Understanding the political challenges of introducing a carbon tax in Indonesia

Rakhmindyarto, Rakhmindyarto and Setyawan, Dhani (2020): Understanding the political challenges of introducing a carbon tax in Indonesia. Published in: International Journal of Environmental Science and Technology (15 September 2020)

Abstract

Indonesia is the 6th largest carbon emitter in the world. It is also one of the most vulnerable countries to climate change, with a population of 250 million people spread across thousands of islands and low-lying coastal areas. This paper investigates the political challenges to introduce a carbon tax as a climate policy option in Indonesia. It is based on the analysis of 29 in�depth elite interviews with key Indonesian stakeholders. It fnds that, while political elites seem, in principle, to be open to the idea of a carbon tax, they are also cognisant of the impact of corruption challenges in the Indonesia context. Meanwhile, the business community opposes a carbon tax and fears the introduction of additional costs that may infuence productivity and competitiveness. Non-government organisations, however, support its immediate introduction. Overall, this work makes an important contribution to the ever-growing academic debate on the introduction of carbon prices to assist carbon mitiga�tion eforts. It also has important ramifcations in terms of transparency, accountability and political pluralism in Indonesia.

• Item Type: MPRA Paper
• Language: English
• Keywords: Climate change · Climate policy · Carbon prices
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities ; Redistributive Effects ; Environmental Taxes and Subsidies

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