CO2 Emissions in Indonesia: The Role of Urbanization and Economic Activities towards Net Zero Carbon

Abstract

This study aims to analyze the nexus between CO2 emissions, urbanization, and economic activity, as well as identify whether the pollution haven hypothesis is proven in Indonesia. It utilized time series data of Indonesia during the 1971–2019 period. Furthermore, the vector error correction model (VECM) was used to determine the long-run and short-run interplay using cointegration and Granger causality approaches. The empirical results showed the pollution haven hypothesis occurred in Indonesia. A long-term relationship with CO2 emissions was observed from the model. In addition, unidirectional causality occurred from urbanization, economic growth, exports, and foreign direct investment to CO2 emissions in the short term. It was concluded that the achievement of the Paris Agreement will be successful when the committed countries are courageous in transforming their economy. However, major adjustments are needed, where all parties need to have the same vision towards net zero carbon.

Spatial Effects of Economic Activity and Environmental Carrying Capacity on Air Quality in Java and Bali Islands

“…The high population density in Java and Bali Islands falls into the category of very high, which results in a decrease in air quality with an increase in urbanization. These findings align with the negative impulse response of CO2 IOP Publishing doi:10.1088/1755-1315/1248/1/012025 8 emissions at the national level to urbanization [24]. This indicates that the population density in Java and Bali Islands is in the counter-urbanization phase in the short term.…”

“…This decline is due to the decreasing environmental carrying capacity to absorb the negative externalities arising from high-production activities in densely populated regions. This is supported by the modified Klassen typology study [14], which found that 6 provinces in Java Island, 4 of which are in quadrant 2. Quadrant 2 represents advanced but pressured regions (where the growth of per capita income is increasing, but the growth of environmental carrying capacity is less favorable).…”

“…The environmental carrying capacity variable is modified based on Klassen's typology and classified into quadrants based on economic and environmental indicators. The determination of Quadrants 1 to 4 utilizes the Classification of Environmental Carrying Capacity Matrix Applying Klassen Typology [14].…”

“…Two other provinces, Banten Province, are in Quadrant 3, and DKI Jakarta is in Quadrant 1. [14] also states that regions in Quadrant 2 and 3 are provinces with poor environmental carrying capacity in absorbing air pollutants. In other words, the majority of provinces in Java Island do not have sufficient environmental resilience to minimize negative externalities from export activities.…”

The Impact of Low-Carbon City (LCC) on Elderly People’s Health: Evidence from a Natural Experiment in China

“…Nevertheless, rapid economic growth, excessive urbanization, and extensive economic development have created serious pressures on urban infrastructures, living conditions, and environmental pollution [ 3 ]. They also pose a threat to the health of residents [ 4 ].…”