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Command-and-Control (CAC) is a classic environmental protection instrument that many scholars told had never been effective nor efficient to reduce environmental damage. Hence, economic instruments (EI-s) becoming more popular since its ability achieving environmental target in more efficient way and providing financial incentive for those who have performance of environmental protection more than what-ve been targeted. Since then, EI-s are recommended by global institutions such International Monetary Foundation (IMF) and World Bank to be implemented in developing-countries including Indonesia. Recently, Indonesia has followed up what Indonesia environmental law act mandates by issuing Government Regulation Number 46 Year 2017 on Environmental Economic Instruments which only will be effectively implemented 7 years since then. However some scholars revealed that EI-s are not compatible for environmental protection of developing countries due to several required circumstances for effective EI-s implementation that are generally becoming the main constraints for developing-countries. This paper will examine about what the constraints and challenges are probably faced by Indonesia in attempting of EI-s implementation and relating such constraints and challenges with recent condition of Indonesia. The findings are insufficient capacities of government officers, corruption, and lobbying from interest groups becoming the main constraints, while the challenges are reforming several policies regarding incentive and disincentive such as the subsidy allocation for fossil fuel consumption and creating a new market for trading of emission permit.