Indonesia plannign carbon tax and further push for geothermal
Indonesia is set to release its draft climate change policy, which would establish a carbon tax, set up geothermal energy projects and protect forests.
According to a recent article in Australian media, “Indonesia is set to release its draft climate change policy, which would establish a carbon tax, set up geothermal energy projects and protect forests.
The potential carbon tax, part of Indonesia’s ”green paper” on climate change, would apply to the combustion of fossil fuels and start at $9 a tonne of carbon dioxide, rising 5 per cent in real terms per year until 2020.
The tax could be coupled with cuts to subsidies for coal and oil-generated power, in an attempt to promote clean energy in the one of the world’s fastest-growing economies.
The climate change policy paper, commissioned by the Indonesian Finance Ministry, is set to be formally released at the Copenhagen talks.
The World Bank estimates that Indonesia is the world’s third-largest emitter of greenhouse gases, mainly the result of deforestation and burning of peatlands.
Indonesia’s climate change strategy proposes cutting emissions in three ways – developing geothermal power, driving energy efficiency and reducing deforestation.
ANU climate change institute deputy director Dr Frank Jotzo said Indonesia would rely heavily on selling carbon credits to developed countries to stop deforestation.
Dr Jotzo, who helped prepare the policy paper for Indonesia, said the money gained from selling offsets would be passed on to regional governments for climate change mitigation programs.
Indonesia will also develop a detailed plan to tap the country’s huge geothermal potential – which represents 40 per cent of the world’s hot-rock resources. The geothermal strategy is aimed at partially offsetting a 7 per cent increase in energy demand every year.
The plan includes a geothermal tariff, in which the Government subsidises the purchase of clean energy by electricity retailers.
Dr Jotzo said geothermal energy had obvious potential in Indonesia, but just 3 per cent of the resource had been tapped.
The green paper was commissioned by Indonesian Finance Minister Dr Sri Mulyani Indrawati while in Australia last year, and was written with the help of AusAID and the Australian Treasury.
Indonesian President Susilo Bambang Yudhoyono has committed the country to an emissions reduction of 26 per cent on business-as-usual levels by 2020, rising to 41 per cent if the international community commits to climate change funding for developing countries.”
Source: The Sydney Morning Herald