Challenges and Prospects of Carbon Tax Implementation in Indonesia: A Systematic Literature Review

Abdullah Gymnastiar

Abstract


According to data from the World Meteorological Organization, global temperatures have increased by an average of 1.1°C over pre-industrial levels, making climate change a serious worldwide concern. Rising carbon dioxide (CO₂) emissions, mostly from the energy and industrial sectors, make this situation even worse. Implementing a carbon tax is viewed in Indonesia as a strategic way to cut CO₂ emissions and is in line with the country's goal of reducing emissions by 29% by 2030 in accordance with the Paris Agreement (Ministry of Environment and Forestry, 2021). Through a thorough analysis of the literature, this paper seeks to investigate the potential and difficulties of enacting a carbon price policy in Indonesia. This study examines prior research and open-source literature from resources like ScienceDirect and the Directory of Open Access Journals (DOAJ) using the systematic literature review approach. The goal is to give a thorough grasp of the challenges and possibilities of Indonesia's carbon tax policy as a tool for carbon reduction. The report highlights a number of important issues, including inadequate regulatory and enforcement capabilities, poor industry and public knowledge, and a lack of infrastructure for emissions monitoring. However, with the government's strong policy backing and the possibility of using tax money to finance green projects, the prospects for enacting a carbon tax are promising. In conclusion, Indonesia's carbon price policy has a lot of promise to help mitigate climate change, even though there are still obstacles to overcome. Given the current study's reliance on open access platforms like DOAJ and ScienceDirect, it suggests more research that makes use of more comprehensive data sources.

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References


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