The detrimental effects of dirty energy, foreign investment, and corruption on environmental quality: New evidence from Indonesia

Abstract

The alarming trend of CO2 emissions in Indonesia merits a reinvestigation into the determinants in a bid to conserve the environment. In the literature, in Indonesia, three potential determinants, namely, energy, foreign direct investment, and corruption, have been identified to harm the environment. However, their effects are still undetermined. Thus, this study aims to examine the relationships between corruption (COR), energy use (ENY), foreign direct investment (FDI), and CO2 emissions in Indonesia. The autoregressive distributed lag (ARDL) approach was used to analyse data for 36 years, from 1984 to 2020. The results reveal that corruption contributes to greater environmental degradation in the short run, while foreign direct investment does not. However, in the long run, corruption and energy use can positively affect environmental degradation, but foreign direct investment can reduce environmental degradation in Indonesia. This study also found two other factors, namely, economic growth and urbanisation, which can affect the environment with mixed findings. These findings are indispensable for policy formulation in Indonesia as Indonesia is a rapidly developing country that depends on good environmental quality to ensure future growth and sustainable development.

Pengaruh Keterbukaan Dan Pertumbuhan Ekonomi Terhadap Kualitas Lingkungan Studi Negara G20

“…Hal ini dikarenakan perusahaan multinasional biasanya membawa teknologi-teknologi canggih yang ramah lingkungan dan teknologi bersih sehingga tidak akan berdampak pada kerusakan lingkungan (Kim, 2019). Pada penelitian Pujiati et al (2023) didapatkan hasil bahwasanya peningkatan FDI dapat mengurangi tingkat emisi karbon bagi suatu negara. Hal ini disebabkan semakin tinggi tingkat FDI yang berfokus pada teknologi hijau dan bersih dapat membantu mengurangi emisi karbon yang dihasilkan oleh sektor industri (Pujiati et al, 2023) Pengaruh Free Trade (TRADE) Terhadap Kualitas Lingkungan (CO2)…”

“…Pada penelitian Pujiati et al (2023) didapatkan hasil bahwasanya peningkatan FDI dapat mengurangi tingkat emisi karbon bagi suatu negara. Hal ini disebabkan semakin tinggi tingkat FDI yang berfokus pada teknologi hijau dan bersih dapat membantu mengurangi emisi karbon yang dihasilkan oleh sektor industri (Pujiati et al, 2023) Pengaruh Free Trade (TRADE) Terhadap Kualitas Lingkungan (CO2)…”

The Role of Digitalization on Sustainable Development: An Empirical Study of Indonesia

“…Temuan ini sejalan dengan hasil studi Lestari et al (2022) yang menyatakan bahwa pada kelompok negara ASEAN dengan pendapatan menangah kebawah, termasuk Indonesia, PMA justru meningkatkan ketimpangan pendapatan. Hal ini diperkuat dengan temuan Pujiati et al (2023) yang menyatakan bahwa PMA membuat emisi GRK di Indonesia meningkat hingga level yang semakin membahayakan. Regulasi yang longgar dan rumit, serta lemahnya monitoring terkait penggunaan energi dan perlindungan lingkungan di Indonesia membuat dampak tersebut tidak dapat dihindari (Dutu, 2016).…”

Comprehensive Outlook on Macroeconomic Determinants for Renewable Energy in Malaysia

“…Thus, promoting renewable energy is expected to tackle carbon emissions and environmental pollution. Meanwhile, other big steps have already been taken, i.e., to use more efficient non-renewable energy [15,16]. Examples are more efficient internal combustion engines, lower-friction tires, and higher-quality fuel to produce lower emissions.…”