Empirical study on energy consumption, carbon footprint, and economic growth in Indonesia

Abstract

Energy is a basic material that can be used for economic development. Increasing growth requires continuous energy exploration, so it requires new energy sources and technological innovations in energy. Energy consumption makes a big contribution in influencing climate change in the presence of carbon. In Indonesia, with a fairly dense population, it certainly increases the most energy consumption. Based on this, the purpose of this study is to analyze the relationship between variables of energy consumption, carbon footprint as an indicator of climate change and economic growth. The energy consumption used in this study is the consumption of electrical energy, oil, gas and energy innovation as alternative energy that can be realized. The method used is VARX analysis. The use of this method is to analyze the relationship between variables and analyze the resulting impact on each variable. The results show that there is a correlation between energy consumption and economic growth. In addition, there is a significant impact of shocks on the energy consumption variable. The higher the level of energy consumption, the higher the carbon footprint. energy consumption cannot prevent climate change, while energy consumption provides benefits in minimizing carbon. so that energy consumption in Indonesia needs to be controlled.