In an effort to mitigate the greenhouse emissions in the country, the Indonesian Ministry of Finance is aiming to implement a carbon tax. As a leading producer of coal, gas, and oil, the country is one of the world’s largest greenhouse gas emitters.
The carbon tax will focus on carbon-intensive sectors such as the pulp and paper, cement, electricity generation, and petrochemical industries. The tax targets emissions from the use of fossil fuel, diesel, and gasoline from vehicles and factories.
The carbon tax is projected to increase business costs. As such, the nation’s Ministry of Finance stated that policies would accompany the tax implementation to sustain people’s purchasing power and lower resistance and unintended impacts. Revenue from the tax would be invested in green sectors and welfare programmes.
In Europe, many countries have imposed energy taxes based partly on carbon content. These include Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Norway, Slovenia, Sweden, Switzerland, and the UK.