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Understanding the political challenges of introducing a carbon tax in Indonesia

Author

Listed:
  • Rakhmindyarto, Rakhmindyarto
  • Setyawan, Dhani
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.

Suggested Citation

  • Rakhmindyarto, Rakhmindyarto & Setyawan, Dhani, 2020. "Understanding the political challenges of introducing a carbon tax in Indonesia," MPRA Paper 111586, University Library of Munich, Germany, revised 02 Aug 2020.
    • Handle: RePEc:pra:mprapa:111586
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    File URL: https://mpra.ub.uni-muenchen.de/111586/1/MPRA_paper_111586.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Climate change · Climate policy · Carbon prices;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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