ECONOMIC ANALYSIS OF THE IMPACT OF CARBON TAX ON THE ECONOMY OF MAKASSAR CITY, INDONESIA

Makassar is the capital of South Sulawesi and the largest metropolitan city in eastern Indonesia. This city is an established of economic development for eastern Indonesia, which is characterized by a high degree of industrial development. Therefore, the carbon dioxide (CO2) emissions generated in the city will increase. However, the government has attempted to maintain environmental quality to ensure a livable and healthy city. Unfortunately, the government’s budget to support the economic development is limited, despite the increased level of economic activity in the city. As a result of these conditions, the government has elected to economize resource use by improving the efficiency of resource allocations. To this end, the government imposed a carbon tax in the city. The purpose of this study is to analyze the impacts on the economy in Makassar resulting from the introduction of carbon taxes to reduce energy consumption in all sectors of the economy that generate CO2 emissions. The imposition of a carbo