(2021). Carbon Credit Risk Mitigation of Deforestation: A Study on the Performance of P2H Products and Services in Indonesia

This study aims to analyze the performances of the Indonesian government's P2H products and services that target the prevention and repair of forest damage. The methodology used is a systematic literature review that identifies, assesses, and interprets this chosen research topic's findings. The study attempts to answer three formulated research questions: (i) How to map P2H policies that aligned with the carbon credit risk mitigation of deforestation?; (ii) How to investigate which products of P2H can contribute to the carbon credit risk mitigation?; (iii) How to measure the impact of P2H to prevent deforestation?. The systematic literature review findings highlight that the Indonesian government has adopted some important provisions and institutions, namely P2H products and services, and carried out loan disbursements to prevent forest destruction, i.e., the forestry business and environmental investment financing. The findings also indicate that while the government most extensively disbursed some loans such as community forest enterprises (HR), there was a low level of loan disbursement for community forest-based loans (HKm) because of the constraints faced by farmers in arable land that produce seasonal crops. Therefore, the study implicates that the forest destruction, particularly in Indonesia, resulting from illegal logging by local communities, needs to be further prevented by increasing the public knowledge on sustainability impact of deforestation and also by increasing them assess and opportunities for the public welfare, alternative livelihood, and micro-business activities. The study findings also make an original contribution to the literature on the carbon credit risk mitigation of forest damage, as it illustrated on a government-sponsored innovative P2H scheme, i.e., disbursement of loans, aiming to reduce and prevent forest destruction.