Fiscal Policy for Sustainable Finance: The Effectiveness of Green Subsidies and Tax Incentives in Spurring Sustainable Investment in the Clean Energy Sector

Eko Sudarmanto; Triana Zuhrotun  Aulia; Loso  Judijanto

doi:10.58812/sdi.v2i01.1802

Authors

Eko Sudarmanto Fakultas Ekonomi dan Bisnis Universitas Muhammadiyah Tangerang
Triana Zuhrotun Aulia Fakultas Ekonomi dan Bisnis Universitas Muhammadiyah Tangerang
Loso Judijanto IPOSS Jakarta, Indonesia

DOI:

https://doi.org/10.58812/sdi.v2i01.1802

Keywords:

Fiscal Policy, Green Subsidies, Tax Incentives, Sustainable Investment, Clean Energy Sector

Abstract

This study examines the effectiveness of fiscal policies, specifically green subsidies and tax incentives, in promoting sustainable investments in Indonesia's clean energy sector. Utilizing a quantitative approach, data were collected from 70 respondents comprising policymakers, renewable energy developers, and investors. The study employed a structured questionnaire using a 1–5 Likert scale, and the data were analyzed using SPSS version 26. The findings indicate that both green subsidies and tax incentives have significant positive effects on sustainable investment, with tax incentives showing a stronger impact. These fiscal tools collectively explain 65% of the variance in sustainable investment levels. The study underscores the importance of integrating fiscal policies to overcome barriers and foster a robust investment ecosystem. Recommendations include streamlining subsidy disbursement processes, enhancing tax policy clarity, and developing a coordinated fiscal strategy to accelerate Indonesia’s clean energy transition.

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