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The Effect of Energy Consumption and Renewable Energy on Economic Growth in Indonesia

Author

Listed:
  • Sodik Dwi Purnomo

    (Faculty of Economics and Business, Wijayakusuma University Purwokerto, Indonesia,)

  • Nur Wani

    (Faculty of Economics and Business, Jenderal Soedirman University, Indonesia.)

  • Suharno Suharno

    (Faculty of Economics and Business, Jenderal Soedirman University, Indonesia.)

  • Arintoko Arintoko

    (Faculty of Economics and Business, Jenderal Soedirman University, Indonesia.)

  • Herman Sambodo

    (Faculty of Economics and Business, Jenderal Soedirman University, Indonesia.)

  • Lilis Siti Badriah

    (Faculty of Economics and Business, Jenderal Soedirman University, Indonesia.)

Abstract

The economic growth in Indonesia showed a stable trend while the growth in energy consumption showed a declining trend. However, previous studies had revealed the existence of positive and significant relationship between energy consumption and economic growth. This study aims to analyse the effect of oil, gas, and biomass fuel consumption, road infrastructure, life expectancy, and average length of education on economic growth in Indonesia during the year of 1990-2019. This study used quantitative approach with linear regression as data analysis method. The data used are time series data from the period of 1990-2019. The result of this study showed that oil, gas, and biomass fuel consumption, as well as average length of education have a positive and significant effect, while road infrastructure and life expectancy have no effect on economic growth in Indonesia for the year of 1990-2019. This study recommends: 1) energy reserves should be improved by increasing the number of energy sources and developing more infrastructure in order to support and boost the supply of energy, 2) quality of educations should be upgraded by giving out scholarships as well as improving the educators and physical infrastructure.

Suggested Citation

  • Sodik Dwi Purnomo & Nur Wani & Suharno Suharno & Arintoko Arintoko & Herman Sambodo & Lilis Siti Badriah, 2023. "The Effect of Energy Consumption and Renewable Energy on Economic Growth in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 22-30, January.
    • Handle: RePEc:eco:journ2:2023-01-4
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    References listed on IDEAS

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    Cited by:

    1. Feng, Yanchao & Zhang, Juan & Geng, Yong & Jin, Shurui & Zhu, Ziyi & Liang, Zhou, 2023. "Explaining and modeling the reduction effect of low-carbon energy transition on energy intensity: Empirical evidence from global data," Energy, Elsevier, vol. 281(C).
    2. Heru Cahyo & Sodik Dwi Purnomo & Sully Kemala Octisari & Mayla Surveyandini & Sri Sundari & Elly Kristiani Purwendah, 2023. "Environment, Population, and Economy on CO2 Emission in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 295-303, November.
    3. Gyanendra Singh Sisodia & Hemant Kumar Sah & Hajer Kratou & Rajesh Mohnot & Alberto Ibanez & Bhumika Gupta, 2023. "The Long-Run Effect of Carbon Emission and Economic Growth in European Countries: A Computational Analysis through Vector Error Correction Model," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 271-278, May.

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    More about this item

    Keywords

    Economic growth; renewable energy; infrastructure; human capital;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • 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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