Nexus between rural poverty and environmental quality: empirical evidence from Indonesia

Two primary objectives of sustainable development goals are poverty reduction and environmental quality. Recent findings, however, point to a potential conflict between pursuing these two objectives. This study aimed to investigate the existence of a dilemma between rural poverty and environmental quality in Indonesia. Unlike previous studies, we focused on rural poverty and environmental quality index to examine the poverty-environmental degradation nexus. We also attempted to reveal the socio-economic dynamics that affect rural poverty and environmental quality. We used the data from 33 provinces of Indonesia between 2015 and 2022 and employed the system-generalized method of moments (SysGMM) approach. The results showed that rural poverty and environmental quality support trade-off relationships that improve environmental quality and increase rural poverty. Population density and income inequality hindered the improvement of environmental quality. Meanwhile, human development, rural labor wages, and information communication and technology (ICT) supported the improvement of environmental quality. Economic growth, electricity access, and ICT supported the alleviation of the rural poor. Therefore, the central and regional governments should make efforts to reduce income inequality and increase ICT access to simultaneously improve the quality of the environment and reduce rural poverty.