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Indonesia Takes ‘Low and Slow’ Path to Carbon Tax and Trade

  • Cap set at about 1 ton of CO2 per megawatt hour in pilot run
  • Ministry to assess economic impact before raising carbon price
Transportation of Coal in Indonesia
Photographer: Dimas Ardian/Bloomberg
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Indonesia, the world’s top exporter of thermal coal, will take a gradual approach in pricing and capping greenhouse gas emissions when it rolls out its first carbon tax and trade policy next year.

Southeast Asia’s largest economy, which relies on coal for 70% of its electricity, will set an official limit starting April 1, with those emitting above the cap required to purchase offsets or pay a tax of 30,000 rupiah ($2.10) per metric ton of carbon dioxide equivalent, fiscal policy chief Febrio Kacaribu said in an interview on Wednesday.