Abstract
This study examines the short-run and long-run relationships between economic growth, carbon dioxide (CO2) emissions and energy consumption within a sample period of 1990-2016. The study used Autoregressive Distributed Lag (ARDL) approach to test the cointegration relationship and Granger Vector Error Correction Model (VECM) causality test to investigate the direction of causality. This study does not support the hypothetical relationship (EKC) for a significance level of 5%. The long-run test of Granger causality shows that there is a two-way causal relationship of economic growth, CO2 emissions, and energy consumption. This result indicates that a reduction in energy consumption is an effective way to control CO2 emissions but will simultaneously impede economic growth. Therefore, setting suitable policy related to efficient consumptions of energy resources and renewable energy resources is necessary.Keywords: Environmental Kuznets Curve, CO2 Emissions, Energy Consumption.JEL Classifications : Q42, Q43, C10DOI: https://doi.org/10.32479/ijeep.7816
Highlights
The relationship between energy consumption, economic development, and environmental damage has increasingly been discussed in various studies lately triggered by the increasing concern for environmental damage along with increasing awareness of global warming and climate change.Energy is one of the most important factors in transforming the country from a developing to a developed one
Indonesia is experiencing various environmental problems including climate change threat caused by rapid economic growth and extensive consumption of natural resources especially the burning of fossil fuels (Sugiawan and Managi, 2016)
Darwanto: The Damaging Growth: An Empiric Evidence of Environmental Kuznets Curve in Indonesia of which is generated from fossil fuels, with coal contributing around 52.8% of the total figure (National Energy Council, 2015)
Summary
The relationship between energy consumption, economic development, and environmental damage has increasingly been discussed in various studies lately triggered by the increasing concern for environmental damage along with increasing awareness of global warming and climate change.Energy is one of the most important factors in transforming the country from a developing to a developed one. The relationship between energy consumption, economic development, and environmental damage has increasingly been discussed in various studies lately triggered by the increasing concern for environmental damage along with increasing awareness of global warming and climate change. Especially fossil fuels, is the main cause of impact on air environment. Indonesia is experiencing various environmental problems including climate change threat caused by rapid economic growth and extensive consumption of natural resources especially the burning of fossil fuels (Sugiawan and Managi, 2016). (1996), Economic growth and environmental degradation: The environmental Kuznets curve and sustainable development. (2016), The environmental Kuznets curve in Indonesia: Exploring the potential of renewable energy. (1997), Testing for environmental Kuznets curves within a developing country. (2017), CO2 emissions, renewable energy and the environmental Kuznet curve, a panel cointegration approach.
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