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The Damaging Growth: An Empiric Evidence of Environmental Kuznets Curve in Indonesia

Author

Listed:
  • Darwanto Darwanto

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

  • Nenik Woyanti

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

  • Purbayu Budi Santosa

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

  • Hadi Sasana

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

  • Imam Ghozali

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

Abstract

This study examines the short-run and long-run relationships between economic growth, carbon dioxide (CO2) emissions and energy consumption within a sample period of 1990-2016. The study used autoregressive distributed lag approach to test the cointegration relationship and Granger vector error correction model causality test to investigate the direction of causality. This study does not support the hypothetical relationship (environmental Kuznets curve) for a significance level of 5%. The long-run test of Granger causality shows that there is a two-way causal relationship of economic growth, CO2 emissions, and energy consumption. This result indicates that a reduction in energy consumption is an effective way to control CO2 emissions but will simultaneously impede economic growth. Therefore, setting suitable policy related to efficient consumptions of energy resources and renewable energy resources is necessary.

Suggested Citation

  • Darwanto Darwanto & Nenik Woyanti & Purbayu Budi Santosa & Hadi Sasana & Imam Ghozali, 2019. "The Damaging Growth: An Empiric Evidence of Environmental Kuznets Curve in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 339-345.
  • Handle: RePEc:eco:journ2:2019-05-37
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    References listed on IDEAS

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    More about this item

    Keywords

    Environmental Kuznets Curve; CO2 Emissions; 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
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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