Research Article
Socio-economic and Environmental Degradation: The Causal Relationship Analysis to Achieve SDGs in Indonesia
@INPROCEEDINGS{10.4108/eai.5-10-2022.2328786, author={L R E Malau and K R Rambe and M Damanik and A A T Suli and K Amru}, title={Socio-economic and Environmental Degradation: The Causal Relationship Analysis to Achieve SDGs in Indonesia}, proceedings={Proceedings of the 3rd Sriwijaya International Conference on Environmental Issues, SRICOENV 2022, October 5th, 2022, Palembang, South Sumatera, Indonesia}, publisher={EAI}, proceedings_a={SRICOENV}, year={2023}, month={4}, keywords={development policies economic growth environment sustainable development}, doi={10.4108/eai.5-10-2022.2328786} }- L R E Malau
K R Rambe
M Damanik
A A T Suli
K Amru
Year: 2023
Socio-economic and Environmental Degradation: The Causal Relationship Analysis to Achieve SDGs in Indonesia
SRICOENV
EAI
DOI: 10.4108/eai.5-10-2022.2328786
Abstract
Sustainable development is becoming a new development direction for countries in the world because of the agreement of the Sustainable Development Goals (SDGs). Therefore, development policies in Indonesia must consider the linkages between economic growth and the environment. This study aims to analyze the causal relationship between economic growth, CO2 emissions, urbanization, energy consumption, and trade openness in Indonesia. Annual data for the period 1980-2019 were analyzed using Granger causality test and Vector Error Correction Model to answer the research objectives. The Granger causality test shows energy consumption is related in one direction to CO2 emissions, and also urbanization to CO2 emissions, energy consumption, and trade openness. In the short term, there is no significant variable that affects the level of CO2 emissions, but in the long term, energy consumption, economic growth, trade openness, and urbanization have an impact on CO2 emissions in Indonesia. Shocks of economic growth, energy consumption, trade openness, and urbanization have an impact on the increase of CO2 emissions. Moreover, the contribution of the variables of energy consumption, economic growth, trade openness, and urbanization to CO2 emissions tends to increase.