Environmental Management Technologies, Environmental Policy Stringency, Energy Productivity and Pollution Emission: Fresh Evidence from Indonesia under STIRPAT Framework

Abstract

The rapid pace of climate change and global warming has become an ever growing challenge all over the world. Global warming and carbon concentrations can be mitigated by adopting strict environmental policies and effective management of the environment. Therefore, the study aims to empirically investigate the effect of environmental policy stringency (EPS), energy productivity and environmental management technologies (EMT) on pollution emission in Indonesia- one of the most polluting countries of the world. To this end, the study collects data over the 1990 to 2020 period. The study uses Autoregressive Distributed Lag Model (ARDL) approach to carry out empirical estimation. The findings reveal that environmental management technologies, energy productivity and environmental policy stringency had negative impact on CO2 emission. However, economic growth (GDP) and urbanization had positive role in increasing CO2 emission in the long run and the short run. On the basis of the outcomes, the study recommends that Indonesia should adopt strict environmental policies and legislations to mitigate environmental deterioration. Indonesian government is recommended to promote the adoption of environmental management technologies by providing substantial incentives and investment opportunities for businesses.