A JURIDICAL ANALYSIS OF REGULATORY BARRIERS TO GREEN INVESTMENT IN INDONESIA IN ACHIEVING NET ZERO EMISSION
Keywords:
Green Investment, Rregulatory Barriers, Net Zero Emission, Environmental Law, Carbon TradingAbstract
Indonesia has pledged to reach net zero emissions (NZE) by 2060 or sooner, with green investment serving as the primary vehicle for financing this transition. However, the domestic regulatory architecture remains fragmented and poorly harmonized with climate commitments. This article examines the juridical obstacles hindering green investment and evaluates the adequacy of the existing normative framework in accelerating NZE. Employing normative legal research with statutory, conceptual, and comparative approaches, this study analyzes primary legal materials including the Investment Law, Job Creation Law, carbon pricing regulations, and sustainable finance taxonomies alongside secondary literature. The findings reveal five regulatory obstacles: institutional fragmentation across sectors; legal uncertainty in carbon trading; inconsistent fiscal incentives; weakened environmental safeguards under recent deregulation; and the absence of a binding definition of "green investment," risking greenwashing. The study concludes that Indonesia must enact a dedicated Green Investment Law, establish an independent climate authority, and harmonize sectoral regulations. These reforms are critical to translating climate diplomacy into an enforceable domestic legal order capable of mobilizing the private capital required for NZE.
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