Forest resources have not been able to provide for the welfare of their surrounding communities, with the jargon of sustainable forests and prosperous communities still far from a reality. The carbon market in the forestry sector will provide opportunities, but how should institutional and governance arrangements support the carbon market to work more inclusively and sustainably? This is important because the carbon market needs to balance economic, social, and environmental interests—or a triple win. This study uses a mixed-methods approach. A quantitative approach is used to find hidden information related to forest carbon in Indonesia, while a qualitative approach is based on documents and newspaper reports. This study draws two conclusions. First, the internal problems of the forestry sector remain quite complex, and this could hinder accelerated involvement in the carbon market. Second, in addition to accommodating the global norm for adopting carbon trading, it is important to facilitate smallholders and Indigenous peoples playing an active role in the carbon market. Both can be well developed if symmetrical steps are taken to improve institutions and governance by integrating into the global carbon market.