Investor Presentaiton
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Carbon Pricing Policy
CO2
CARBON PRICING
POLICY UNDER
DISCUSSION
Aims to reduce national GHG
emissions.
Become a policy intervention to
overcome "market failure".
The practice of "polluters-pay-
principle"
Encouraging a low-emissions business
and business ecosystem.
Can be an alternative source of
financing for sustainable development
programs.
Government, currently, is preparing
Regulation on Carbon Pricing.
Implementation of international carbon
trading will consider the discussion of
Article 6 Paris Agreement at COP 26
1
Carbon Pricing Instruments
Trading Instruments
a. Emission Trading System/ ETS: an entity that
emits more buys an emission permit than one
that emits less (cap and trade)
b. Emission Offset (Crediting Mechanism):
Entities undertaking emission reduction
activities can sell their carbon credits to
entities requiring carbon credits.
2
Non-Trade Instruments
a. Carbon tax: imposed on carbon content or
carbon emitting activity.
b. Result Based Payment: payments are made for
the results of emission reductions.
Emission Trading System
Batas Atas
Emisi
(emission
cap)
First Period
Entity A
and Entity
B have the
Emission
A
B
Allocation
Certificate
Emission
Obtained
same
allocation
at the
beginning
of the
period
Emission Offset
2
A
A
Batas Atas
Emisi
(emission
cap)
B
Emission
Reduction
C
Initial
Emission
Final
Emission
Certificate
Emission
Obtained
Trade Mechanisms
Carbon Tax
Result-Based
Payment
Non Trade Mechanisms
No carbon credits transfer
End of Period
A
A has an
allocation
surplus
that can be
sold to B
B
Batas Atas Emisi
(emission cap)
B is a business
entity that is
subject to a cap
C is a business
entity that is not
subject to a cap
Carbon content on
goods
Emitting activity
104
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