JAKARTA: Indonesia’s carbon tax, which is due to take effect next month, may be delayed due to global economic conditions and to give authorities time to prepare for it, an official said Thursday.
Among the world’s top 10 carbon polluters and the world’s largest exporter of thermal coal, Indonesia had already postponed the tax to July from April.
The much-anticipated tax is part of Jakarta’s pledge to achieve net-zero emissions by 2060 and comes as it prepares to host the G20 leaders’ summit in November.
“Given the global economic conditions which have not been conducive and we also continue to perfect our carbon market system… the government plans to review the implementation of the carbon tax in July,” said Febrio Kacaribu, the chief financial officer. ministry’s fiscal policy office.
He added, however, that Indonesia still intends to start imposing a carbon tax on greenhouse gas emissions produced by coal-fired power plants in 2022 and that this will be presented as a strategic policy at the top of the G20.
Local clean energy think tank CERAH has argued that the government should implement the carbon tax as soon as possible in order to generate funds to fund green energy development.
“By applying a carbon tax, state revenues can be diverted to renewable energy, which has been shown to spur post-pandemic economic recovery in other countries,” Mahawira Dillon, told Reuters. researcher at CERAH.
Indonesian authorities have come under fire from environmentalists that the rate of its proposed carbon tax, at 30,000 rupiah ($2.02) per tonne of CO2 equivalent, would be too low to discourage the burning of coal for the ‘electricity.
Government officials said the rate would initially be kept low due to concerns about electricity affordability, but would be increased to match market prices for carbon once those trades were established.
($1 = 14,835.0000 rupees)