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Energy consumption, CO 2 emissions, and economic growth: evidence from Indonesia

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  • Jo-Hee Hwang

    ()

  • Seung-Hoon Yoo

    ()

Abstract

Energy policy-makers in Indonesia are interested in the causal relationship between energy consumption, CO 2 emissions, and economic growth. Therefore, this paper attempts to analyze the short- and long-run causality issues between energy consumption, CO 2 emissions, and economic growth in Indonesia using time-series techniques. To this end, annual data covering the period 1965–2006 are employed and tests for unit roots, co-integration, and Granger-causality based on an error-correction model are applied. The results show that there is a bi-directional causality between energy consumption and CO 2 emissions. This means that an increase in energy consumption directly affects CO 2 emissions and that CO 2 emissions also stimulate further energy consumption. In addition, the results support the occurrence of uni-directional causality running from economic growth to energy consumption and to CO 2 emissions without any feedback effects. Thus, energy conservation and/or CO 2 emissions reduction policies can be initiated without the consequent destructive economic side effects. Copyright Springer Science+Business Media B.V. 2014

Suggested Citation

  • Jo-Hee Hwang & Seung-Hoon Yoo, 2014. "Energy consumption, CO 2 emissions, and economic growth: evidence from Indonesia," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 63-73, January.
  • Handle: RePEc:spr:qualqt:v:48:y:2014:i:1:p:63-73
    DOI: 10.1007/s11135-012-9749-5
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    References listed on IDEAS

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    Cited by:

    1. Kasman, Adnan & Duman, Yavuz Selman, 2015. "CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: A panel data analysis," Economic Modelling, Elsevier, vol. 44(C), pages 97-103.
    2. Shahbaz, Muhammad & Mahalik, Mantu Kumar & Shah, Syed Hasanat & Sato, João Ricardo, 2016. "Time-varying analysis of CO2 emissions, energy consumption, and economic growth nexus: Statistical experience in next 11 countries," Energy Policy, Elsevier, vol. 98(C), pages 33-48.
    3. Erdyas Bimanatya, Traheka & Widodo, Tri, 2017. "Energy Conservation, Fossil Fuel Consumption, CO2 Emission and Economic Growth in Indonesia," MPRA Paper 79989, University Library of Munich, Germany.
    4. repec:eco:journ2:2017-05-19 is not listed on IDEAS
    5. repec:eee:enepol:v:111:y:2017:i:c:p:179-192 is not listed on IDEAS
    6. repec:spr:endesu:v:19:y:2017:i:4:d:10.1007_s10668-016-9790-y is not listed on IDEAS
    7. Azam, Muhammad, 2016. "Does environmental degradation shackle economic growth? A panel data investigation on 11 Asian countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 175-182.

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