Green Economy Indonesia: Fiscal Policies to Address Pollution and Health

Indonesia has one of the highest levels of air pollution in Southeast Asia. The primary source of these pollutants is the transport sector. In DKI Jakarta, the transport sector contributes between 30 and 40% of total particulate matter (PM) emissions. The overall costs of exposure to ambient PM reached 2.1% of GDP in Indonesia in 2017. In 2010, air pollution-related illnesses were estimated to have cost Jakarta up to US$4.2 billion, almost twice as much as the national budget of the Ministry of Health. There is growing awareness of the negative health impacts of air pollution caused by road transport in Indonesia. Governments from the national to the provincial and local level face increasing pressure to take action to limit harmful pollution and improve air quality in line with commitments, including under the Sustainable Development Goals (SDGs), in particular SDG3 (good health and wellbeing) and SDG 11 (sustainable cities).