THE ROLE OF FISCAL POLICY IN ACHIEVING EMISSION REDUCTION TARGET FROM THE PROPERTY SECTOR: A CASE STUDY OF TAX INCENTIVES FOR GREENHOUSE DEVELOPMENT

Abstract

The Indonesian government plans to fight climate change in its national development plan, which is mentioned in the National Medium-Term Development Plan (RPJMN) for 2020-2024. The government wants to cut carbon emissions by 29% on its own and by 41% with help from other countries by 2030. The building industry contributed to a significant amount of worldwide energy use and carbon outflows from material production, construction, operation, and end-of-use  construction waste disposal, and the demands of construction equipment. The property sector, particularly buildings, accounts for about a third of global carbon emissions and accounts for about 40% of primary energy consumption. Many countries have implemented various green construction policies in response to climate change concerns to mitigate carbon emissions and achieve carbon neutrality in the construction industry. The study aims to analyze the role of the government's fiscal policy in encouraging the development of environmentally friendly houses in Indonesia to achieve the national emission reduction target. By focusing on a case study of the implementation of tax incentives for greenhouses. The research results show leveraging fiscal measures by tax incentives for eco-friendly construction contribute significantly to reducing carbon emissions. This research could trigger further research regarding conduct longitudinal studies to assess the long-term impacts of tax incentives on green building adoption and carbon emission reductions in various regions of Indonesia. This could provide insights into the sustainability and effectiveness of these policies over time.