Carbon finance and forest conservation in Sumatra: a moderated–mediation approach involving community empowerment and institutional–technical barriers
Nurhaflah Soraya, Arin Pranesti, Kristianus Oktriono, Maria Augustin Lopes AmaralPurpose
This study examines how carbon finance is associated with perceived forest conservation outcomes in Sumatra, Indonesia, focusing on community economic empowerment and institutional and technical conditions.
Design/methodology/approach
The study used a single cross-sectional survey of 250 stakeholders across four Sumatran provinces who assessed carbon-finance programme implementation during 2020–2024. Partial least squares structural equation modelling was used to examine direct, mediating, moderating, and conditional indirect relationships.
Findings
Carbon finance is modestly associated with perceived forest conservation outcomes. Community economic empowerment provides a significant partial transmission pathway, while institutional and technical barriers are negatively associated with perceived conservation outcomes and attenuate the carbon finance-conservation relationship. Collectively, the results indicate that carbon finance functions as a conditional incentive mechanism embedded in community and institutional processes.
Research limitations/implications
The cross-sectional design and reliance on perceived outcomes limit causal and ecological interpretation. The findings provide context-specific evidence of associations among financial incentives, socioeconomic processes, and institutional conditions.
Practical implications
National regulators should clarify governance and benefit-sharing rules; provincial and local authorities should strengthen inter-agency coordination; project developers should provide accessible monitoring, reporting, and verification (MRV) guidance and technical support; and community organisations should participate in benefit allocation, monitoring, and programme evaluation.
Originality/value
The study theorises carbon finance as a conditional incentive-transmission process. It extends Collective Action Theory by identifying community economic empowerment as a transmission pathway, refines Institutional Theory by treating institutional and technical barriers as boundary conditions, and complements political economy by theorising how benefit distribution and decision-making authority shape programme legitimacy and effectiveness.