The pro-climate policy carbon tax, is it also pro-poor policy?

Through the Law on the Harmonization of Tax Regulations, Indonesia will introduce a
carbon tax on April 1st, 2022. In the first stage, a carbon tax will be applied to the coal-fired
Steam Power Plant (PLTU) using a tax mechanism based on emission limits (cap and tax). A
tariff of IDR 30 per kilogram of carbon dioxide ( ) equivalent will be applied to the emissions
exceeding the set cap. In the implementation mechanism, taxpayers can take advantage of carbon
certificates purchased on the carbon market to reduce their carbon tax. Implementing this carbon
tax proves the Indonesian government’s commitment to controlling climate change as a priority
development agenda. Indonesia is one of the countries that will implement carbon tax first
compared to other emerging economic powers, especially in the Asia Pacific region.
The main objective of imposing a carbon tax is to change the behavior of economic actors
to switch to low-carbon green economic activities. Also, the carbon tax is in line with the
government’s efforts to achieve the target of reducing greenhouse gas emissions by 29% on its
own and 41% with international support by 2030. In addition, the imposition of a carbon tax
provides a solid signal to support carbon markets, technological innovation, and investment to
be more efficient, low-carbon, and environmentally friendly. In addition, the revenues from
carbon taxes can be used to fund sustainable development, invest in environmentally friendly
technologies, or provide support to low-income communities through social programs.

source :

https://workingpapers.bappenas.go.id/index.php/bwp/article/view/200