Policy Brief2025
Ecological Fiscal Transfers for Indonesia: Design Choices and Distributional Consequences
Ecological fiscal transfers reward sub-national governments for conservation outcomes through the intergovernmental transfer system. This brief sets out the three key design choices — indicator selection, formula weight and revenue source — and simulates their distributional effects across Indonesian provinces. We show that indicator choice determines whether transfers reward existing forest stock or marginal conservation effort, and argue for a hybrid formula.
Maya Kusuma & Dinda Larasati