Towards Low Emission Development: Prospects of Applying MBIs in the Industrial Sector of Central Java, Indonesia

Abstract

In dealing with pollution or emission, including in encouraging Low Emission Development (LED) as an acceptable strategy for climate change mitigation, Indonesia applies Command and Control (CAC) approach through regulations on environmental and pollution standards. However, the enforcement is characterized by weak monitoring and controlling due to aspects like non-compliant industries and lack of personnel and equipment of the corresponding agencies. Introducing Market Based Instruments (MBIs) can help better achievement in LED as evidenced in the USA, Australia, Taiwan, South Korea and Thailand. This study aims to answer the question "how can the Central Java Provincial Government (CJPG) facilitate better LED through the application of MBIs in the industrial sector?" The approach is qualitative through in-depth interviews with key persons from the CJPG and manufacturing industries with high rate of greenhouse gas emissions in Semarang and Surakarta metropolitans as the two largest industrial centers in Central Java. The results show that the CJPG cannot apply MBI approach in its purely theoretically forms. Instead, it is the principle, which is in accordance with the Equity-Based Development model that should be integrated into the CAC application, i.e., the polluters pay principle. The existing programs, like PROPER, should be refined conceptually and enforced more widely to accommodate 'internalizing the externality' principle better. More industries should be encouraged to participate in such programs.

Dimensions of Community and Local Institutions’ Support: Towards an Eco-Village Kelurahan in Indonesia

“…polluters pay principle, thereby including some charge incurred for violation of command. Perhaps this kind of approach is more appropriate for developing countries as is also shown in [26]. Another aspect is particularly worth noting in this context [27].…”

“…While this approach looks like CAC, it applies the polluters pay principle, thereby including some charge incurred for violation of command. Perhaps this kind of approach is more appropriate for developing countries as is also shown in [26].…”

Urban Expansion and Welfare Change in a Medium-sized Suburban City: Surakarta, Indonesia

“…Migration may generate urbanization due to the need of migrants to seek improved welfare by accessing urban areas (Mieszkowski & Mills, 1993). However, the rapid development of the urban population often causes overcrowding, which in turn leads some residents to move to the suburbs; this process is commonly known as the sub-urbanization phenomena (Feng, Zhou, & Wu, 2008;Garcia-López, 2010;Sridhar & Narayanan, 2016;Sugiri & Buchori, 2016b).…”

“…This is different from the previous conditions, where the suburbs tended to have poor accessibility and facilities. In this case, the process of transitioning from village to city is increasingly important because each region has its own pattern and is influenced by its city structure, geographical physical condition and administrative and political policies (Aguilar, 2008;Aguilar, Ward, & Smith Sr, 2003;Mieszkowski & Mills, 1993;Sugiri & Buchori, 2016b;Zhang, Yue, Liu, Fan, & Wei, 2018).…”

“…In Java, the most rapidly growing island in Indonesia. Urbanization has significantly influenced its inhabitants (Buchori & Sugiri, 2016;Buchori et al, 2017;Sugiri & Buchori, 2016a;Sugiri, Buchori, & Ma'rif, 2015) with land use change from rural to more urban-based activities being rapid (Buchori & Sugiri, 2016;Buchori, Sugiri, Hadi, Wadley, & Liu, 2015;Buchori et al, 2017;Firman & Dharmapatni, 1994;Hudalah & Firman, 2012;Sejati, Buchori, & Rudiarto, 2019;Sugiri et al, 2011). Large-sized cities having more than one million inhabitants, like Jakarta, Bandung, Semarang, Surabaya and Yogyakarta, grow more quickly than others (Buchori & Sugiri, 2016;Buchori et al, 2017;Hudalah & Firman, 2012).…”