Jakarta, 10-11 March 2024: ERIA hosted a two-day working group meeting on the Study on Carbon Taxation, Revenue Recycling and Competitiveness in ASEAN and East Asia.

The objective of the expert group discussions was to present and discuss the key findings of a country analysis on carbon taxation, revenue recycling, and competitiveness; discuss the results of a modelling analysis on the impact of carbon pricing mechanisms on the competitiveness of ASEAN+; discuss the results of the ERIA survey on willingness to pay for a carbon price and develop regional cooperation strategies based on the surveys; and to finalise the publication plan of the study outcomes. Some 25 experts from different East Asian States (EAS) participated in the deliberations.

On the first day, Professor Fukunari Kimura, ERIA Chief Economist, opened the meeting highlighting the importance of carbon pricing, carbon taxation, and the impacts on the future of the energy sectors. Dr Venkatachalam Anbumozhi, ERIA Director of Research Strategy and Innovation, presented the focus of the study covering the different approaches and history in the implementation of the carbon tax, new trading system, and the voluntary carbon market in ASEAN+ countries. He also pointed out several factors important for carbon pricing, including institutional and political economies, and the economic impacts of the Cross Border Adjustment Mechanism (CBAM).

Session 1 presentations on the theoretical narratives on carbon pricing mechanisms and revenue recycling programs were chaired by Professor Fukunari Kimura. The three presenters were Tham Borg Tsien on Motivations and Experiences of Carbon Price Discovery and Revenue Recycling in Singapore; Jong Woo Kang on Carbon Pricing, CBAM, and Competitiveness of GVCs in Asia; and Prof Jun Arima on the Role of Carbon Pricing and Carbon Market for Regional Carbon Neutral Efforts.

Session 2 was chaired by Prof Xianbin Yao and focused on key trends, experiences, and impacts of implementing carbon pricing mechanisms from New Zealand (Basil Sharp), the US (Dr Clara Gillispie), and the European Union (Prof Oliver Peter Lah). Session 3, chaired by Prof Kaliappa Kalirajan, highlighted the results of computable general equilibrium (CGE) modelling on carbon pricing, revenue recycling, and competitiveness including model structure assumptions and the preliminary results. Prof Jun Pang and Dr Govinda Timilsina contributed to the discussions in this session.

Session 4, chaired by Kuki Soejachmoen, pointed out the results of stakeholder willingness to pay (WTP) for a carbon price covering the ERIA online survey on WTP presented by Dr Venkatachalam Anbumozhi, and the World Bank firm-level surveys on WTP for a carbon tax presented by Dr Govinda Timilsina. ASEAN Centre for Energy (ACE) representative Aldilla Noor Rakhiemah was a key discussant in this session, sharing ACE survey results on WTP on CBAM and providing insights for the ongoing regional and country specific surveys.

The last session on the first day, chaired by Dr Govinda Timilsina, highlighted the key trends, experiences, and impacts of carbon pricing implementation mechanisms in Australia (Prof Kaliappa Kalirajan), China (Dr Tian Huifang), Korea (Prof Jootae Kim), and India (KR Shanmugam). A special presentation was delivered by Keisuke Iyadomi on Global Trends in Carbon Pricing Mechanisms and its Effectiveness.

Dr Venkatachalam Anbumozhi began the second day of the workshop, reflecting on and summarising the first day's workshop sessions on the key trends in carbon pricing mechanisms of advanced economies, and points to be considered in moving forward with developing the model to assess the distributional impact of carbon markets as applicable to ASEAN member states. Prof Xianbin also emphasised the experiences of implementing carbon pricing, policy and historical legacies, and how policy should be reformed.

The first session of the second day was chaired by Prof Xianbin and Dr Kaliappa Kalirajan, and highlighted the key trends, emerging experiences, outlook, and design mechanisms in setting a carbon price using the case studies of Singapore (Prof Dharish David), Indonesia (Dr Muhammad Cholifihani), Malaysia (Dr Sarpanes Subramaniam), Thailand (Dr Qwanrudee Chotichanathawewong), Viet Nam (Ho Cong Hoa), and Japan (Takashi Hongo).

Dr Anbumozhi and Prof Xianbin led the session on the finalisation of key findings and conclusions during the two-day workshop. Latifahaida Abdul Latif from the ASEAN Secretariat presented the ASEAN Strategy for Carbon Neutrality and the Role of Carbon Pricing, a summary document of the meta-policy analysis of emerging carbon price mechanisms and revenue neutrality schemes, which stressed the initiative of carbon markets and the landscape of carbon pricing and sustainability policy within the context of a carbon neutral road map for the region.  

The participants agreed to work on their contributions and publish an integrated report by the second quarter of 2024.