Indonesia introduces carbon tax and cap and trade system
Author
Michael Tardif
Foreign Legal Consultant (partner level), Ginting & Reksodiputro in association with Allen & Overy
Jakarta
Ari Bessendorf
Foreign Legal Consultant, Ginting & Reksodiputro in association with Allen & Overy
Jakarta
Deska Widianto
Senior Associate, Ginting & Reksodiputro in association with Allen & Overy
Jakarta
26 October 2021
A carbon tax and an emissions reductions framework, including a cap-and-trade system, are part of new efforts to meet Indonesia's Paris commitments in a bill passed by the House of Representatives in the lead-up to COP26.
The legislation is a step towards Indonesia’s treaty obligations, but structured and coordinated implementing regulations will be necessary to establish both the carbon tax and the cap-and-trade system as effective policy. We discuss these developments in our article.
