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In15, only sixteen% of CO2 emissions from power use were priced,and none have been priced above EUR 30 per tonne of CO2, which is a conservative estimate of the climate injury from 1 tonne of CO2 emissions.Among emerging economies, Indonesia has the second highest carbon pricing gap, at EUR 30 per tonne of CO2, highlighting its lag in use of cost-effective insurance policies to decarbonise the economic system Figure three. In addition to low taxes, Indonesia applies insurance policies that scale back vitality manufacturing prices and end-person costs relative to different types of funding or consumption, thereby successfully working counter to power taxation. Examples embody subsidies for power production and consumption, and domestic gross sales mandates Sectionfour. As a consequence, vitality costs are properly beneath their associated social and environmental value. As the OECD’s18 Economic Survey indicates, nicely-designed green fiscal reform may assist Indonesia enhance a lot-needed tax revenue whereas decreasing pollution and other environmental externalities in a cost-effective means.Although Indonesia’s fiscal position is in good condition, due partly to vitality subsidy reform Section4, social and infrastructure spending wants are giant. Taxing “bads”, similar to pollution, can raise revenue at a

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