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Java-Bali is Indonesia's largest power system, with enormous CO 2 emissions. Therefore, the Government of Indonesia has committed to reducing CO 2 emissions by introducing two policies: (1) a new and renewable energy target and (2) coal phase-out planning. However, no study on the energy-carbon-economic nexus in Indonesia has analyzed the impact of reducing CO 2 emissions using these policies. Therefore, this research analyzes the economic impacts on the energy and carbon nexus in the Java-Bali system to obtain and review feasible strategies to support these policies. OSeMOSYS was used in this study to implement multiple scenarios of emission reduction. The results indicate that policies that clearly regulate carbon limits and taxes for power generation companies are required. A carbon limitation of 10,087 million tons with a carbon tax of 67 USD/ton and a carbon limitation of 8482 million tons with a carbon tax of 77 USD/ton are required to supporting the new and renewable energy target and coal phase-out plan. Nuclear energy and liquefied natural gas are crucial for supporting the new and renewable energy targets and coal phase-out policies. Therefore, the government must immediately decide to utilize nuclear energy and guarantee an adequate liquefied natural gas supply at an affordable price. Furthermore, it is crucial to seek alternatives to meet the demand projection through interconnection with other islands that have immense renewable energy sources to meet the new and renewable energy target and successfully implement the coal phase-out plan. [Display omitted] • A new and renewable energy (NRE) target and coal phase-out plan have been proposed • Carbon limits and taxes are required to support the NRE target and coal phase-out • The NRE target requires a carbon limitation of 10,087 million tons • The NRE target requires a carbon tax of 67 USD/ton • Coal phase-out requires a carbon limitation of 8482 million tons • Coal phase-out requires a carbon tax of 77 USD/ton [ABSTRACT FROM AUTHOR]