The absence of comprehensive regulation in tackling negative externalities of Haze Pollution in Indonesia creating severe and devastating effects of regional environmental crisis includes transboundary pollution spreading to the Southeast Asian Region. Based on this context and given the industrial background, what is the optimal mix of regulatory and market-based policies for pollution control that strengthen expected liability in deterring the Indonesia haze pollution case?

The theoretical framework is underlying that a single policy is not sufficiently flexible and resilient in addressing all environmental problems in all contexts. Tax as a market-based economic policy would be placing a direct cost on environmental damage; the polluter should bear the cost of measures to reduce pollution according to the extent of either damage done to society or the exceeding of an acceptable level. This book reveals that environmental policy that depends on the interaction of tax policy through strengthening the Tax Administrator’s ability to identify the evasion and increase the tax revenue will produce a significant deterrence impact and reduce the hotspot.  Moreover, even though the empirical results are observed the necessity of mixed policy, it cannot be ignored how the patronage would influence and overturn policy implementation in tackling environmental externalities.