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The Effect of Energy Subsidy on the Environmental Quality in Indonesia

Author

Listed:
  • Hadi Sasana

    (Faculty of Economics and Business, Diponegoro University, Indonesia,)

  • Achma Hendra Setiawan

    (Faculty of Economics and Business, Diponegoro University, Indonesia)

  • Fitri Ariyanti

    (Faculty of Economics and Business, Diponegoro University, Indonesia,)

  • Imam Ghozali

    (Faculty of Economics and Business, Diponegoro University, Indonesia)

Abstract

Energy subsidy has boosted energy consumption and energy consumption has triggered high emissions of carbon dioxide (CO2), which might reduce environmental quality. This problem occurs around the world, especially in the developing countries undergoing a period of industrialization, such as Indonesia. The aim of this study was to analyze the effect of energy subsidy, energy consumption, and population growth on CO2 emissions in Indonesia. The method used was multiple linear regression analysis with ordinary least square approach using time series data within the period of 1990-2014. The results showed that energy subsidy, fossil energy consumption, and population growth have a positive and significant impact on CO2 emissions in Indonesia. Meanwhile, the consumption of renewable energy has a negative effect on the emissions of CO2 emissions produced.

Suggested Citation

  • Hadi Sasana & Achma Hendra Setiawan & Fitri Ariyanti & Imam Ghozali, 2017. "The Effect of Energy Subsidy on the Environmental Quality in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 7(5), pages 245-249.
    • Handle: RePEc:eco:journ2:2017-05-27
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    References listed on IDEAS

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    Cited by:

    1. Hadi Sasana & F. Salman & Suharnomo Suharnomo & S. B. M. Nugroho & A. G. Edy Yusuf, 2018. "The Impact of Fossil Energy Subsidies on Social Cost in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 168-173.
    2. Hameed, Shahzad & Wei, Wei & Farrukh, Umer & Mushtaq, Khali, 2019. "Switching to Hydropower renewable energy to mitigate the effects of the carbon emissions in South and East Asian economies," MPRA Paper 90435, University Library of Munich, Germany.
    3. Faisal Irsan Pasaribu & Catra Indra Cahyadi & Restu Mujiono & Suwarno Suwarno, 2023. "Analysis of the Effect of Economic, Population, and Energy Growth, as well as the Influence on Sustainable Energy Development in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 510-517, January.
    4. Hadi Sasana & Jaka Aminata, 2019. "Energy Subsidy, Energy Consumption, Economic Growth, and Carbon Dioxide Emission: Indonesian Case Studies," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 117-122.
    5. Darwanto Darwanto & Purbayu Budi Santosa & Herniwati Retno Handayani & Jaka Aminata & Fitrie Arianti & Imam Gozhali, 2020. "Does Formal Constraints Reduce CO2 Emissions? Indonesia s Empirical Case," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 236-241.

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    More about this item

    Keywords

    carbon dioxide emissions; fossil energy consumption; energy subsidy; renewable energy consumption;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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