The Asian Development Bank (ADB) will hold a three-day virtual policy dialogue today in conjunction with the Indonesian Ministry of Finance.
Today’s meeting will centre on post-pandemic financial instruments and green development. Representatives from ADB member states and policy professionals are expected to attend.
One key discussion will focus on adopting a carbon tax as a route to greening Indonesia. According to Yale’s Environmental Performance Index, Indonesia currently ranks 147th in the world for air quality. Poor air quality in Jakarta alone is estimated to have decreased the average lifespan of residents by 2.3 years. A carbon tax, levied on the industrial, power generation and transportation sectors, would form a starting point for addressing the nation’s air quality issues.
Indonesia’s government has already pledged to reduce greenhouse gas emissions by 29% before 2030. However, this goal may be unattainable since the pandemic-induced contraction of the economy has forced the government to prioritise economic stabilisation. Additionally, as previous research suggests that an Indonesian carbon tax could hinder economic growth, long-term carbon emission reduction policies will likely be put on hold until Indonesia’s economic situation surpasses its pre-pandemic levels.
Trey is the Chief Editor of Foreign Brief's Analysis division. He specializes in Southeast Asia’s political, economic, and security environments, particularly as they relate to US and Chinese foreign policy strategies.