Is the Environmental Kuznets Curve (EKC) hypothesis valid on CO2 emissions in Indonesia?

Abstract

ABSTRACT This study used the Autoregressive Distributed Lags (ARDL) model to confirm the validity of the Environmental Kuznets Curve (EKC) hypothesis on carbon dioxide (CO2) emissions in Indonesia, considering income, fossil energy consumption, renewable energy consumption, and forest moratorium and restoration policies. In the long-run, our model suggests that CO2 emissions will continue to rise simultaneously with income, implying that the EKC hypothesis is not valid for CO2 emissions in Indonesia. We found that fossil energy consumption has a positive effect on the rise of CO2 emissions, whereas renewable energy consumption, forest moratoriums, and forest restoration policies have a negative impact on CO2 emissions. This research emphasises the necessity of reducing reliance on fossil energy, increasing the use of renewable energy, and conserving Indonesia’s forests.