Protecting nature is still a struggle due to funding gaps that governments across developing countries are struggling to close. Indonesia is no exception. For instance, its national parks are chronically underfunded, receiving only about $5 per hectare ($2 per acre) per year, far below the estimated needs of around $18/hectare ($7.30/acre) per year. This long-standing shortfall has contributed to ongoing risks of degradation. While various financing innovations are being explored, no long-lasting solution has yet fully closed the gap, and searching for effective approaches is increasingly urgent.
The Indonesian government has begun exploring ways to address this funding crisis, with officials arguing that national parks should become more financially self-sustaining rather than rely entirely on state budgets. To this end, the government will initiate programs such as carbon credits and premium tourism within national parks.
One frequently cited pilot project is Way Kambas National Park (WKNP), one of the critical habitats for critically endangered species such as the Sumatran elephant, Sumatran tiger and Sumatran rhino. The government hopes these initiatives will strengthen conservation and provide economic benefits to surrounding communities.
However, these programs are not without controversy. While the government presents them as innovative solutions, concerns appear about governance, transparency, and whose interests they ultimately serve. An investigative report by Tempo highlights the influence of politically connected actors and commercial interests, raising concerns that profit motives could outweigh stated goals such as strengthening conservation and benefiting local communities. Additionally, critics report that the planning process has lacked transparency, with some civil society groups excluded or consulted only after key decisions were made, falling short of the accountability essential for effective conservation planning.
The ecological implications are just as concerning. The proposal would rezone about half of the core area of WKNP for carbon credits and premium tourism. Some areas earmarked for restoration are open grasslands, which form part of the diverse diet of the Sumatran elephant (Elephas maximus sumatranus). Ecologists worry that since carbon projects often prioritize increasing tree cover to maximize carbon storage, there is a risk that converting these open habitats into dense plantations could alter elephant feeding patterns and movement corridors. Such changes risk pushing elephants beyond park boundaries and intensifying conflict with surrounding communities.
These concerns also reflect a broader mismatch between carbon markets and biodiversity conservation. A recent global review published in Nature Reviews Biodiversity argues that carbon markets do not fully align with biodiversity goals. It also shows that key requirements including additionality, leakage and permanence, though vital for carbon integrity, often conflict with ecological needs and may produce unintended consequences such as perverse incentives from commodifying nature, misaligned conservation priorities, and inequitable impacts on local communities. In places like WKNP, such tensions may emerge as carbon-driven interventions risk altering ecosystems that species depend on for survival.
This broader pattern is also evident in experiences with premium tourism elsewhere. In Botswana, for instance, a high-value, low-impact tourism model has long been pursued in areas such as the Okavango Delta, limiting visitor numbers while catering to affluent travelers.
However, research highlights persistent challenges, including high levels of foreign ownership in the lodge sector, significant revenue leakage, and uneven distribution of economic benefits.
The study also notes that such models can restrict land access for local communities. Although the model generates substantial income, its benefits are not always equitably shared, raising important questions for countries like Indonesia considering similar approaches.
The proposed carbon credits and premium tourism in Way Kambas represent a paradox from pursuing conservation goals through controversial approaches. In fact, when conservation is applied without sufficient ecological consideration from the outset, it can worsen the very problems it seeks to solve. It would be better if the management of protected areas were guided first by ecological considerations, including habitat needs and wildlife movement, before economic opportunities are introduced. If commercial priorities shape zoning decisions within protected areas, as appears to be the case, the logic of conservation risks being weakened.
Rather than focusing on technical solutions such as carbon credits and premium tourism, the Indonesian government would do better to focus on strategic approaches. A promising solution from CIFOR-ICRAF for repurposing harmful subsidies for biodiversity funding should be considered. Globally, environmentally damaging subsidies exceed $2.5 trillion annually, most of which support fossil fuels, industrial agriculture, and fisheries. These subsidies contribute to the destruction of forests, wetlands and marine ecosystems that conservation efforts aim to protect. Indonesia also maintains agricultural and energy subsidies that encourage harmful land use. Redirecting even a small portion of these funds could exceed revenue from carbon credits in a single park.
Repurposing harmful subsidies for biodiversity conservation is also supported by the Organisation for Economic Co-operation and Development (OECD), which highlights that governments can expand biodiversity finance by redirecting environmentally harmful subsidies toward positive incentives such as payments for ecosystem services or protected area funding.
Costa Rica provides a well-documented example: after removing incentives that drove deforestation and introducing a national payments for ecosystem services program in 1996 alongside forest protection measures, it reversed deforestation trends. Countries like Indonesia could pursue similar reforms with careful institutional design and coordination.
The conservation funding gap is a real challenge. However, Indonesia should not be overconfident that it can close the gap by using controversial programs. The transparency of program goals and governance, and the certainty of long-lasting commitments need to be established first.
Jakarta should open consultations involving communities and civil society organizations, and redesign any commercial elements from an ecological basis. At the same time, the international financial institutions that support this kind of innovation should direct at least part of their enthusiasm toward a much larger and far less glamorous task, which is ending subsidies that fund the destruction of nature.
Mohammad Yunus is an environmental researcher and freelance writer based in Indonesia whose work has been published by media outlets such as the South China Morning Post, Interpreter, GlobalDev, Dialogue Earth, The East Asia Forum, and The Diplomat.
Banner image: Sumatran elephants. Image by vincentraal via Flickr (CC BY-SA 2.0).
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