IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2021-05-14.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/11375/6007
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/11375/6007
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tim Laing & Misato Sato & Michael Grubb & Claudia Comberti, 2013. "Assessing the effectiveness of the EU Emissions Trading System," GRI Working Papers 106, Grantham Research Institute on Climate Change and the Environment.
    2. Pinglin He & Lu Chen & Xiaonan Zou & Shufeng Li & Huayu Shen & Jianhui Jian, 2019. "Energy Taxes, Carbon Dioxide Emissions, Energy Consumption and Economic Consequences: A Comparative Study of Nordic and G7 Countries," Sustainability, MDPI, vol. 11(21), pages 1-17, November.
    3. Lawrence H. Goulder & Andrew R. Schein, 2013. "Carbon Taxes Versus Cap And Trade: A Critical Review," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(03), pages 1-28.
    4. Djula Borozan, 2018. "Efficiency of Energy Taxes and the Validity of the Residential Electricity Environmental Kuznets Curve in the European Union," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    5. Lin, Boqiang & Li, Xuehui, 2011. "The effect of carbon tax on per capita CO2 emissions," Energy Policy, Elsevier, vol. 39(9), pages 5137-5146, September.
    6. Nathalie Trudeau & Isabel Murray, 2011. "Development of Energy Efficiency Indicators in Russia," IEA Energy Papers 2011/1, OECD Publishing.
    7. Antonia Cornwell & John Creedy, 1996. "Carbon taxation, prices and inequality in Australia," Fiscal Studies, Institute for Fiscal Studies, vol. 17(3), pages 21-38, August.
    8. Mr. Ved P. Gandhi & Mr. Javier Cuervo, 1998. "Carbon Taxes: Their Macroeconomic Effects and Prospects for Global Adoption: A Survey of the Literature," IMF Working Papers 1998/073, International Monetary Fund.
    9. Snorre Kverndokk, 1993. "Global CO2 Agreements: A Cost-Effective Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 91-112.
    10. James A. Tobey & Henri Smets, 1996. "The Polluter-Pays Principle in the Context of Agriculture and the Environment," The World Economy, Wiley Blackwell, vol. 19(1), pages 63-87, January.
    11. Hoel, Michael, 1992. "Carbon taxes : An international tax or harmonized domestic taxes?," European Economic Review, Elsevier, vol. 36(2-3), pages 400-406, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Assaad Ghazouani & Wanjun Xia & Mehdi Ben Jebli & Umer Shahzad, 2020. "Exploring the Role of Carbon Taxation Policies on CO 2 Emissions: Contextual Evidence from Tax Implementation and Non-Implementation European Countries," Sustainability, MDPI, vol. 12(20), pages 1-16, October.
    2. Paula Pereda & Andrea Lucchesi, Carolina Policarpo Garcia, Bruno Toni Palialol, 2019. "Neutral carbon tax and environmental targets in Brazil," Working Papers, Department of Economics 2019_02, University of São Paulo (FEA-USP).
    3. Katsuyuki Nakano & Ken Yamagishi, 2021. "Impact of Carbon Tax Increase on Product Prices in Japan," Energies, MDPI, vol. 14(7), pages 1-19, April.
    4. Mardones, Cristian & Flores, Belén, 2018. "Effectiveness of a CO2 tax on industrial emissions," Energy Economics, Elsevier, vol. 71(C), pages 370-382.
    5. Sæther, Simen Rostad, 2021. "Climate policy choices: An empirical study of the effects on the OECD and BRICS power sector emission intensity," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 499-515.
    6. Emilio Padilla & Jordi Roca, 2002. "The proposals for a European tax on CO2 and their implications for intercountry," Working Papers wp0201, Department of Applied Economics at Universitat Autonoma of Barcelona.
    7. Hammerle, Mara & Best, Rohan & Crosby, Paul, 2021. "Public acceptance of carbon taxes in Australia," Energy Economics, Elsevier, vol. 101(C).
    8. Stefano Carattini & Simon Levin & Alessandro Tavoni, 2019. "Cooperation in the Climate Commons," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(2), pages 227-247.
    9. Genovaitė Liobikienė & Mindaugas Butkus & Kristina Matuzevičiūtė, 2019. "The Contribution of Energy Taxes to Climate Change Policy in the European Union (EU)," Resources, MDPI, vol. 8(2), pages 1-23, April.
    10. Xiuqin Zhang & Xudong Shi & Yasir Khan & Taimoor Hassan & Mohamed Marie, 2023. "Carbon Neutrality Challenge: Analyse the Role of Energy Productivity, Renewable Energy, and Collaboration in Climate Mitigation Technology in OECD Economies," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    11. Emilio Padilla & Jordi Roca, 2004. "The Proposals for a European Tax on CO 2 and Their Implications for Intercountry Distribution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(3), pages 273-295, March.
    12. Rafique, Muhammad Zahid & Fareed, Zeeshan & Ferraz, Diogo & Ikram, Majid & Huang, Shaoan, 2022. "Exploring the heterogenous impacts of environmental taxes on environmental footprints: An empirical assessment from developed economies," Energy, Elsevier, vol. 238(PA).
    13. Aydin, Mucahit & Sogut, Yasin & Altundemir, Mehmet Emin, 2023. "Moving toward the sustainable environment of European Union countries: Investigating the effect of natural resources and green budgeting on environmental quality," Resources Policy, Elsevier, vol. 83(C).
    14. Johan Lilliestam & Anthony Patt & Germán Bersalli, 2021. "The effect of carbon pricing on technological change for full energy decarbonization: A review of empirical ex‐post evidence," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 12(1), January.
    15. Emilio Padilla Rosa & Jordi Roca Jusmet, 2002. "Las propuestas para un impuesto europeo sobre el CO2 y sus potenciales distributivas entre países," Working Papers wp0201cast, Department of Applied Economics at Universitat Autonoma of Barcelona.
    16. Dogan, Eyup & Hodžić, Sabina & Šikić, Tanja Fatur, 2023. "Do energy and environmental taxes stimulate or inhibit renewable energy deployment in the European Union?," Renewable Energy, Elsevier, vol. 202(C), pages 1138-1145.
    17. Emilio Padilla Rosa & Jordi Roca Jusmet, 2003. "Las propuestas para un impuesto europeo sobre el CO2 y sus potenciales implicaciones distributivas entre países," Revista de Economía Crítica, Asociación de Economía Crítica, vol. 2, pages 5-24.
    18. Alice Brock & Simon Kemp & Ian D. Williams, 2022. "Personal Carbon Budgets: A Pestle Review," Sustainability, MDPI, vol. 14(15), pages 1-18, July.
    19. Josef Gotvald, 2024. "The role of environmental taxes and other political instruments on the road to climate neutrality [Role environmentálních daní a dalších politických nástrojů na cestě za klimatickou neutralitou]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2024(1), pages 47-76.
    20. Shuang Liang & Xinyue Lin & Xiaoxue Liu & Haoran Pan, 2022. "The Pathway to China’s Carbon Neutrality Based on an Endogenous Technology CGE Model," IJERPH, MDPI, vol. 19(10), pages 1-22, May.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2021-05-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.