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Fossil Fuels Consumption, Carbon Emissions, and Economic Growth in Indonesia

Author

Listed:
  • Traheka Erdyas Bimanatya

    (Economics Department, Faculty of Economics and Business (ED-FEB), Gadjah Mada University, Indonesia,)

  • Tri Widodo

    (Center for Southeast Asian Social Studies (CESASS), Department of Economics, Faculty of Economics and Business (ED-FEB), Gadjah Mada University, Indonesia.)

Abstract

Environmental issues have become an issue of recent interest due to climate change associated with increased levels of pollution and degradation of environmental quality as a result of increased human economic activity. This paper discusses the relationship between fossil fuel consumption, carbon dioxide emissions, and economic growth, the impacts of energy conservation, as well as the projection of energy mix in Indonesia by applying Vector Error Correction Model (VECM) Granger causality, and Long-run Energy Alternative Planning (LEAP). Empirical results show that in the short-run there are unidirectional Granger causalities running from coal consumption to output (growth hypothesis) and from output to oil consumption (conservation hypothesis). However, in the long-run the results suggest unidirectional Granger causality only running from oil consumption to output and carbon emissions. The projection results show that the result of LEAP Projection based on National Master Plan for Energy Conservation (RIKEN) 2005 target has a lower energy saving rate (17.32 percent) compared to the Vision 25/25 target (18 percent).

Suggested Citation

  • Traheka Erdyas Bimanatya & Tri Widodo, 2018. "Fossil Fuels Consumption, Carbon Emissions, and Economic Growth in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 90-97.
    • Handle: RePEc:eco:journ2:2018-04-12
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    Citations

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    Cited by:

    1. Karen Fernandes & Y. V. Reddy, 2020. "Energy Consumption and Economic Growth in Newly Industrialised Countries of Asia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 384-391.
    2. Aditya Prana Iswara & Jerry Dwi Trijoyo Purnomo & Lin-Han Chiang Hsieh & Aulia Ulfah Farahdiba & Andrian Dolfriandra Huruta, 2022. "More Is More? The Inquiry of Reducing Greenhouse Gas Emissions in the Upstream Petroleum Fields of Indonesia," Sustainability, MDPI, vol. 14(11), pages 1-18, June.
    3. Kelvan Darrian & Yohanes B. Kadarusman & Dandy Rafitrandi, 2023. "Energy and Economic Growth Nexus: A Long-run Relationship in Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 69, pages 1-14, Juni.
    4. Kartal, Mustafa Tevfik, 2022. "The role of consumption of energy, fossil sources, nuclear energy, and renewable energy on environmental degradation in top-five carbon producing countries," Renewable Energy, Elsevier, vol. 184(C), pages 871-880.
    5. Maxwell Chukwudi Udeagha & Nicholas Ngepah, 2022. "Disaggregating the environmental effects of renewable and non-renewable energy consumption in South Africa: fresh evidence from the novel dynamic ARDL simulations approach," Economic Change and Restructuring, Springer, vol. 55(3), pages 1767-1814, August.
    6. Ahmad Farabi & Azrai Abdullah & Rahmat Heru Setianto, 2019. "Energy Consumption, Carbon Emissions and Economic Growth in Indonesia and Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 338-345.
    7. 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.
    8. Jun Yin Lee & Renuga Verayiah & Kam Hoe Ong & Agileswari K. Ramasamy & Marayati Binti Marsadek, 2020. "Distributed Generation: A Review on Current Energy Status, Grid-Interconnected PQ Issues, and Implementation Constraints of DG in Malaysia," Energies, MDPI, vol. 13(24), pages 1-40, December.

    More about this item

    Keywords

    Fossil Fuel Consumption; CO 2 Emission; Economic Growth.;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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