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• RIADY: For a Smoke-Free Indonesia, Borrow A Page From Environmental Regulation 

The idea is simple: First, the government will set a limit on the total number of cigarettes equal to this year’s annual production; this limit is the “cap” in cap-and-trade. The government will then issue licenses that correspond to the “cap” amount — these are essentially licenses to manufacture cigarettes. Next, these licenses will then be allocated to each cigarette manufacturer according to their respective market shares. Companies may not produce more than they have licenses for and the importation of cigarettes is prohibited. Finally, each year the government will decrease the number of licenses by a certain percentage, in such a way that after 15 years there will be zero licenses. In the course of these 15 years, these licenses are tradeable, meaning that one company can sell their licenses to another; this is the “trade” in “cap-and-trade.” . . .

Our past efforts are too narrowly focused on the demand side and do not have an end goal of putting a stop to the sale of cigarettes. The problem is, when it comes to addictive products, consumer demand is elastic. Hence, we need to complement our existing measures by addressing the supply side.

I believe in the virtues of individual choice and free markets, so it may be unusual that I am proposing such a system that is seemingly contradictory to these principles. I believe, however, that there are instances where certain activities are so inherently harmful to our society that the government is justified in its intervention. This is the case with heroin, cocaine and driving at 300 kilometers per hour.

The cap-and-trade system is neither perfect nor is it the only solution but I hope that this will contribute toward a discussion that will lead us to a comprehensive, practical and rational solution. With the right approach, a smoke-free Indonesia is not an impossible dream.

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