Researcher Urges Government to Immediately Implement Carbon Tax

Researcher in Economics at The Indonesian Institute (TII), Putu Rusta Adijaya, has stated that the government needs to immediately implement a carbon tax, emphasising its importance for mitigating emission impacts and its potential to increase state revenue. “The carbon tax must be implemented immediately because of its urgency to mitigate emission impacts,” Putu said in Jakarta on Monday. He noted that if the government wants tax revenue to grow, the carbon tax is one instrument that should not be overlooked. According to him, the carbon tax works by placing a price on every tonne of carbon emissions produced by an economic activity, thereby charging the environmental costs, which have so far been ‘free’, to the polluters. Regarding fiscal potential, he said several studies estimate varying state revenue figures depending on the assumed tax rate and sector coverage. A study published on 30 April 2025 estimated that state revenue from the carbon tax could reach IDR 23.651 trillion, based on its initial imposition on coal-fired power plants at a rate of IDR 30 per kilogram of carbon dioxide equivalent. “Unfortunately, its implementation has been delayed for years since the initial target in 2022, despite its undeniable urgency,” he said.