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Ecological fiscal transfers at the provincial level in Indonesia

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  • Mumbunan, Sonny
  • Ring, Irene
  • Lenk, Thomas

Abstract

A region of ecological importance which generates uncompensated cross-territorial positive spillovers has a comparatively higher fiscal need due to the direct and indirect costs it incurs for nature conservation. In order adequately to acknowledge fiscal needs relating to nature conservation, we propose an indicator based on protected area as a means of distributing general-purpose transfers and model the consequences of this for Indonesia's current system of fiscal transfer from the national to the provincial level. The results suggest that about a third of the country's provinces would benefit from the new transfer regime and that the equalizing effect of the transfers increases as the proportion of protected area increases.

Suggested Citation

  • Mumbunan, Sonny & Ring, Irene & Lenk, Thomas, 2012. "Ecological fiscal transfers at the provincial level in Indonesia," UFZ Discussion Papers 06/2012, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    • Handle: RePEc:zbw:ufzdps:062012
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    File URL: https://www.econstor.eu/bitstream/10419/55837/1/687842077.pdf
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    References listed on IDEAS

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    2. Fitri Nurfatriani & Ramawati & Galih Kartika Sari & Wiko Saputra & Heru Komarudin, 2022. "Oil Palm Economic Benefit Distribution to Regions for Environmental Sustainability: Indonesia’s Revenue-Sharing Scheme," Land, MDPI, vol. 11(9), pages 1-24, September.
    3. Lima de Paulo, Felipe Luiz & Camões, Pedro Jorge Sobral, 2019. "Ecological Fiscal Transfers for Biodiversity Conservation Policy: A Transaction Costs Analysis of Minas Gerais, Brazil," Ecological Economics, Elsevier, vol. 166(C), pages 1-1.
    4. Purnamita Dasgupta & Kavitha Srikanth, 2021. "Achieving the climate goal with intergovernmental transfers to the forestry sector: insights from the Indian experience," Climatic Change, Springer, vol. 164(3), pages 1-24, February.
    5. Cadman, Tim & Sarker, Tapan & Muttaqin, Zahrul & Nurfatriani, Fitri & Salminah, Mimi & Maraseni, Tek, 2019. "The role of fiscal instruments in encouraging the private sector and smallholders to reduce emissions from deforestation and forest degradation: Evidence from Indonesia," Forest Policy and Economics, Elsevier, vol. 108(C), pages 1-1.

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    More about this item

    Keywords

    ecological fiscal transfers; intergovernmental fiscal transfer; biodiversity conservation; protected areas; fiscal equalization; Indonesia;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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