Tax, subsidies to promote sustainable development

Tax, subsidies to promote sustainable development

As the host of the fourth preparatory committee meeting for the
World Summit on Sustainable Development, Indonesia has the
opportunity to contribute to the creation of global measures to
save the planet. The Jakarta Post's Riyadi Suparno and Berni K.
Moestafa interviewed the head of Indonesia's delegation to the
meeting, Coordinating Minister for the Economy Dorodjatun
Kuntjoro-Jakti, to get his views on Indonesia's mission during
the conference. The following is an excerpt of the interview:

Question: The importance of sustainable development has long
been overshadowed by the globalization of trade and services. Do
you see any chance for sustainable development to take the lead?

Answer: Changes at the global and regional level cannot be
separated from the facts or realities of the world, which
continue to change and move forward. And most of these realities
are the result of the world's systems that we want to change. But
in our efforts to change them, we have to go through the
processes at the UN, which take a long and tiring time. While we
are busy with these time-consuming processes, the realities will
continue to move forward. We cannot stop them.

Trade, for example, no matter what, will continue to occur. We
cannot just disregard trade. Financial flows will also continue
to happen, and even at a faster rate and bigger volumes. And
these realities involve millions of contracts that need to be
honored.

To me, those realities are the result of our modern
civilization that has been going on for more than 300 years. And
we want to change or correct these realities. The most difficult
task will be to convince those who have been blamed for the
destruction of the environment to be the scapegoats. But then
they will demand of us: what are the alternatives?

Thus, as the negotiations under the UN proceed, and they
represent idealism, don't forget that we still face daily
realities that demand compensation, in terms of alternatives,
from us. Therefore, there is opposition from countries like the
U.S., Canada and others to the reduction of gas emissions. We
know that reducing gas emissions means reducing vehicles,
factories and much more.

If that is the case, what should developing countries like
Indonesia do?

To save the world, we must not tire in our fight during the
slow process of negotiations under the UN. It is our
responsibility to seek friends who share our concerns. We can use
our basis, like the Group of 77 and the Non-Aligned Movement.

Now, people in developed countries demand that we preserve
most of our forests because our forests act as part of the
world's lungs. OK, I say, let's stop cutting down our forests.
But will you compensate us for the loss of revenue? I am sure
they will not just say yes. Therefore, we need to negotiate here
to get as much as we can.

In the case of Indonesia, do you think that sustainable
development gets enough attention here?

Indonesia is actually in the early stages of the
industrialization process. And yet, we have seen the impact.

We all know that to reduce gas emissions in Indonesia, we have
to reduce the number of private cars as well as public vans and
busses. And we have to shift to electric-powered vehicles, like
electric trains. But it is not easy.

Now, if I tell the Indonesian people, "Let us abandon our cars
and walk to the nearest train station and take the train," I'm
sure it would not work here, although it works in Japan.

The damage is already done. Our production and consumption
patterns have been wrong for so long. Therefore, when we want to
make changes there is always strong resistance.

Also, it seems too late to start. But we have to start
somewhere. For example, we cannot build any more housing estates
by covering lakes, cutting down mangroves forests and reclaiming
seashores. It is useless to do that because global warming will
cause the seas to rise and this will affect real estate by the
sea, like hotels along Anyer Beach in Banten and along the
beaches in Bali.

This should guide us in our development of tourism.

Indonesia has been criticized for being too slow in the
implementation of Agenda 21, signed in Rio de Janeiro 10 years
ago. What will you do to implement the results of the upcoming
World Summit on Sustainable Development in Johannesburg?

Learning from the Rio experience, I will embark on a campaign
once Johannesburg produces an outcome to save the world.

As soon as Johannesburg finishes, we will use the agreements
from Johannesburg in our claims against developed countries. We
will demand assistance to achieve sustainable development.

The assistance can be in the form of debt-swap schemes, such
as debt swap for nature, a debt swap for training 100,000
midwives, a debt swap for planting more trees, and so forth.

In addition, the government can do much more for the people.
We can have courses for officials in various levels of the
government, and also for the general public. Maybe we will also
launch a kind of movements campaign, like a movement for clean
water, a movement to save water, a movement to clean up our
cities, a movement to clean up schools. Maybe, we will start
those things shortly after Johannesburg.

The government can promote the practices of sustainable
development among businesses and the community at large through
taxes and subsidies.

We will impose a hefty tax on vehicles using diesel fuel,
including public buses. In the future, no buses will be allowed
to use diesel fuel. We can do that through tax incentives and
disincentives.

Also, we have to impose more taxes on those destroying the
environment, such as those drilling wells over 100 meters deep.

On the other hand, we have to subsidize those who do things
that help sustainable development, including those who build
water reservoirs in their homes to save rainwater for their daily
use. We could subsidize concrete tanks for those people. Just
imagine if we distributed 100,000 concrete water tanks all across
Indonesia, how much water would be saved.

Also, we can subsidize those who use solar cells for their
houses, and we can impose a hefty tax on those who use more than
10 air conditioners in one house.

You sound optimistic about the prospects for sustainable
development in Indonesia. How do you see sustainable development
in Indonesia in the future?

When I'm talking now about sustainable development, I'm facing
the old generation who do not care about the environment.

But I'm optimistic about our younger generation because they
are growing up after Rio, and they will have a high level of
awareness about saving the world. So I expect that in the next 10
to 15 years, when we talk about sustainable development, we will
not be just dreaming anymore.

I am confident that in the future, when the younger generation
takes the reins, sustainable development will be mainstream and
no longer a radical movement. But we must lay the foundation for
the younger generation.

I believe that corporations will also keep up with this trend.
Car companies, for instance, will eventually produce
environmentally friendly cars. Otherwise, they will be left out.

For the near term, it is important to make sure political
parties are ready to implement the principles of sustainable
development. For me, it is important to increase awareness among
those in political parties, because in Indonesia it is only the
political parties, and no other institutions, that get a public
screening through general elections.

So it is important for us to persuade the people to vote only
for political parties that fight for sustainable development.
Thus, future legislators will produce environmentally friendly
regulations.

If this happens in 2004, that would be quite an achievement
for us.