Journal of State Public Policy (JSPP)
Vol. 1 No. 3 (2026): Journal of State Public Policy

Legal Certainty of Carbon Credits as FDI Objects: Indonesian Investment Normative Vacuum

Jessica Esther Warouw (Faculty of Law, University of Indonesia, Indonesia)



Article Info

Publish Date
01 Jun 2026

Abstract

The green economic transition introduces carbon credits as foreign direct investment objects. However, the Indonesian investment law regime suffers from a severe normative vacuum due to the absence of carbon credit qualifications as intangible assets. This doctrinal research is operationalized utilizing statutory, conceptual, and comparative approaches to untangle this legal standing issue. The results demonstrate that the lack of property rights recognition over carbon assets triggers significant legal uncertainty for foreign investors. This condition creates high risks regarding indirect expropriation threats without compensation and severe ambiguity in cross-border capital repatriation procedures. The systemic implications of this regulatory dissonance directly place Indonesian jurisdiction in a vulnerable position against international arbitration dispute threats. Foreign tribunals possess potential to interpret these entities as legitimate protected assets. Conclusively, filling the legal vacuum through statutory requalification of carbon units as investment objects constitutes an absolute urgency to guarantee investment certainty while mitigating state jurisdictional losses.

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Journal Info

Abbrev

jspp

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Subject

Description

Journal of State Public Policy (JSPP), published triannually (April, August, and December) by Cerdas Pedia, is a peer-reviewed, open-access academic journal dedicated to the rigorous analysis of public policy formulation, state administration, and legal regulatory frameworks. Serving as a critical ...