Analysis of New Renewable Energy (EBT) Electricity on Green Economy in Indonesia and Influence Factors

Abstract

Indonesia's electricity consumption reached 1,109 kilowatt hours (kWh) per capita in the third quarter of 2021. Power generation in Indonesia is dominated by the use of coal which has negative environmental impacts, one of which is carbon emissions (CO2) and extreme climate change. renewable energy, as a strategic option for mitigating environmental problems. This study examines the effect of renewable energy electricity on the green economy in Indonesia. The purpose of this study 1) To analyze the effect of renewable electricity, CO2 emissions, population, economic openness, foreign investment and coal consumption on green gross domestic product in Indonesia. 2) To analyze the effectiveness of government policies in developing renewable electric power in Indonesia. The method used in this study is the error correction model to determine the long-term and short-term effects between variables. The data used in this study is from 1990-2019. The results of the study found that the variables that affect the short and long term green economy in Indonesia are renewable electricity, carbon emissions, population, coal consumption and trade openness. Meanwhile, the variable that does not affect the short and long term green economy in Indonesia is foreign investment.