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Responding to the Paris Agreement and climate change mitigation, Indonesia aims to reach net zero by 2060 or sooner. Due to Indonesia's dependence on coal and growing consumption, alternative sources of clean energy are imperative for meeting its rising energy needs and reducing energy-related greenhouse gas emissions to achieve the energy transition. This project aims to examine Indonesia's opportunities and potential to achieve low carbon ambition in the energy sector and identify alternative pathways for the energy transition in Indonesia. In this study, the open-source energy modelling system (OSeMOSYS), which is a long-term energy system modelling tool, is employed to compare electricity generation, investment, and carbon dioxide emissions between business-as-usual and five alternative scenarios. Six scenarios, including business as usual, least-cost, two coal-phrase out and two net zero aligned with national climate targets and optimal scenarios, were simulated across different target years. The results show that the net zero (NZ) scenario is more cost-effective and emits fewer greenhouse gases than the other scenarios in meeting Indonesia's future energy demand. However, achieving net zero by 2050 (NZ50) results in significantly lower CO2 emissions (10,134 MtCO2), which is less than half of the emissions in the net zero by 2060 (NZ60) scenario (16,849 MtCO2) at a similar cost (6229 and 6177 billion USD, respectively). This paper's insights emphasise that large-scale renewable energy deployment and coal retirement are critical pathways to reaching carbon neutrality and achieving the energy mix transition. [ABSTRACT FROM AUTHOR]

Carbon neutrality, being a 'new normative' around the world, is required home and abroad, and such requirement is based on real check of embodied carbon emissions in the international trade. In response, based on the environmental extended multi-regional input–output tables, carbon emission inventories from IEA, and decomposition analysis, this paper comprehensively analyzed the evolution of production- and consumption-based carbon emissions from 2000 to 2014 in Indonesia, explored their disparities in imports, exports, and household demand, and explored main drivers to changes in carbon emission flows. Moreover, historical development patterns over time were measured based on decoupling analysis. The results showed that Indonesia possessed net carbon emission inflows, where China contributed the largest. Increasing trends in carbon emission inflows were found in those embodied in industrial sectors. Dividing the final demand induced emissions, exports accounted for nearly one-third of Indonesia's final demand carbon emission, while domestic consumption took account of 50% of the total emission, of which local industrial products have increased from 2.6 to 1.5 Mt CO2 from 2000 to 2014, taking account of more than 40%. Export is inevitable if a country peruses a higher level of economic development's growth rate. The decomposition analysis showed that the economic development effect has increased carbon emission outflow, while the energy emission intensity effect has the opposite impact on carbon emission increase. Striving to achieve a decoupling and sustainable situation, those results pointed out consumers' responsibilities for future consumption and suggested the sustainable development pattern for emerging economy–Indonesia can be greatly facilitated by international trade control as well as carbon emission intensity mitigation measures. [ABSTRACT FROM AUTHOR]

Indonesia is committed to accelerating the achievement of Net-Zero Emissions by 2060. The Carbon tax is a new instrument that it believes could encourage the achievement of carbon neutrality. Through the Harmonisation of Tax Regulations Act, the Government regulated several carbon tax provisions, which were initially going to be implemented on April 1, 2022, and then postponed to July 1, 2022. Unfortunately, the carbon tax implementation has been delayed until an undetermined time. Implementing legal interpretation, this research comprehensively analyses carbon tax provisions in the Harmonisation of Tax Regulations Act. The research will examine the ability of current carbon tax arrangements to accelerate the achievement of Zero Emissions. This work uses normative juridical methods with a conceptual and statutory approach to provide recommendations. The results show that the carbon tax arrangement does not contain substantial clarity, and various implementing regulations are needed. Article 13 of the Harmonisation of Tax Regulation Act contains vague norms that need to be elaborated. The paper recommends the urgency of legislative review mechanism for the Harmonisation of Tax Regulation Act, especially Article 13, and the need to harmonise it with related laws. [ABSTRACT FROM AUTHOR]

Indonesia is one of the three largest tropical forest countries. Indonesia's forest area is about 120.35 million hectares or about 60% of Indonesia's land area. Indonesia's forest is not only important for the people of Indonesia both in terms of its ecologic and economic role, but also important for the global environment, particularly in relation to climate change. Forests could become carbon storage in large quantities, but also can be a source of carbon emissions. Indonesia's forests currently facing problems of deforestation and degradation, which contributed approximately 20% of global CO2 emissions, so that the Indonesian government put a high attention on the issue of REDD (Reducing Emissions from Deforestation and Forest Degradation). REDD schemes is expected to assist Indonesia in reducing deforestation and forest degradation for forest sustainability and provide economic income from carbon trading. This paper aims to identify the impact of carbon trading under Reducing Emissions from Deforestation and Forest Degradation in Indonesia (REDDI) scheme on income of institutions that consist of households, companies and government using the Social Accounting Matrix (SAM) approach. Accounting multiplier is used to calculate the impact of REDDI scheme on institutions income in the year 2005. The results indicate that the impact of REDDI on institution income for the minimum scenario is U.S.$ 0.68 billion whereas for the maximum scenario is U.S. $. 28.86 billion REDDI give the greatest impact on households' income (59.66%) than followed companies (28.17%) and government (12.17%). [ABSTRACT FROM AUTHOR]

Forests play an essential role in climate change mitigation by absorbing carbon dioxide from the atmosphere and storing carbon in biomass. Carbon sequestration can be increased by the extension of rotation cycles in existing plantation forests. This study examines the cost‐effectiveness of the remuneration scheme employed by Verified Carbon Standard (VCS), a commonly used carbon accounting method based on the average amount of carbon stored in the forest. We compare the net present value of carbon remuneration under VCS with that of a scheme that remunerates actual carbon storage in each year which we call "current carbon accounting." We use data for an Acacia mangium plantation in Indonesia where the forestry sector is expected to contribute more than half of the reductions of carbon emissions according to Indonesia's Nationally Determined Contribution (NDC) under the Paris Agreement. For our baseline scenario, we find, first, that the payments needed to incentivise additional carbon storage under VCS are considerably higher than under current carbon accounting. Second, the inefficiency is more pronounced at lower discount rates. Third, recent prices reported for VCS forest credits are not sufficient to incentivise forest managers to lengthen the forest rotation in Indonesian plantation forests. Recommendations for Resource Managers: Older forests store more carbon. Using a multiple rotations model our study determines how carbon payments incentivise forest managers to lengthen the forest rotation and, hence, to sequester and store more carbon. Forest managers should consider carbon remuneration options in their forest management decisions, in particular when choosing the length of the rotation period.Optimal forest management is impacted by the design of the remuneration scheme. It matters in particular whether carbon sequestration or carbon storage is paid for.Fund managers can incentivise larger amounts of carbon storage through careful design of the carbon remuneration scheme. [ABSTRACT FROM AUTHOR]

Social reforestation programs plant trees on degraded, uncultivated land in low-income regions to allow the local population to generate income from selling wood products and—in case of agroforestry systems—to grow food. For fundraising it is of interest to demonstrate not only positive social impacts but also environmental ones. Proving negative greenhouse gas (GHG) emissions would allow the programs to enter the market for carbon offsetting projects and liberate further funding. In a case study, a social reforestation program in Kalimantan, Indonesia, is analyzed. GHG emissions (according to ISO 14067, PAS 2050 and EU ILCD Handbook for LCA) of the main product, laminated veneer lumber plywood, are determined as 622 and 21 kg CO2-e/m3 for short-term and long-term (above 100 years) plywood use, respectively. Switching to lignin-based resins and renewable electricity could reduce emissions down to − 363 kg CO2-e/m3 for long-term use. The analyzed agroforestry system produces almost carbon–neutral plywood today and could be climate positive in the mid-term. [ABSTRACT FROM AUTHOR]

Most countries, notably those that signed the Paris Climate Agreement, prioritize achieving the zero carbon or carbon neutrality aim. Unlike earlier studies, this one assesses the contribution of environmental policy, clean energy, green innovation, and renewable energy to the E7 economies' achievement of carbon neutrality goals from 1990 to 2019. Findings emanating from the study show that the EKC hypothesis is valid in E7 countries. Implying that emissions in the E7 countries increased with the kick-off of development but declined later due to possible potent environmental regulatory policies put in place. Similarly, across all models, renewable energy (REN), green innovations (GINNO), environmental tax (ETAX), and technological innovations (TECH) were found to exert a negative and significant impact on carbon emissions in the E7 countries both in the short and long run. On the other hand, economic expansion (GDP) positively impacts environmental deterioration. Furthermore, the country-specific result shows that, on average, Brazil, India, China, Russia, Mexico, and Indonesia have significant environmental policies aiding carbon abatement. Except for Brazil, Mexico, and Indonesia, the income growth in the rest of the countries does not follow the EKC proposition. Furthermore, the causality result revealed a unidirectional causal relationship between GDP, REN, and GINNO to CO2 emission. No causality was found between ETAX with CO2, while a bi-directional causality exists between technology and CO2 emissions. Based on the finding, policymakers in the E7 countries should move away from fossil fuels because future electricity output will not be sufficient to reduce emissions considerably. Environmental regulations, encouraging technological innovation, adopting green and sustainable technology, and clean energy sources, among other things, demand radical and broad changes. [ABSTRACT FROM AUTHOR]

Depleting stockpile of fossil fuels and rising global temperature due to the greenhouse effect are probably the two most threatening factors to civilization sustainability. Converting biomass into a readily available energy source will help reduce dependency on fossil fuels, whilst at the same time moderating greenhouse gas emmissions due to its carbon neutrality. Palm oil industry is the largest source of biomass in Indonesia and the available quantity to be utilized is growing inline with the steady growth of the generating industry. Among various wastes from palm oil processing, palm kernel shell is an oil palm biomass with high potential to be applied as a source of energy, given its high caloric value and distinctive physical properties. This source of renewable energy can be utilized by industries with thermal conversion processes. As a prerequisite, a feasibility study on technical, environmental, and economic aspects needs to be carried out. From long term perspective, supply, demand, and regulatory situational analysis will also be required. Lastly, a review on the existing palm kernel shell supply chain will help to understand its current situation. Based on literature studies and field observations, we have identified supply and demand characteristics that will be valuable in constructing an effective, efficient, and sustainable supply chain model of palm kernel shell. Understanding these characteristics is a precursor in realizing this massive potential of renewable energy source in the industrial context. [ABSTRACT FROM AUTHOR]

We estimate and map the impacts that alternative national and subnational economic incentive structures for reducing emissions from deforestation (REDD+) in Indonesia would have had on greenhouse gas emissions and national and local revenue if they had been in place from 2000 to 2005. The impact of carbon payments on deforestation is calibrated econometrically from the pattern of observed deforestation and spatial variation in the benefits and costs of converting land to agriculture over that time period. We estimate that at an international carbon price of $10/tCO2e, a “mandatory incentive structure,” such as a cap-and-trade or symmetric tax-and-subsidy program, would have reduced emissions by 163-247 MtCO2e/y (20-31% below the without-REDD+ reference scenario), while generating a programmatic budget surplus. In contrast, a “basic voluntary incentive structure” modeled after a standard payment-for-environmental-services program would have reduced emissions nationally by only 45-76 MtCO2e/y (6-9%), while generating a programmatic budget shortfall. By making four policy improvements-paying for net emission reductions at the scale of an entire district rather than site-by-site; paying for reductions relative to reference levels that match business-as-usual levels; sharing a portion of district-level revenues with the national government; and sharing a portion of the national government's responsibility for costs with districts-an “improved voluntary incentive structure” would have been nearly as effective as a mandatory incentive structure, reducing emissions by 136-207 MtCO2e/y (17-26%) and generating a programmatic budget surplus. [ABSTRACT FROM AUTHOR]