asia,” laid bare the structural inertia plaguing governmental responses. Timer Manurung, Executive Director of Auriga Nusantara, bluntly asserted that forestry policymaking in Indonesia consistently fails to incorporate meaningful indigenous participation. By sidelining traditional ecological knowledge, authorities repeatedly mismanage fire prevention and suppression strategies, perpetuating the cycle of transboundary haze.
The persistence of this crisis highlights the limits of bilateral diplomacy. Apichai Sunchindah, an independent development expert and former Head of the ASEAN Environment Division, observed that regional efforts to combat haze have spanned nearly three decades. Following the catastrophic El Niño-induced fires of 1997, ASEAN established dedicated administrative units and subsequently ratified the ASEAN Agreement on Transboundary Haze Pollution (AATHP). Yet, despite robust normative frameworks, implementation on the ground remains deeply flawed.
Khairun Nisa Zabidi, Co-founder and Director of Nusanterra, echoed these sentiments, emphasizing that recurring fires are fundamentally symptoms of deeply rooted governance failures that cannot be resolved through intergovernmental negotiations alone. Melinda Martinus, a researcher at the ISEAS-Yusof Ishak Institute and fellow at the ASEAN Studies Centre, added that national policies frequently fracture when translated to the subnational level, complicated by divergent regional realities and jurisdictional ambiguities regarding liability. “We can detect fires from where they originate. Even our satellite capabilities, AI, and so on can now monitor [the source of the fire] precisely, but after that, what do we actually do?” Martinus questioned, pointing to a critical accountability gap in enforcement.
Addressing the root causes of transboundary haze demands structural courage. International financial institutions and commercial banks must face stricter accountability frameworks to sever capital flows to corporate environmental offenders. Simultaneously, the Indigenous Peoples’ Rights Bill (RUU Masyarakat Adat)—which has languished in the Indonesian legislature for over fifteen years—must be enacted immediately. Granting formal legal recognition to indigenous and local land rights is an indispensable prerequisite for empowering communities to protect their ancestral forests.
Redefining Prosperity: Moving from Destruction to Restoration
The extensive dialogues conducted at the Bangkok Climate Action Week converged on a singular, unifying principle: nature must no longer be treated merely as a warehouse of raw materials to be extracted, but rather as the foundational architecture of long-term economic resilience, public health, and human wellbeing.
Building a genuine nature-based economy requires uncompromising, cross-sectoral collaboration. Governments must enact enabling policy frameworks, local communities must continue safeguarding their ecosystems through indigenous wisdom, and commercial enterprises, investors, and consumers must synchronize their market behaviors with ecological preservation. Gita Syahrani of KEM stressed that ecosystem protection serves as the bedrock for business innovation and sustainable livelihoods, warning that degraded ecosystems ultimately deprive enterprises of the stability required to generate employment and weather future economic shocks.
Echoing this perspective, Saskia Tjokro, Director of Avantierra (formerly ANGIN Advisory) and a key KEM contributor, emphasized that bioeconomy practices offer substantial, yet frequently overlooked, financial returns for forward-thinking investors. “Indonesia already dominates the value chain for these commodities, while their upside potential has not been fully priced in by the market. Capital invested in bioeconomy practices—such as agroforestry, food technology, and bio-based materials—captures margins from the upstream level straight through to premium consumer markets,” Tjokro explained, highlighting that robust forest conservation directly correlates with asset valuation and investment yields.
For communities whose lives are inextricably bound to the forest, environmental stewardship is a matter of cultural survival, water security, and intergenerational continuity. Yessy Octavia R. Tuani Mangasih, an indigenous Dayak Iban woman from Sungai Utik and Head of Production at Kalara Borneo in West Kalimantan, offered a poignant reminder during the discussions. Drawing attention to the active forest fires devastating her home province, she underscored that deforestation extends far beyond the mere loss of standing timber.
“It is better to protect our water sources than to shed tears once the forest is gone. The forest fires currently raging in West Kalimantan serve as a stark reminder that deforestation is not just about losing trees, but losing the very sources of our life, our culture, and our collective future,” Mangasih stated.
Ultimately, shifting Indonesia’s development paradigm away from systemic destruction and toward restorative and regenerative models is no longer optional. The transition requires the formal integration of indigenous knowledge, the rigorous enforcement of corporate accountability, and the establishment of value chains that fairly compensate frontline ecological guardians. The resounding voices emanating from Bulungan, Sungai Utik, and Morowali during Bangkok Climate Action Week serve as an undeniable proof of concept: authentic global climate solutions must be firmly anchored in local sovereignty and grassroots empowerment.
