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Comparing Carbon Tax and Cap and Trade as Mechanism to Reduce Emission in Indonesia

Author

Listed:
  • Juris Justitio Hakim Putra

    (Faculty of Law, Universitas Airlangga, Indonesia)

  • Nabilla Nabilla

    (Faculty of Law, Universitas Airlangga, Indonesia)

  • Fidelia Yemima Jabanto

    (Faculty of Law, Universitas Gadjah Mada, Indonesia.)

Abstract

Due to the high utilization of carbon results to environmental problems in most provinces in Indonesia, it can be concluded that Indonesia in urgently requires mechanism to solve environmental issues. Many attempts have been conducted by Government of Indonesia to solve the issues such as ratification of Kyoto Protocol and Paris Agreement, further the proposal on Nusantara Carbon Scheme (Skema Karbon Nusantara abbreviated as SKN ). Unfortunately, the proposal has not adopted yet up to 2021. Calculating based on current situation, Indonesia s greenhouse gas emissions are predicted to increase to 1.573 and 1.751 MtCO2e in 2030, which contrary to the commitment under Nationally Determined Contribution (NDC). There are several options of mechanism to be adopted, the most popular mechanism that deems highly effective are cap and trade as well as carbon tax. Many mechanisms adopted in different countries, it is important to assess which mechanism is more effective to be applied in Indonesia. Therefore, this research is conducted to assess difference on the effectiveness on carbon tax and cap and trade, examine current Indonesia s stance towards the issue, and assess legal principle to be considered when applying the mechanism in Indonesia.

Suggested Citation

  • Juris Justitio Hakim Putra & Nabilla Nabilla & Fidelia Yemima Jabanto, 2021. "Comparing Carbon Tax and Cap and Trade as Mechanism to Reduce Emission in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 106-111.
    • Handle: RePEc:eco:journ2:2021-05-14
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    References listed on IDEAS

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    More about this item

    Keywords

    Carbon Tax; Cap and Trade; Indonesia;
    All these keywords.

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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