Green Taxes and Justice: Rethinking ‘Polluter Pays’ for a Sustainable Future

¹ Faculty of Law, Universitas Sebelas Maret, Surakarta, Indonesia
² Faculty of Law, Universitas Muhammadiyah Yogyakarta, Yogyakarta, Indonesia
³ Faculty of Social Economy, Universitas Jenderal Achmad Yani Yogyakarta, Yogyakarta, Indonesia
⁴ Faculty of Economic and Bussiness, Universitas Negeri Yogyakarta, Yogyakarta, Indonesia

^* Corresponding Author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

Environmental degradation driven by negative externalities and fiscal inequality demands a reconfiguration of taxation grounded in the Polluter Pays Principle (PPP). This study aims to develop a normative–comparative framework for a green tax system that internalizes pollution costs while promoting fiscal justice. Using a normative legal research method, the analysis explores the theoretical and institutional foundations of green taxation, drawing from Indonesia’s environmental legislation, the Rio Declaration, and European Union guidelines, while examining fiscal equity and progressive redistribution. A comparative perspective highlights the implementation of PPP across jurisdictions: South Africa’s carbon tax, Portugal’s corporate and VAT-based green tax, and Indonesia’s emerging carbon pricing scheme. The study focuses on legal mechanisms of redistribution, including targeted cash transfers, tax credits, and tax-shift models, as well as the role of fiscal transparency and administrative oversight in mitigating regressive impacts. The findings indicate that a green tax framework rooted in PPP and supported by progressive redistribution and legal transparency enhances ecological accountability, social equity, and policy legitimacy. This paper contributes to environmental fiscal reform discourse by proposing a legally grounded and equitable model for sustainable green tax implementation.