Coal consumption, urbanization, and trade openness linkage in Indonesia

Robi Kurniawan and Shunsuke Managi

Energy Policy, 2018, vol. 121, issue C, 576-583

Abstract: This paper explores the effects of economic growth, urbanization, industry, and trade openness on coal consumption in Indonesia over the period 1970–2015. To closely adhere to the Environmental Kuznets curve narratives, we consider coal consumption which has been scarcely explored in the EKC debate, as a proxy of environmental pressure. We estimate the autoregressive distributed lag (ARDL) method and confirm that the variables are cointegrated for long run linkage with the presence of structural breaks. The empirical evidence showed that economic growth, urbanization and trade openness increase coal consumption while decreasing share of secondary industry reduce it. We also verify the existence of environmental Kuznets curve. Having a vital role in the energy mix, Indonesia needs to restrain excessive coal consumption to enhance environmental quality. Our results also imply urbanization and trade openness are crucial factors on coal consumption. Consequently, it should be taken into consideration in energy policy-making process, such as energy conservation policies in the residential sector and prioritize foreign investment which brings cutting-edge coal technologies.

Keywords: Environmental Kuznets curve; Coal consumption; Cointegration; Urbanization; Trade openness; Indonesia (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421518304695
Full text for ScienceDirect subscribers only

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:eee:enepol:v:121:y:2018:i:c:p:576-583

DOI: 10.1016/j.enpol.2018.07.023

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().