Development of Economic Instruments for the Indonesian Industry to Reduce Emissions of Greenhouse Gases (GIZ)

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GIZ has been working with the Government of Indonesia through its programme on Policy Advice for Environment and Climate Change. This report presents the results from the current activities conducted to support the development of GHG economic instruments within the country. The main analysis identifies key ways forward for Indonesia. Specifically, Indonesia should use an integrated package of instruments to green various sectors. The study also suggests that a pilot sector, the cement industry, should be utilized to reduce GHG. Specific approaches and instruments for the industry are presented with an emphasis on targeting high energy consumers/GHG emitters both within and outside the industrial sector, setting an emissions cap, and introducing carbon, emissions, or energy taxes. This study can also serve as a model for engaging in initial activity stages and initiating implementation.