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Understanding the political challenges of introducing a carbon tax in Indonesia

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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 finds 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 influence 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 mitigation efforts. It also has important ramifications in terms of transparency, accountability and political pluralism in Indonesia.

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Notes

  1. Deforestation is the removal of trees without replanting or the conversion from forests to provide agricultural land.

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Acknowledgements

The author would like to thank Assoc. Prof. Cassandra Star and Assoc. Prof. Rodrigo Praino at Flinders University, Adelaide, Australia for their valuable insights and contributions to the study. The author also wishes to express gratitude to the Fiscal Policy Agency, Ministry of Finance of the Republic of Indonesia for providing facilities and providing funding that has made this research endeavour possible.

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  1. Fiscal Policy Agency, Ministry of Finance of Republic of Indonesia, Jalan Dr. Wahidin Raya, No. 1, Jakarta, Indonesia

    R. Dyarto & D. Setyawan

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  1. R. Dyarto
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  2. D. Setyawan
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Correspondence to D. Setyawan.

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All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee (name of committee: Andrea Fiegert, Rae Tyler, and Peter Wigley; reference number: 7347) and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards.

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Editorial responsibility: Jing Chen.

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Dyarto, R., Setyawan, D. Understanding the political challenges of introducing a carbon tax in Indonesia. Int. J. Environ. Sci. Technol. 18, 1479–1488 (2021). https://doi.org/10.1007/s13762-020-02925-4

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