Promoting Economic Growth and Environmental Sustainability through Energy Efficiency: Evidence from Indonesia

Rita Helbra Tenrini, Sofia Arie Damayanty, Dhani Setyawan, Hadi Setiawan and Rakhmindyarto Rakhmindyarto
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Rita Helbra Tenrini: Fiscal Policy Agency of Ministry of Finance, Indonesia
Sofia Arie Damayanty: Fiscal Policy Agency of Ministry of Finance, Indonesia
Hadi Setiawan: Fiscal Policy Agency of Ministry of Finance, Indonesia
Rakhmindyarto Rakhmindyarto: Fiscal Policy Agency of Ministry of Finance, Indonesia

International Journal of Energy Economics and Policy, 2021, vol. 11, issue 5, 314-320

Abstract: Indonesia has set a unilateral greenhouse gas emissions (GHG) reduction target by 29% and conditional targets with international support of up to 41%, compared to the business as usual by 2030. This paper aims to formulate energy conservation policies to increase productivity and promote economic growth in Indonesia. Indonesia's energy conservation policy has multiple aspects: supporting energy security, commitment to GHG emission reduction, state budget efficiency, and improving productivity and competitiveness. Using Social Accounting Matrix (SAM), this study found evidence that energy efficiency saving will positively affect ecological sustainability and economic agents in the five targeted sectors: energy, waste, industrial processes, and production use, agriculture, and forestry. Furthermore, the Corporate Social Responsibility (CSR) policy provides positive effects in increasing economic growth and reducing income disparities.

Keywords: Energy Conservation; Energy Efficiency; Economic Growth; Environmental Sustainability. (search for similar items in EconPapers)
JEL-codes: O40 Q40 Q56 (search for similar items in EconPapers)
Date: 2021
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