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Renewable and Non-renewable Energy Consumption in Indonesia: Does it Matter for Economic Growth?

Author

Listed:
  • Khairul Aswadi

    (Faculty of Economics and Bussines, Universitas Syiah Kuala, Banda Aceh, Indonesia; Faculty of Economics and Bussines, Universitas Islam Kebangsaan Indonesia, Bireuen, Indonesia.)

  • Abd. Jamal

    (Faculty of Economics and Bussines, Universitas Syiah Kuala, Banda Aceh, Indonesia,)

  • Sofyan Syahnur

    (Faculty of Economics and Bussines, Universitas Syiah Kuala, Banda Aceh, Indonesia,)

  • Muhammad Nasir

    (Faculty of Economics and Bussines, Universitas Syiah Kuala, Banda Aceh, Indonesia,)

Abstract

During the last decade, the energy sector has become important in shaping a country's economy. This study aims to analyze renewable and non-renewable energy's impact on Indonesia's economic growth. This study uses a quantitative method, using the Johansen cointegration test and FMOLS and DOLS cointegrating regression. The data period used in this study is from 1980-2019. The results of the study show that renewable energy consumption has a negative effect on Indonesia's economic growth. This is because renewable energy production is still limited, but the level of consumption continues to increase. Consumption of non-renewable energy has a positive effect on Indonesia's economic growth. The consumption of fossil energy causes this is still very high in Indonesia. Dependence on fossil energy is still high amid renewable energy production, which the government is continuously promoting. In general, energy consumption positively affects Indonesia's economic growth. When the two are combined, they positively contribute to the national economy.

Suggested Citation

  • Khairul Aswadi & Abd. Jamal & Sofyan Syahnur & Muhammad Nasir, 2023. "Renewable and Non-renewable Energy Consumption in Indonesia: Does it Matter for Economic Growth?," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 107-116, March.
    • Handle: RePEc:eco:journ2:2023-02-12
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    References listed on IDEAS

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    More about this item

    Keywords

    Cointegrating regression; Economic growth; Non-renewable energy consumption; Renewable energy consumption;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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