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Indonesia can’t afford the luxury of Australia’s carbon habit

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If you want to understand why Indonesia seems to be turning its back on fossil fuels faster than its richer neighbor Australia, you could do worse than look to the wit and wisdom of David Lee Roth.

“I used to have a drug problem,” the hard-living Van Halen singer is supposed to have once said. “Now I make enough money.”

That’s as much a lesson about fiscal policy as it is about rock ‘n’ roll. Middle-income countries like Indonesia simply don’t have the money to waste on indulging costly habits like supporting a fossil fuel industry on the brink of rapid decline. Richer nations, like Australia, can be more indulgent.

Contrast some of the announcements from the world’s two largest coal exporters in recent months. Indonesia will stop the development of coal power plants except those already financed or under construction, a senior official told a parliamentary hearing Thursday. State utility PT Perusahaan Listrik Negara will close all its own coal plants by 2056, the same hearing was told.

That’s not all. The country is looking at introducing a carbon tax that would apply to motor fuel and major industrial facilities — a far cry from the current situation, which subsidizes carbon by mandating a lower price for renewable power than is paid to coal-fired generators.

A pilot carbon market began operating in March. President Joko Widodo at the start of May laid out plans to cut 2030 emissions by 29% below 2010’s........

© The Japan Times

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