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Biodiversity offset, or compensation, comprises a suite of measures intended to offset negative impacts on biodiversity resulting from development or human activities. The fundamental principle of biodiversity offsets is to replace or restore lost or damaged habitats with new or similar ones in other locations. By doing so, these compensation efforts aim to maintain or enhance overall biodiversity levels.

The RaCP plays a crucial role in the RSPO certification system which endeavors to advance sustainable palm oil production. To obtain RSPO certification, producers must comply with strict standards regulating the ecological, social, and economic aspects of palm oil production. Palm oil firms that adopt the RaCP are obligated to remunerate for clearing high conservation value forest territories to make way for oil palm plantations.  The compensation funds can be directed to Village Forest Management Institutions that have been licensed by the Minister of Environment and Forestry (LHK) to manage social forests.  The distribution of compensation funds must comply with the RaCP planning document or Compensation Plan.

Carbon trading, also called carbon emissions trading, regulates and reduces greenhouse gas emissions contributing to climate change. The main idea of carbon trading is to encourage companies and others to efficiently decrease their emissions, while offering flexibility in meeting emissions targets set by governments or competent authorities.

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