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Redesigning Indonesian forest fiscal policy to support forest conservation

Author

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  • Nurfatriani, Fitri
  • Darusman, Dudung
  • Nurrochmat, Dodik Ridho
  • Yustika, Ahmad Erani
  • Muttaqin, Muhammad Zahrul

Abstract

The formulation of fiscal policy in the forestry sector was designed as a green incentive for local governments to conserve forest area in Indonesia. However, evidence demonstrates an increasing rate of deforestation occurred during the implementation of fiscal policy reforms. Thus, problems persist in the implementation of fiscal policies in the forestry sector. This study evaluates the gap between the rule and the implementation of forest fiscal policy, focusing on regulatory, economic, administrative, and informational instruments. There are four main findings of this study. First, there are several inappropriate and even conflicting regulations concerning local government authorities and forest conservation; second, the lack of coordination among agencies is one of the most important factors causing sub-optimal collection of “non-tax state revenues” from the forestry sector; third, forest fiscal policies in Indonesia mostly focus on collecting financial benefits from timber rather than preserving ecosystem functions, and; fourth, there is a weak management information system concerning forest fiscal policy. To address the gaps identified in this study, the implementation of green fiscal policy in the forestry sector must provide a comprehensive regulatory framework and improve the capacity of human resources.

Suggested Citation

  • Nurfatriani, Fitri & Darusman, Dudung & Nurrochmat, Dodik Ridho & Yustika, Ahmad Erani & Muttaqin, Muhammad Zahrul, 2015. "Redesigning Indonesian forest fiscal policy to support forest conservation," Forest Policy and Economics, Elsevier, vol. 61(C), pages 39-50.
    • Handle: RePEc:eee:forpol:v:61:y:2015:i:c:p:39-50
    DOI: 10.1016/j.forpol.2015.07.006
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    2. Hunggul Yudono Setio Hadi Nugroho & Yonky Indrajaya & Satria Astana & Murniati & Sri Suharti & Tyas Mutiara Basuki & Tri Wira Yuwati & Pamungkas Buana Putra & Budi Hadi Narendra & Luthfy Abdulah & Tit, 2023. "A Chronicle of Indonesia’s Forest Management: A Long Step towards Environmental Sustainability and Community Welfare," Land, MDPI, vol. 12(6), pages 1-62, June.
    3. Erbaugh, James T. & Nurrochmat, Dodik R., 2019. "Paradigm shift and business as usual through policy layering: Forest-related policy change in Indonesia (1999-2016)," Land Use Policy, Elsevier, vol. 86(C), pages 136-146.
    4. Ekawati, Sulistya & Subarudi, & Budiningsih, Kushartati & Sari, Galih Kartika & Muttaqin, Muhammad Zahrul, 2019. "Policies affecting the implementation of REDD+ in Indonesia (cases in Papua, Riau and Central Kalimantan)," Forest Policy and Economics, Elsevier, vol. 108(C), pages 1-1.
    5. Fitri Nurfatriani & Ramawati & Galih Kartika Sari & Heru Komarudin, 2019. "Optimization of Crude Palm Oil Fund to Support Smallholder Oil Palm Replanting in Reducing Deforestation in Indonesia," Sustainability, MDPI, vol. 11(18), pages 1-16, September.
    6. Uddin, Mohammad Nizam & Hossain, Mohammad Mosharraf & Chen, Yong & Siriwong, Wapakorn & Boonyanuphap, Jaruntorn, 2019. "Stakeholders' perception on indigenous community-based management of village common forests in Chittagong hill tracts, Bangladesh," Forest Policy and Economics, Elsevier, vol. 100(C), pages 102-112.
    7. Heidarlou, Hadi Beygi & Mirshekarlou, Asma Karamat & Lopez-Carr, David & Borz, Stelian Alexandru, 2024. "Conservation policy and forest transition in Zagros forests: Statistical analysis of human welfare, biophysical, and climate drivers," Forest Policy and Economics, Elsevier, vol. 161(C).
    8. 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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