Indonesia and Malaysia have made increasingly ambitious commitments to reducing greenhouse gas emissions. Yet neither country has outlined how subnational governments, critical to meeting these goals, will be incorporated into, or held accountable to, broader national commitments. This paper analyses the political economy of such agreements at the subnational level. It examines two factors that hinder the ability of the two countries to implement their goals at the subnational level: institutional arrangements that incentivise subnational governments to exploit their own resources for revenue generation, and political coalitions at the subnational level that depend heavily on ties with carbon-intensive industry. It will use a cross-border comparison of the states of East Malaysia and provinces of Kalimantan to examine these dynamics in the resource-rich island of Borneo.