The Effect of Energy Sources and CO2 Emission on Indonesia’s Economic Growth in Different Regime
https://doi.org/10.56225/finbe.v2i1.194
Keywords:
economic growth, energy, CO2, IndonesiaAbstract
One of the country's economic development indicators is reflected in the country's economic growth. Objective: This study was conducted to examine the effect of the use of energy sources and CO2 emissions on economic growth in different regime in Indonesia. Data and Method: The data used are annual time series data published by World Development Indicators (WDI) database during the year 2004-2019.The data analysis method used is the ARDL regression approach model. Result: The results of the study found that CO2 gas emissions in the short and long term do not affect economic growth. The use of imported energy and energy use has a negative effect on economic growth in the short term. Meanwhile, in the long term, it has a positive effect on economic growth. Furthermore, this study found that renewable electricity output has a positive effect on economic growth in both the short and long term and renewable energy cons has no effect on economic growth in the short and long term. Finally, this study found that the difference between the regime of the SBY and JKW periods influenced economic growth.
Downloads
References
Ahmad, N., & Du, L. (2017). Effects of energy production and CO 2 emissions on economic growth in Iran: ARDL approach. Energy, 123(15), 521–537. https://doi.org/10.1016/j.energy.2017.01.144
Antonakakis, N., Chatziantoniou, I., & Filis, G. (2017). Energy consumption, CO 2 emissions, and economic growth: An ethical dilemma. Renewable and Sustainable Energy Reviews, 68(1), 808–824. https://doi.org/10.1016/j.rser.2016.09.105
Apergis, N., & Payne, J. E. (2011). The renewable energy consumption–growth nexus in Central America. Applied Energy, 88(1), 343–347. https://doi.org/10.1016/j.apenergy.2010.07.013
Azam, M., & Raza, A. (2022). Does foreign direct investment limit trade-adjusted carbon emissions: fresh evidence from global data. Environmental Science and Pollution Research, 29(25), 37827–37841. https://doi.org/10.1007/s11356-021-18088-9
Charfeddine, L., & Kahia, M. (2019). Impact of renewable energy consumption and financial development on CO2 emissions and economic growth in the MENA region: A panel vector autoregressive (PVAR) analysis. Renewable Energy, 139(1), 198–213. https://doi.org/10.1016/j.renene.2019.01.010
Dogan, E. (2016). Analyzing the linkage between renewable and non-renewable energy consumption and economic growth by considering structural break in time-series data. Renewable Energy, 99(1), 1126–1136. https://doi.org/10.1016/j.renene.2016.07.078
Esen, Ö., & Bayrak, M. (2017). Does more energy consumption support economic growth in net energy-importing countries? Journal of Economics, Finance and Administrative Science, 22(42), 75–98. https://doi.org/10.1108/JEFAS-01-2017-0015
Falianty, T. A. (2003). Tinjauan terhadap Metode Ekonometrika Lanjutan. Jurnal Ekonomi Dan Pembangunan Indonesia, 4(1), 59–74. https://doi.org/10.21002/jepi.v4i1.133
Foxon, T. J. (2017). Energy and Economic Growth: Why we need a new pathway to prosperity. Routledge.
Ghazouani, T., Boukhatem, J., & Yan Sam, C. (2020). Causal interactions between trade openness, renewable electricity consumption, and economic growth in Asia-Pacific countries: Fresh evidence from a bootstrap ARDL approach. Renewable and Sustainable Energy Reviews, 133(1), 94–110. https://doi.org/10.1016/j.rser.2020.110094
Gokmenoglu, K. K., & Sadeghieh, M. (2019). Financial Development, CO 2 Emissions, Fossil Fuel Consumption and Economic Growth: The Case of Turkey. Strategic Planning for Energy and the Environment, 38(4), 7–28. https://doi.org/10.1080/10485236.2019.12054409
Gozgor, G., Lau, C. K. M., & Lu, Z. (2018). Energy consumption and economic growth: New evidence from the OECD countries. Energy, 153, 27–34. https://doi.org/10.1016/j.energy.2018.03.158
Gujarati, D. N. (2003). Basic Econometrics” fourth edition McGraw-Hill. In New York.
Gujarati, D., & Porter, D. C. (2006). Fundamentals of econometrics. In Jakarta: Penerbit Erlangga.
Haseeb, M., Abidin, I. S. Z., Hye, Q. M. A., & Hartani, N. H. (2019). The impact of renewable energy on economic well-being of Malaysia: Fresh evidence from auto regressive distributed lag bound testing approach. International Journal of Energy Economics and Policy, 9(1), 269–275.
Ibrahiem, D. M. (2015). Renewable Electricity Consumption, Foreign Direct Investment and Economic Growth in Egypt: An ARDL Approach. Procedia Economics and Finance, 30(1), 313–323. https://doi.org/10.1016/S2212-5671(15)01299-X
Ito, K. (2017). CO2 emissions, renewable and non-renewable energy consumption, and economic growth: Evidence from panel data for developing countries. International Economics, 151, 1–6. https://doi.org/10.1016/j.inteco.2017.02.001
Jamali, K., Wandschneider, K., & Wunnava, P. V. (2007). The effect of political regimes and technology on economic growth. Applied Economics, 39(11), 1425–1432. https://doi.org/10.1080/00036840500447906
Kahia, M., Aïssa, M. S. Ben, & Lanouar, C. (2017). Renewable and non-renewable energy use - economic growth nexus: The case of MENA Net Oil Importing Countries. Renewable and Sustainable Energy Reviews, 71(1), 127–140. https://doi.org/10.1016/j.rser.2017.01.010
Kasperowicz, R., Bilan, Y., & Štreimikienė, D. (2020). The renewable energy and economic growth nexus in European countries. Sustainable Development, 28(5), 1086–1093. https://doi.org/10.1002/sd.2060
Knutsen, C. H. (2021). A business case for democracy: regime type, growth, and growth volatility. Democratization, 28(8), 1505–1524. https://doi.org/10.1080/13510347.2021.1940965
Mardani, A., Streimikiene, D., Cavallaro, F., Loganathan, N., & Khoshnoudi, M. (2019). Carbon dioxide (CO2) emissions and economic growth: A systematic review of two decades of research from 1995 to 2017. Science of The Total Environment, 649(1), 31–49. https://doi.org/10.1016/j.scitotenv.2018.08.229
Mensah, I. A., Sun, M., Gao, C., Omari-Sasu, A. Y., Zhu, D., Ampimah, B. C., & Quarcoo, A. (2019). Analysis on the nexus of economic growth, fossil fuel energy consumption, CO2 emissions and oil price in Africa based on a PMG panel ARDL approach. Journal of Cleaner Production, 228(10), 161–174. https://doi.org/10.1016/j.jclepro.2019.04.281
Muhammad, B. (2019). Energy consumption, CO2 emissions and economic growth in developed, emerging and Middle East and North Africa countries. Energy, 179, 232–245. https://doi.org/10.1016/j.energy.2019.03.126
Obradović, S., & Lojanica, N. (2017). Energy use, CO 2 emissions and economic growth – causality on a sample of SEE countries. Economic Research-Ekonomska Istraživanja, 30(1), 511–526. https://doi.org/10.1080/1331677X.2017.1305785
Paramati, S. R., Mo, D., & Gupta, R. (2017). The effects of stock market growth and renewable energy use on CO2 emissions: Evidence from G20 countries. Energy Economics, 66(1), 360–371. https://doi.org/10.1016/j.eneco.2017.06.025
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. https://doi.org/10.1002/jae.616
Shahbaz, M., Raghutla, C., Chittedi, K. R., Jiao, Z., & Vo, X. V. (2020). The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index. Energy, 207(15), 118–162. https://doi.org/10.1016/j.energy.2020.118162
Silalahi, D. K. (2020). Forecasting of Poverty Data Using Seasonal ARIMA Modeling in West Java Province. JTAM | Jurnal Teori Dan Aplikasi Matematika, 4(1), 76–86. https://doi.org/10.31764/jtam.v4i1.1888
Stern, D. I. (2015). International Energy and Poverty. In L. Guruswamy (Ed.), Annals of the New York Academy of Sciences (Vol. 1219, Issue 1). Routledge. https://doi.org/10.4324/9781315762203
Szustak, G., Dąbrowski, P., Gradoń, W., & Szewczyk, Ł. (2021). The Relationship between Energy Production and GDP: Evidence from Selected European Economies. Energies, 15(1), 50. https://doi.org/10.3390/en15010050
Yang, M., & Kim, J. (2020). Revisiting the Relation between Renewable Electricity and Economic Growth: A Renewable–Growth Hypothesis. Sustainability, 12(8), 21–31. https://doi.org/10.3390/su12083121
Yapatake Kossele, T. P., & Njong, M. A. (2020). Capital flight and diamond exports in the Central African Republic: The role of political governance crisis. African Development Review, 32(3), 362–374. https://doi.org/10.1111/1467-8268.12445
Zangoei, S., Salehnia, N., & Khodaparast Mashhadi, M. (2021). A comparative study on the effect of alternative and fossil energy consumption on economic growth and foreign direct investment in selected countries using SUR approach. Environmental Science and Pollution Research, 28(16), 19799–19809. https://doi.org/10.1007/s11356-020-11575-5
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Authors
This work is licensed under a Creative Commons Attribution 4.0 International License.
