Causality Gross Domestic Product (GDP) and Air Pollution. An Overview of Environment Kuznets Curve (EKC) Case: Indonesia

Wijayanti, Diah Lufti; Sugiyanto, FX; Firmansyah, Firmansyah

doi:10.1166/asl.2018.11313

Cited by 4 publications

(3 citation statements)

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“…In the case of squared real GDP, coefficient with a positive sign denotes carbon emission increasing as economic growth is increasing confirming a break-out of the initial decreasing relationship at the peak level of income (real GDP). This aligns with the findings of Wijayanti and Sugiyanto ( 2018 ) for Indonesia, Hossain ( 2012 ) for Japan, Ang ( 2008 ) for Malaysia, and Bekhet et al ( 2014 ) for UAE and Saudi Arabia. However, our findings contradict the findings by Sugiawan and Managi ( 2016 ) for Indonesia.…”

Section: Empirical Results and Discussionsupporting

confidence: 90%

Policy insight from renewable energy, foreign direct investment (FDI), and urbanization towards climate goal: insight from Indonesia

Udemba

Philip

2022

Environ Sci Pollut Res

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This study is premised on Indonesia’s climate goal amidst good economic performance. To test the environmental implication of this macroeconomic performance of Indonesia, we adopt Indonesian quarterly data of 1990Q1–2018Q4 for empirical analysis. Relevant instruments in the economic performance of Indonesia such as urbanization, foreign direct investment (FDI), and renewable energy source are all adopted for accurate estimations and analysis of this topic. Different approaches (structural break test, autoregressive distributed lag (ARDL)-bounds testing and Granger causality) are all adopted in this study. Our analysis and policy recommendations are based on the short-run and long-run ARDL dynamics and Granger causality. Findings from ARDL confirmed negative relationship between carbon emission and renewable energy source, FDI, and urbanization. Also, a U-shape instead of inverted U-shaped EKC is found confirming the impeding implication of Indonesian economic growth to its environmental performance if not checkmate. From Granger causality analysis, all the variables are seen transmitting to urbanization in a one-way causal relationship. Also, FDI and renewable energy prove to be essential determinants of the country’s environment development; hence, FDI is seen transmitting to both energy sources (fossil fuels and renewables) in a one-way causal relationship. Renewable energy is as well seen having two ways causal relationship with both carbon emission and fossil fuels. This result has equally exposed the significant position of the three instruments (urbanization, FDI, and renewable energy source) in Indonesian environment development.

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Section: Empirical Results and Discussionsupporting

confidence: 90%

Policy insight from renewable energy, foreign direct investment (FDI), and urbanization towards climate goal: insight from Indonesia

Udemba

Philip

2022

Environ Sci Pollut Res

View full text Add to dashboard Cite

show abstract

“…In the case of squared real GDP, coefficient with a positive sign denotes carbon emission increasing as economic growth is increasing confirming a break-out of the initial decreasing relationship at the peak level of income (real GDP). This aligns with the findings of Wijayanti, et al, (2018) for Indonesia ;Hossain, (2012) for Japan ;Ang, (2008) for Malaysia; Bekhet et al, (2014) for UAE and Saudi Arabia. However, our finding contradict the findings by Sugiawan and Managi, (2016) for Indonesia.…”

Section: Cointegration and Linear Relationshipssupporting

confidence: 90%

Triangular Policy Inference from Renewable Energy, Foreign Direct Investment (FDI) and Urbanization Towards Climate Goal: Insight from Indonesia

Udemba¹,

Philip²

2021

Preprint

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This is an expository study towards ascertaining the ability of Indonesia in mitigating carbon emission. Indonesia is positioned as among the best performing economies in Southeast Asia because of its vigorous fiscal management and sustained economic growth over the years. The country’s foreign investment inflow increased to 14% in 2019, largely in gas, electricity, water, and transportation because of the viability of its macroeconomic reforms. To test the environmental implication of this macroeconomic performance of Indonesia and to see its ability to achieve carbon neutrality, we adopt Indonesian quarterly data of 1990Q1- 2018Q4 for empirical analysis. Relevance Instruments in the economic performance of Indonesia such as urbanization, foreign direct investment (FDI) and renewable energy source are all adopted for accurate estimations and analysis of this topic. Different approaches such as structural break test, autoregressive distributed lag (ARDL)-bounds testing and granger causality are all adopted in this study. Our analysis and policy recommendations are based on short run and long run ARDL dynamics and granger causality. Findings from ARDL confirmed, negative relationship between carbon emission and renewable energy source, FDI and urbanization. Also, a U-shape instead of inverted U-shape EKC is found confirming the impeding implication of Indonesian economic growth to its environmental performance if not checkmate. From granger causality analysis, all the variables are seen transmitting to urbanization in a one-way causal relationship. Also, FDI and renewable energy prove to be essential determinants of the country’s environment development, hence, FDI is seen transmitting to both energy source (fossil fuels and renewables) in a one- way causal relationship. Renewable energy is as well seen having two ways causal relationship with both carbon emission and fossil fuels. This result has equally exposed the significant position of the three instruments (urbanization, FDI and renewable energy source) in Indonesia environment development.

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“…As this is still at an early stage, the relevant authorities must concentrate and focus on the Indonesia's environment to avoid further potentially irreversible environmental degradation. Wijayanti and Sugiyanto (2018) stated from 1995 until 2014, the GDP and environment did not prove the Kuznets hypothesis in Indonesia.…”

Section: Long-and Short-run Estimation Coefficientmentioning

confidence: 96%

The Impact of Tourism Demand, Government Expenditure on Education and Income on the Environment in ASEAN-5 Countries

2019

JEM

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ASEAN countries heavily rely on tourism and therefore are vulnerable towards environmental disruptions. Tourism demand (TD), government expenditure on education (GEE) and income (INC) are among the main factors that increase the total global carbon dioxide emissions which lead to climate change, hence making them the key focus areas in ASEAN-5 countries. This study analysed whether the environmental Kuznets curve (EKC) holds for all ASEAN countries from 1970 until 2014 using nonlinear autoregression distribution lag (NARDL) method. It also analyses whether all variables are asymmetric to the environment in the long-run. In the long-run, the carbon dioxide emission response could have a negative change in INC for Malaysia (MLY), India (IND), Singapore (SNG), and the Philippines (PHL). However, in Thailand (THL), the carbon dioxide emission response could lead to a positive change in INC. This study found an asymmetric long-run effect of the INC, GEE, and TD on the environment in ASEAN-5 countries. In conclusion, EKC does not hold in all cases, but is detected in some of the variables. In this case, legal regulations are needed to avoid environmental degradation due to inefficient economic mechanisms that are insufficient to reduce the total global carbon dioxide emissions.

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Causality Gross Domestic Product (GDP) and Air Pollution. An Overview of Environment Kuznets Curve (EKC) Case: Indonesia

Cited by 4 publications

References 0 publications

Policy insight from renewable energy, foreign direct investment (FDI), and urbanization towards climate goal: insight from Indonesia

Policy insight from renewable energy, foreign direct investment (FDI), and urbanization towards climate goal: insight from Indonesia

Triangular Policy Inference from Renewable Energy, Foreign Direct Investment (FDI) and Urbanization Towards Climate Goal: Insight from Indonesia

The Impact of Tourism Demand, Government Expenditure on Education and Income on the Environment in ASEAN-5 Countries

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