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Environmental Kuznets Curve: Economic Growth with Environmental Degradation In Indonesia

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  • Panji Kusuma Prasetyanto

    (Tidar University, Indonesia)

  • Farmila Sari

    (Tidar University, Indonesia)

Abstract

Environmental Kuznets Curve (EKC) is a hypothesis of the influence of the relationship between environmental degradation and economic growth (GDP per capita) in the perspective of economic development. The purpose of this research is to prove that there is an economic growth influence on environmental degradation in the U-shaped EKC hypothesis and to determine the influence of primary energy consumption, income inequality, education level and Environmental degradation in the Sustainable development of Indonesia. The study used the Error Correction Model (ECM) Engel and Granger estimation techniques to determine the short-term and long-term impact of the 1994-2018 period in Indonesia. The results showed that the EKC was proven in the short term as well as in the long term. Economic growth variables and primary energy consumption have a positive and significant effect on environmental degradation. Income inequality is negatively influential but not significant in the short or long term, the level of education in the short term is insignificant but positive and significant in the long term. For the export variables in the short term, the effect is positive and significant but not with long term against environmental degradation.

Suggested Citation

  • Panji Kusuma Prasetyanto & Farmila Sari, 2021. "Environmental Kuznets Curve: Economic Growth with Environmental Degradation In Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 622-628.
    • Handle: RePEc:eco:journ2:2021-05-72
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    References listed on IDEAS

    as
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    4. Hadi Sasana & Jaka Aminata, 2019. "Energy Subsidy, Energy Consumption, Economic Growth, and Carbon Dioxide Emission: Indonesian Case Studies," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 117-122.
    5. Torras, Mariano & Boyce, James K., 1998. "Income, inequality, and pollution: a reassessment of the environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 25(2), pages 147-160, May.
    6. Rahman, Mohammad Mafizur, 2017. "Do population density, economic growth, energy use and exports adversely affect environmental quality in Asian populous countries?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 506-514.
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    Cited by:

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    2. Gao, Jinchao & Hassan, Muhammad Shahid & Kalim, Rukhsana & Sharif, Arshian & Alkhateeb, Tarek Tawfik Yousef & Mahmood, Haider, 2023. "The role of clean and unclean energy resources in inspecting N-shaped impact of industrial production on environmental quality: A case of high polluting economies," Resources Policy, Elsevier, vol. 80(C).

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    More about this item

    Keywords

    Carbondioxide emissions; Environment Kuznets Curve; Error Correction Model; economic growth; Sustainable Development;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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