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The Impact of Fossil Energy Subsidies on Social Cost in Indonesia

Author

Listed:
  • Hadi Sasana

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

  • F. Salman

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

  • Suharnomo Suharnomo

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

  • S. B. M. Nugroho

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

  • A. G. Edy Yusuf

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

Abstract

The intensive development of the Russian agro-industrial complex is accompanied by high energy consumption, which ultimately may result in environmental pollution and ecological imbalance. The dependence of the agricultural production on organic fuels (i.e., traditional hydrocarbon energy sources) may limit the ability of this sector to meet the demand for agricultural products and ensure the food security of the country. Moreover, the high dependence of the agricultural production on traditional energy sources affects the business profitability and competitiveness. Based on the materials outlined in this article, the authors come to the following main conclusions: (i) The adoption of innovative energy saving models is required for the reliable energy supply and improvement of the efficiency of agricultural production. Moreover, the damage to the environment caused by the utilization of fossil fuels can be mitigated by using renewable energy sources; (ii) Russia has the climatic conditions required for the use of solar energy, small hydropower, and wind energy. At the same time, in the part of ensuring the energy needs of agro-industrial and agricultural production in Russia, traditional hydrocarbon energy sources are mainly used.

Suggested Citation

  • 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.
    • Handle: RePEc:eco:journ2:2018-02-22
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Energy subsidy; air pollution (CO 2 ); renewable energy; social cost;
    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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