The Economic Growth with Low Carbon Emissions: Evidence from Indonesian 10 Provinces

This study investigates potential measures to reduce CO2 emissions in Indonesia, focusing on ten provinces in Sumatra. The high dependency on fossil fuels has led to significant environmental issues, particularly CO2 emissions. The research examines potential ways to mitigate these emissions and evaluates whether they are influenced by economic activities across regions. Using panel data from 2017 to 2023, this quantitative descriptive study includes ten provinces in Sumatra and six in Java, employing spatial regression analysis. The variables analyzed are CO2 emissions, industrial agglomeration, GRDP of the manufacturing sector, GRDP of mining and quarrying, GRDP of agriculture, fisheries, and plantations, as well as GRDP of wholesale and retail trade, including vehicle repair. The findings reveal a positive Moran's I value for CO2 emissions, indicating a clustered pattern among the ten provinces in Sumatra over the study period. Industrial agglomeration, manufacturing GRDP, mining and quarrying GRDP, and GRDP in agriculture, fisheries, and plantations are positively and spatially correlated with CO2 emissions. Conversely, GRDP from wholesale and retail trade has a significant negative impact on emissions. Policy recommendations include reducing carbon emissions, promoting sustainable sectoral development, adopting green technologies, and conducting regular evaluations to ensure environmental and economic sustainability.