The Relationship between the Renewable Energy and CO2 Emissions to the Indonesian Economy

Abstract

The Indonesian government through the National Energy Council (DEN) has a target for new renewable energy to be increased, starting from 2025 with a target of 23 percent to 2060 with a target of 66 percent, but in fact new renewable energy in Indonesia only increases 0.55 percent per year. Indonesia has great potential, but can the potential be maximized by the government in the direction of a better and environmentally friendly energy policy. This study analyzes the movement of renewable energy and C02 emissions to the Indonesian economy from 1990-2021, using the Vector Error Correction Model (VECM) statistical method by considering short-term and long-term results in the model. The results show that in the long and short term economy the role of GDP per unit of energy use for the economy is needed and has a positive effect, the role of carbon emissions in the short and long term C02 has a positive and significant direction, non-renewable energy in the long term and short term is still moving negative and significant, this indicates that renewable energy in Indonesia tends to be low, energy replacement must be carried out slowly and gradually, shock response conditions conclude when GDP energy use and CO2 are affected by a negative shock will disrupt economic development, meanwhile, if there is a negative shock on consumption Renewable energy still tends to be stable and positive for the development of the Indonesian economy.

Macroeconomic Influencing Factors on Co2 Emissions in Rwanda: Short-Run Dynamics and Long-Run Equilibrium

“…Its increase by one unit leads to a decrease in carbon dioxide emissions by 0.92 units, which is the same result,(Zhang et al, 2022) indicating that there is a possibility to reduce energy consumption and carbon dioxide emissions(Anwar et al, 2022) (Lin et al, 2014), while in the long term, a positive relationship has been recorded and it corresponds to its results,(Tian et al, 2014) as changing the production structure, especially in the construction and services sectors, is an important source of growth of carbon dioxide emissions.With regard to the consumption of renewable energies, the short and long-term results indicate that there is a negative and moral impact on the emission of CO2 by coe cients 3,83 and 1.89, respectively, which are the same results(Wahyudi, 2024),(Li & Haneklaus, 2022) (Elmonshid et al, 2024) (Hatmanu et al, 2022) in the study he conducted on Romania and re ected his ndings in the State of Bulgaria as well as Panigrahi, who found a direct relationship. In…”

“…The research yielded practical implications for governments and businesses to enhance their comprehension of the economic rami cations of human activities on the environment. (Wahyudi, 2024) investigated the correlation between renewable energy and CO2 emissions in Indonesia by employing VAR and VECM estimation methods.…”

“…In order to study the emission of carbon dioxide in the State of Rwanda during the period 1990-2022, an econometric model was used that was formulated according to (Chin et al, 2018), (Pao & Tsai, 2010) in (Wahyudi, 2024) which the researchers relied on an econometric model consisting mainly of the emission of carbon dioxide CO2 as a dependent variable and both domestic product, foreign direct investment and the consumption of renewable energies as independent variables (Table 1) Thus, the model that we will adopt in this study is the same model on which the aforementioned studies were based, with the addition of some other explanatory variables that have a relationship or impact on the increase in carbon dioxide emission, such as the industrial sector (Eq. 1).…”