Sustainable Future of International Trade and Environmental Governance in ASEAN: Indonesia's Economic Growth and Green Commitments

Indraswati Tri Abdi Reviane (), Abdul Hamid Paddu (), Fitriwati Djam'an (), Aditya Idris () and Wasiaturrahma Wasiaturrahma ()
Additional contact information
Indraswati Tri Abdi Reviane: Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia.
Abdul Hamid Paddu: Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia.
Fitriwati Djam'an: Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia.
Aditya Idris: Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia.
Wasiaturrahma Wasiaturrahma: Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia.

International Journal of Energy Economics and Policy, 2026, vol. 16, issue 2, 363-373

Abstract: This study investigates the determinants of sustainable development in Indonesia, with a specific focus on reconciling economic growth and international trade with environmental governance and green commitments. The research aims to empirically test the Environmental Kuznets Curve (EKC) hypothesis and evaluate the distinct roles of governance quality and renewable energy. Utilizing data from 1990-2022, the methodology employs second-generation econometric techniques robust to cross-sectional dependence, including the Cross-sectionally Augmented ARDL (CS-ARDL) model to estimate long-run and short-run dynamics. The findings confirm the EKC hypothesis for Indonesia, revealing an inverted U-shaped relationship between income and CO? emissions. More significantly, the results establish that robust government governance and the adoption of renewable energy are critical, statistically significant drivers in mitigating environmental degradation, with the economy showing a rapid adjustment speed to long-run equilibrium. The study's implications stress the necessity for integrated policies that strengthen institutions and accelerate the energy transition. Its novelty lies in its dual-focused analysis and robust methodology, offering a nuanced and actionable framework for sustainable growth in ASEAN's largest economy, demonstrating that effective governance is a fundamental enforcer of green commitments.

Keywords: Sustainable Development; Trade; Environmental Kuznets Curve; Renewable Energy; Indonesia; ASEAN Countries (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://econjournals.com/index.php/ijeep/article/download/22496/9776 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:16:y:2026:i:2:id:22496

Ordering information: This journal article can be ordered from
https://econjournals.com/index.php/ijeep

DOI: 10.32479/ijeep.22496

Access Statistics for this article

More articles in International Journal of Energy Economics and Policy from International Journal of Energy Economics and Policy
Bibliographic data for series maintained by Monica Sinhat ().