Other Countries Cannot Enforce Carbon Tax

KOMPAS/ZULKARNAINI

Students and residents in Rupat District, Bengkalis Regency, Riau use masks to avoid exposure to smoke from land fires, Monday (25/2/2019). The smog got so bad that schools had to be closed.

JAKARTA, KOMPAS – Indonesia is committed to a zero-emissions policy. However, in terms of imposing a carbon tax or similar environmental tax, Indonesia will not allow other countries to enact such policies without first considering the carbon sequestration of countries with tropical forests, mangrove forests, peatlands and coral reefs.

Trade Minister Muhammad Lutfi said on Thursday (23/9/2021) that Indonesia would reduce its greenhouse gas emissions in accordance with the Paris Agreement. Referring to its pledge in the Nationally Determined Contribution (NDC), Indonesia aimed to reduce greenhouse gas emissions by 29 percent independently or by 41 percent with international assistance by 2030.

“With these commitments, Indonesia will not simply accept the imposition of a carbon tax or similar taxes from other countries. Indonesia produces carbon but absorbs it. too. Other countries must consider this,” Lutfi said when contacted in Jakarta.

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Lutfi cited the example of how Indonesia had asked the European Union not to collect carbon tax as an additional import fee. If the EU were to do so, Indonesia would file a lawsuit with the World Trade Organization (WTO) to lodge a trade dispute against the EU, as the bloc should also consider Indonesia’s efforts to absorb carbon emissions.

On 14 July 2021, the European Commission adopted the proposal for the Carbon Border Adjustment Mechanism (CBAM), which will gradually impose a carbon import duty on certain carbon-intensive products from 2023. In its initial stage, the CBAM will apply to products such as cement, steel, aluminum, fertilizer and electronics. The full policy will be imposed in 2026 by expanding its application to all carbon-intensive products.

Bank Mandiri head of industry and regional research Dendi Ramdani said on Thursday that implementing the emissions-free policy and other climate mitigation policies still had a long way to go. However, Indonesia must prepare for and anticipate climate change from this point forth, as it would affect a number of the country’s leading export commodities.

The policies will not only affect crude palm oil (CPO) and coal, but also commodities that either contained carbon or emitted a high volume of carbon during the production process. Many of Indonesia’s export products are produced using electricity generated by steam power or coal.

“These products include cement, fertilizers, textiles, steel, nickel, aluminum, copper and electronics,” said Dendi.

Air quality guidelines

Meanwhile, the World Health Organization (WHO) updated its air quality guidelines after new evidence showed the adverse effects pollution had on health and resulted in the premature deaths of 7 million people per year. The updated guidelines are expected to nudge Indonesia towards improving its air quality, especially following the success of a civil lawsuit on air pollution in Jakarta.

The WHO revised its 2005 Global Air Quality Guidelines (AQGs), which says that the levels of major air pollutants that contribute to climate change must be reduced significantly to protect the population’s health.

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University of Indonesia epidemiologist and air pollution expert Budi Haryanto expressed the hope that Indonesia would adhere to the WHO’s new guidelines. “The WHO set this new, more stringent standard based on scientific research in order to protect public health. We should refer to these guidelines,” he said on Thursday.

Budi’s research, which used patient medial records from hospitals across the archipelago, showed that air pollution-related diseases accounted for 57.8 percent of all disease among both inpatients and. “So if we can overcome air pollution, we can reduce the nearly 60 percent of [air pollution-related] disease that people suffer,” he said.

This article was translated by Kesya Adhalia.