This study analyzes the relationship of inclusive economic development to the quality of the environment in Indonesia. Secondary data used was derived from Bappenas, Ministry of Environment and Forestry of the Republic of Indonesia, period from 2013 to 2017. The results showed that inclusive economic development still resulted in environmental degradation. The inclusive economic development index, which is one of the sustainable development goals that represent the achievement of economic dimensions and social dimensions, leads to degradation of the environmental extent. The Environmental Kuznets Curve did not occur in the year of observation of this study. The recommendation for stakeholders is to prioritize environmental sustainability in every policy taken. For future researchers may consider research to determine indicators of sustainable development, which are composite indicators consisting of all dimensions (economic, social, environmental).
This study offers sustainable development measurement using three variables, namely; The human development index (HDI) represents sustainable social economic development, and the environmental quality (EQ) represents Environmental Sustainability, while the exogenous variable is household electrification (EoH). With analysis using structural equation modeling, the results showed; EoH positively and significantly correlated to HDI. EoH is negatively correlated and significant to EQ. HDI significantly negatively correlated with EQ. Electrification of Households causes the occurrence of sustainable social economic development, and vice versa, the electrification of households causes the occurrence of environmental sustainability, and the relationship of sustainable social economic development causes the occurrence of environmental sustainability. Research novelty is the role of moderation from EoH to the relationship between HDI and EQ so that provinces with low household electrification with provinces with high household electrification will differ in environmental damage due to sustainable social economic development. Reference for policy makers to replace fossil fuel power plants that supply the electricity in households with environmentally friendly power plants.
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