Energy efficiency, rebound effect and environmental tax reform in Indonesia

Arif Rahman Sobri, Djoni Hartono, Nina Indriati Lestari

Research output: Contribution to journalArticle

Abstract

Energy intensity level in Indonesia is decreasing, which is a sign of energy efficiency improvement. However, with the presence of rebound effect, energy consumption becomes challenging to reduce. With a general equilibrium (CGE) model application, this study analyses a rebound effect existence in Indonesia and whether the energy subsidy and income tax reduction could lessen the rebound effect. While it confirms the rebound effect presence, energy subsidy reduction policy could play an important part in determining its level. The policy is believed to reduce rebound effect on fuel oil while elevates it when it comes to electricity and gas. Furthermore, it leads to a positive effect on the economy. However, the other policy such as income tax reduction, indicates contrarily.

Original languageEnglish
Pages (from-to)136-159
Number of pages24
JournalInternational Journal of Energy Technology and Policy
Volume16
Issue number2
DOIs
Publication statusPublished - 1 Jan 2020

Keywords

  • Energy efficiency
  • Energy subsidy
  • Environmental tax reform
  • ETR
  • Income tax reduction
  • Indonesia
  • Rebound effect

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