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Role of Institutional Quality and Financial Developments in Realizing Clean Energy Legislation in Indonesia

Author

Listed:
  • Supriyadi Supriyadi

    (University of Merdeka Malang, Indonesia)

  • Kazi Sohag

    (Ural Federal University, Russia)

  • Dani Yuniawan

    (University of Merdeka Malang, Indonesia)

  • Diyah Sukanti Cahyaningsih

    (University of Merdeka Malang, Indonesia)

  • Grahita Chandrarin

    (University of Merdeka Malang, Indonesia)

  • Dewi Astutty Mochtar

    (University of Merdeka Malang, Indonesia)

Abstract

This study examines the intersection of financial markets and institutional quality (IQ) in enhancing clean energy production and access in Indonesia, a country that has placed a strong emphasis on renewable energy (RE) through its legislative framework. Utilizing various econometric methods, including Dynamic and fully-modified ordinary least squares (OLS), and dynamic simulated autoregressive distributed lag (ARDL) models, we analyze time series data from 1996 to 2022. The outcomes underscore the pivotal role of IQ (encompassing indicators like control of corruption, rule of law, regulatory quality, government effectiveness, political stability, and voice & accountability) in fostering the adoption of RE sources and broadening the reach of clean cooking energy. Although the impact of financial markets in isolation yields inconclusive findings, their intersection with IQ consistently bolsters Indonesia’s transition towards clean energy. This study puts forth various practical implications for policymakers seeking to bolster the efficacy of clean energy policies.

Suggested Citation

  • Supriyadi Supriyadi & Kazi Sohag & Dani Yuniawan & Diyah Sukanti Cahyaningsih & Grahita Chandrarin & Dewi Astutty Mochtar, 2024. "Role of Institutional Quality and Financial Developments in Realizing Clean Energy Legislation in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 161-173, November.
    • Handle: RePEc:eco:journ2:2024-06-16
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    More about this item

    Keywords

    Renewable Energy; Rule of Law; Control of Corruption; Regulatory Quality; Government Effectiveness; Political Stability;
    All these keywords.

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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