Designing Real-Time Key Performance Indicators to Enhance Public Acceptance of Indonesia’s Carbon Tax: A Transparency-Driven Policy Framework

This literature review synthesizes scholarly sources to examine the implementation of carbon taxation in Indonesia, with a focus on designing Key Performance Indicators (KPIs) to enhance public support. Drawing from empirical and normative analyses, the study identifies key challenges, including financial burdens on firms, low public acceptance due to perceived inequities, and regulatory uncertainties. Global evidence indicates that carbon taxes effectively reduce emissions without harming economic growth, while Indonesia's hybrid cap-and-tax model projects substantial revenue and aligns with Sustainable Development Goals. Comparative insights from Singapore highlight structured frameworks, such as centralized reporting and progressive tariffs, as models for Indonesia. To boost public buy-in, the review proposes KPIs for a transparent "Carbon Dashboard" on the IDX Carbon Exchange, tracking real-time revenue allocation, emission reductions, and rebate distributions. These indicators, updated daily, could increase acceptance by 43% through participatory education and trust-building. Findings recommend policy integration of KPIs to foster equitable, accountable carbon pricing, supporting Indonesia's Net Zero Emissions target by 2060.