The environmental Kuznets curve in Indonesia: Exploring the potential of renewable energy

Abstract

There is an increasing interest in investigating the environmental Kuznets curve (EKC) hypothesis because it suggests the existence of a turning point in the economy that will lead to a sustainable development path. Although many studies have focused on the EKC, only a few empirical studies have focused on analyzing the EKC with specific reference to Indonesia, and none of them have examined the potential of renewable energy sources within the EKC framework. This study attempts to estimate the EKC in the case of Indonesia for the period of 1971-2010 by considering the role of renewable energy in electricity production, using the autoregressive distributed lag (ARDL) approach to cointegration as the estimation method. We found an inverted U-shaped EKC relationship between economic growth and CO2 emissions in the long run. The estimated turning point was found to be 7,729 USD per capita, which lies outside of our sample period. The beneficial impacts of renewable energy on CO2 emission reduction are observable both in the short run and in the long run. Our work has important implications both for policymakers and for the future development of renewable energy in Indonesia.

Estimation of Environmental Kuznets Curve for CO2 emission: Role of renewable energy generation in India

“…This result is in the similar lines with the findings of Tiwari [36]. For the contexts other than India, this result is supported by Lund and Mathiesen [37] for Denmark, and Sugiawan and Managi [16] for Indonesia. The higher long run elasticity in this case indicates that environmental benefits of renewable energy generation will be achieved in the long run, and it might not be a temporary phenomenon.…”

“…They have used FMOLS and DOLS to estimate EKC, and they found the EKC to be inverted U-shaped, with the turnaround point to be between $59,010.76 and $72,264.18. Sugiawan and Managi [16] estimated the EKC for Indonesia over the period of 1971-2010. They have used ARDL bounds test approach to estimate EKC, and they found the EKC to be inverted U-shaped, with the turnaround point to be at $7,729.24.…”

The environmental consequences of fossil fuels in China: National and regional perspectives

“…For instance, at the national level, using an autoregressive distributed lag model, Iwata, Okada, and Samreth () examine the EKC hypothesis in France by considering the role of nuclear energy consumption. Similar studies investigating the EKC hypothesis at the national level have been conducted by Kunnas and Myllyntaus () for Finland; Ozturk and Acaravci () for Turkey; Park and Lee () for the Republic of Korea; Brajer, Mead, and Xiao (), Jayanthakumaran and Liu (), and Liu, Zhou, and Wu () for China; Bekhet and Othman (), Saboori, Sulaiman, and Mohd (), and Saboori and Sulaiman () for Malaysia; Tiwari, Shahbaz, and Hye () for India; Katircioğlu () for Singapore; Shahbaz, Khraief, Uddin, and Ozturk () for Tunisia; Sugiawan and Managi () for Indonesia; Atasoy () for the United States; and Olale, Ochuodho, Lantz, and El Armali () for Canada. Furthermore, at the regional level, the EKC hypothesis has been tested by a number of scholars, such as Atici () for the central and eastern Europe; Pao and Tsai () for a panel of Brazil, Russia, India, and China countries; Acaravci and Ozturk () for Europe; Arouri, Youssef, M'henni, and Rault () for Middle East and North African countries; Ozcan () for Middle East countries; Bölük and Mert () for a panel of European Union countries; Ozturk () for Brazil, Russia, India, China, and South Africa countries; Heidari, Katircioğlu, and Saeidpour () for five Association of South East Asian Nations countries; Bilgili, Koçak, and Bulut () for 17 Organization for Economic Cooperation and Development countries; Shahbaz, Solarin, and Ozturk () for 19 African countries; Charfeddine and Mrabet () for 15 Middle East and North African countries; and Dong, Sun, Jiang, and Zeng () for 14 Asia‐Pacific countries.…”

Exploring the relationship between energy usage segregation and environmental degradation in N-11 countries

“…Abdou and Atya (2013) Distributed Lag (ARDL) approach, they determine that an EKC does not exist for Indonesia. Sugiawan and Managi (2016) estimate the EKC for Indonesia during 1971-2010 but present contradictory empirical evidences. Few EKC estimation studies have been conducted in the Korean context, and one of the earliest studies is conducted by Kim and Jung (2014 Using the cointegration approach, they find evidence of an inverted U-shaped EKC in Vietnam.…”