This paper discusses the economic effects of the forest moratorium policy which has been launched by the government through the Presidential Decree no. 10 of 2011 dated 20th of May 2011. The issues addressed in the paper are the impacts on: land uses and natural forest area, carbon emissions, domestic prices, export-import, GDP, and poverty rate. Using the quantitative method of IRSA-Indonesia 5 - an inter-regional CGE model, the results show that the forest moratorium policy has both positive and negative impacts on Indonesia's economy.

Drawing on the results of an exploratory qualitative study based on in-depth interviews involving government executives, politicians, business players, and non-government organisations (NGOs), this paper explores climate policies in Indonesia’s national development agenda, including whether a carbon tax could be one of the national priority policy goals. The results suggest that there is heterogeneity in how Indonesian key stakeholders perceive climate policies in Indonesia’s development agenda. Indonesian stakeholders are cognisant of the adverse impacts of climate change on social, economic, and environmental aspects. They also acknowledge that having clear and sound climate mitigation policies is required to achieve Indonesia’s ambitious GHG emissions reduction target. However, Indonesia’s development policy goals are focusing on economic growth, in particular boosting infrastructure investments, reducing poverty and inequality, and job expansion. This makes climate policies are compromised and has created conflicts between Indonesia’s development agenda and its commitment to deal with climate change issues. Overall, the study finds that climate policies are incompatible with Indonesia’s development agenda, therefore a carbon tax is placed at the bottom of the national policy goals.