Wow! RI Needs IDR 3,461 Trillion To Reach 29 Percent Carbon Emission Reduction Target

JAKARTA - The government through the Minister of Finance, Sri Mulyani, stated that the commitment to reduce carbon emissions in the country has implications for the consequences of providing a lot of resources. According to the Minister of Finance, funds of up to thousands of trillions are needed to achieve sustainable green development targets.

"In the report, it is stated that the need for Indonesia to achieve a determination to reduce CO2 (carbon dioxide) emissions is IDR 3,461 trillion by 2030", she said through an online channel on Tuesday, February 22.

In her explanation, the Minister of Finance explained that the government aims to reduce carbon emissions by 29 percent with its own efforts and 41 percent with international assistance.

"This is a very significant number. The State Budget in the fiscal framework tries to play out the carbon reduction measures", she said.

For example, the state treasurer said that the State Budget continues to be designed to support and stimulate green economic activities so that the achievement of emission reduction targets can be accelerated.

“First, from a tax perspective, it provides incentives for businesses to take part in the green economy investment. Then use (funds from) tax holidays, tax allowances for environmentally friendly energy sectors", she said.

To note, in the Law on the Harmonization of Tax Regulations (HPP) the government begins to regulate the imposition of a carbon tax for the business world which will be effective on April 1, 2022. In this policy, the tariff imposed is IDR 30 per kilogram of carbon dioxide equivalent (CO2e) or an equivalent unit.

“The imposition of this carbon tax is a strong signal because it will be a complement to the carbon market mechanism. Of course, with a carbon tax and a carbon market mechanism, we will also continue to encourage technological innovation and investment that is more efficient and consistent", concluded Minister of Finance, Sri Mulyani.