Grimsa Journal of Business and Economics Studies
Vol. 1 No. 1 (2024): January 2024

Exploring Indonesia's CO2 Emissions: The Impact of Agriculture, Economic Growth, Capital and Labor

Putri Maulidar (Department of Development Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh 23111, Indonesia)
Fitriyani Fitriyani (Department of Development Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh 23111, Indonesia)
Novi Reandy Sasmita (Department of Statistics, Faculty of Mathematics and Natural Sciences, Universitas Syiah Kuala, Banda Aceh 23111, Indonesia)
Irsan Hardi (Economics and Sustainable Development Unit, Konstanta Utama, Aceh Besar 23371, Indonesia)
Ghalieb Mutig Idroes (Economics and Sustainable Development Unit, Konstanta Utama, Aceh Besar 23371, Indonesia)



Article Info

Publish Date
11 Jan 2024

Abstract

This study examines the dynamic impact of agriculture, economic growth, capital, and labor on carbon dioxide (CO2) emissions in Indonesia from 1990-2022. Employing the Autoregressive Distributed Lag (ARDL) method, the findings indicate that agriculture plays a substantial role in decreasing CO2 emissions in the short and long run. Additionally, a consistent positive correlation exists between economic growth and CO2 emissions, underscoring the difficulty in decoupling economic progress from its environmental repercussions. Capital formation, on the other hand, exerts a noteworthy negative influence on CO2 emissions, particularly in the long run, implying that increased investment in capital formation, potentially in environmentally friendly technologies, could contribute to a gradual reduction in emissions. However, the expanding labor is identified as a significant driver of CO2 emissions, particularly in the long run. Highlighting the challenges associated with mitigating the environmental impact of workforce growth. Furthermore, the Granger causality results indicate unidirectional causality from CO2 emissions and labor to agriculture, from agriculture to economic growth and capital formation, and from economic growth to capital formation. Therefore, promoting sustainable agriculture, aligning economic growth with green technologies, incentivizing eco-friendly investment, integrating comprehensive planning, and maintaining flexible policies are crucial for Indonesia's effective environmental and economic management.

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Journal Info

Abbrev

gjbes

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance Energy Environmental Science Social Sciences

Description

Grimsa Journal of Business and Economics Studies aims to provide a platform for researchers, scholars, and professionals to share their innovative ideas, findings, and insights in the following areas: Economic Theory and Analysis, Business Management and Strategy, Finance and Investment, Marketing ...