Presentation short abstract

Indonesia seeks to accelerate climate finance in its oil palm sector by reconfiguring financial architectures, yet these efforts reproduce colonial land governance and shift risks onto smallholders, revealing how subordinated climate finance forecloses rural futures.

Presentation long abstract

This paper examines Indonesia’s attempt to accelerate the circulation of climate finance through its oil palm sector at a moment of ecological and economic crisis. After two decades of planting, roughly 40 percent of Indonesia’s smallholder oil palm plots are dying. The state interprets this uncertainty as a strategic opportunity: by replanting the sector and reconfiguring its financial architecture, it seeks to secure the plantation economy’s future investability and position it within emerging green markets. Yet the program has consistently failed to meet its annual targets.

Drawing on ethnographic research among state planners, financiers, and corporate managers in Jakarta, the paper extends the notion of the “de-risking state” (Gabor 2021) to show how climate finance infrastructures are designed to accelerate capital uptake while redistributing risk downward. I trace how a new plantation fund management agency, the restructuring of state-owned plantation companies, subsidized banking channels, and state guarantees collectively produce a financial circuit that constructs the plantation as a green investment frontier – performing the work of subordinated climate finance by prioritizing legibility, scale, and investor confidence over ecological repair and distributive justice.

The paper highlights two interlinked dynamics. First, state speculation about the plantation’s green investability reproduces colonial logics of corporate-led land governance under the guise of climate action. Second, the risks generated by this strategy are offloaded onto smallholders, who become responsible for sustaining the very debts required to maintain Indonesia’s green-finance narrative. The paper reveals how climate finance not only governs futures but also forecloses alternative rural futures.