The Effect of Energy Subsidy on the Environmental Quality in Indonesia

Hadi Sasana, Achma Hendra Setiawan, Fitri Ariyanti and Imam Ghozali
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Hadi Sasana: Faculty of Economics and Business, Diponegoro University, Indonesia,
Achma Hendra Setiawan: Faculty of Economics and Business, Diponegoro University, Indonesia
Fitri Ariyanti: Faculty of Economics and Business, Diponegoro University, Indonesia,
Imam Ghozali: Faculty of Economics and Business, Diponegoro University, Indonesia

International Journal of Energy Economics and Policy, 2017, vol. 7, issue 5, 245-249

Abstract: Energy subsidy has boosted energy consumption and energy consumption has triggered high emissions of carbon dioxide (CO2), which might reduce environmental quality. This problem occurs around the world, especially in the developing countries undergoing a period of industrialization, such as Indonesia. The aim of this study was to analyze the effect of energy subsidy, energy consumption, and population growth on CO2 emissions in Indonesia. The method used was multiple linear regression analysis with ordinary least square approach using time series data within the period of 1990-2014. The results showed that energy subsidy, fossil energy consumption, and population growth have a positive and significant impact on CO2 emissions in Indonesia. Meanwhile, the consumption of renewable energy has a negative effect on the emissions of CO2 emissions produced.

Keywords: carbon dioxide emissions; fossil energy consumption; energy subsidy; renewable energy consumption (search for similar items in EconPapers)
JEL-codes: Q42 Q43 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2017-05-27

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