Taxing Coal to Hit the Goals: A simple way for Indonesia to reduce carbon emissions

This policy brief recommends that the Government of Indonesia implement a coal tax as an immediate, interim measure to reduce greenhouse gas emissions and air pollution while more complex carbon pricing details are resolved.

• The authors propose a coal tax of IDR 78,700 (USD 5.50) per tonne, which is equivalent to a carbon tax of approximately IDR 32,000 (USD 2.20) per tonne of CO2. This measure would generate roughly IDR 49 trillion (USD 3.6 billion) annually and cover 40% of Indonesia's energy-related emissions.
• Coal-fired power stations in Indonesia are linked to 7,480 premature deaths annually due to air pollution-related diseases, suggesting that coal taxes should be increased to account for these societal costs.
• India serves as a feasible model for this policy, having imposed a coal "cess" (special tax) in 2010. Despite having a large domestic coal industry and significant poverty, India's tax reached an equivalent of USD 5.50 per tonne and raised USD 3.7 billion in 2019.

APA

Laan,, T. B. S. (2021). Taxing Coal to Hit the Goals: A simple way for Indonesia to reduce carbon emissions. International Institute for Sustainable Development. https://www.iisd.org/publications/taxing-coal-indonesia-reduce-carbon-emissions

Chicago

Laan,, Theresia Betty Sumarno,Tara. Taxing Coal to Hit the Goals: A simple way for Indonesia to reduce carbon emissions. International Institute for Sustainable Development, 2021. https://www.iisd.org/publications/taxing-coal-indonesia-reduce-carbon-emissions.

Wikipedia

{{cite report |last1=Laan, |first1=Theresia Betty Sumarno,Tara |title=Taxing Coal to Hit the Goals: A simple way for Indonesia to reduce carbon emissions |publisher=International Institute for Sustainable Development |date=20 August 2021 |url=https://www.iisd.org/publications/taxing-coal-indonesia-reduce-carbon-emissions |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{laan2021taxing, author = {Laan,, Theresia Betty Sumarno,Tara}, title = {{Taxing Coal to Hit the Goals: A simple way for Indonesia to reduce carbon emissions}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = aug, url = {https://www.iisd.org/publications/taxing-coal-indonesia-reduce-carbon-emissions}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }