Optimizing the Implementation of Carbon Tax in Reducing the Impact of Environmental Pollution

Abstract

Carbon taxes are one of the climate control tools that help achieve sustainable economic growth. It is a market-based instrument that aims to reduce greenhouse gas emissions by making it more expensive to emit carbon dioxide. The Indonesian government has shown its seriousness in reducing global warming by establishing carbon tax regulations, including a provision in Law No. 7 of 2021 concerning the Harmonization of Tax Regulations. Despite implementing carbon taxes in several countries, their implementation must be reconsidered to ensure the objective is achieved. Therefore, this research aims to optimize the implementation of a carbon tax to reduce the impact of environmental pollution. This paper will investigate whether or not the carbon tax has already reduced emissions or if it is not affected at all. Three factors could cause carbon emissions: Coal, vehicle, and greenhouse gas emissions. Therefore, conducting an expectation study encompassing these policymakers, stakeholders, and researchers can gain insights into the potential outcomes and impacts of optimizing the implementation of a carbon tax in reducing environmental pollution. It can inform decision-making processes and help guide the designing and refining adequate and equitable environmental policies.