The trade-off between Poverty and Environmental Degradation: Evidence from Indonesia

Abstract

Poverty and environmental issues are correlated. Many reports suggest that poverty contributes to environmental degradation. Therefore, it is believed that the improvement of the quality of the environment must be started by alleviating poverty. The objectives of this study are to find the impact of poverty to environmental degradation and vice versa. This study uses data panel from 33 provinces in Indonesia from 2012 to 2017. Contrary to the belief, the result shows that the effort to reduce poverty resulting in environmental degradation. On the other way, one of the findings shows that the efforts to improve the quality of environment resulting in a high level of poverty. This implies that there is a consequence of reducing poverty, i.e. low quality of the environment. The trade-off occurs because when the government tries to reduce the poverty rate, then the quality of the environment also reduces. If the government wants to improve the quality of the environment, then the level of poverty will increase. This study suggests that the government must carefully conduct the poverty alleviation programs that create less harm to the environment and the government also needs to make regulations to protect the environment without harm the poor.

The Determinants of Environmental Quality in Indonesia

“…Strict government regulations related to environmental protection will actually lead to an increase in the number of poor people due to limited access to natural resources. The research results of Setyadharma et al, (2020) are in line with research by AK. Duraiappah, (1998) which concluded that initially the poor were not the direct cause of environmental damage.…”

“…The results of this study support research by (Setyadharma et al, 2020). Provincial data in Indonesia shows that areas that have high economic growth are not followed by a decrease in poverty rates (Oktavilia et al, 2018).…”

“…Several studies have found a trade-off between poverty, the Human Development Index and environmental quality. Research (Setyadharma et al, 2020) carried out in 33 provinces in Indonesia in 2012-2017 found a trade-off between poverty and environmental degradation. The results of the study concluded that there is a unique relationship between poverty and environmental quality.…”

“…In reducing environmental degradation, the government seeks to protect the environment by issuing various environmental regulations (Liu et al, 2019). It turns out that environmental protection regulations are actually considered to result in an increase in the number of poor people due to limited access to the use of natural resources for their livelihood (Chaigneau et al, 2018;Wang et al, 2020;Setyadharma et al, 2020).…”

Breaking barriers to low-carbon development in Indonesia: deployment of renewable energy

“…They arguments implied that policy to reduce income inequality should not lead to an increase in carbon emissions, except in the case of low-income countries, a trade-off is absent. In the case of Indonesia, Setyadharma et al. (2020) , said that efforts to reduce poverty have an impact on decreasing environmental quality.…”