Jurnal Ekonomi Pembangunan
Vol. 23 No. 1 (2025): Jurnal Ekonomi Pembangunan

The Relationship between Poverty and Environmental Damage in Indonesia: A VECM Analysis

Wahyudi, Setyo Tri (Unknown)
Badriyah, Nurul (Unknown)
Nabella, Rihana Sofie (Unknown)
Sari, Kartika (Unknown)
Rahmawati, Amalia (Unknown)



Article Info

Publish Date
30 Jun 2025

Abstract

This study investigates the relationship between poverty and environmental damage in Indonesia. This study consists time series data covering the period from 2000 to 2023, and utilized the vector error correction model. The short-run findings reveal that economic inequality exacerbates CO2 emissions, as affluent groups exploit resources and disadvantaged community resort to unsustainable practices. This is compounded by political and economic power weakening environmental regulations. Conversely, CO2 emissions exacerbate poverty, especially in rural areas reliant on natural resources, making them vulnerable to environmental shocks. A strong positive correlation exists between ecological footprint per capita and CO2 emissions, driven by resource consumption and fossil fuel reliance, though renewable energy adoption shows promise in mitigating emissions. In the long run, our findings align with the Environmental Kuznets Curve theory, suggesting that economic growth, supported by clean energy and sound environmental policies, ultimately leads to reduced environmental impact. These findings underscore the critical need for balanced strategies that simultaneously address poverty alleviation and promote ecological sustainability through inclusive policies and a transition to renewable energy.

Copyrights © 2025






Journal Info

Abbrev

jep

Publisher

Subject

Economics, Econometrics & Finance

Description

Jurnal Ekonomi Pembangunan is a peer-reviewed journal that provides a forum for scientific works pertaining to Development Economics. Published twice in a year (June and December). This Journal has p-ISSN 1829-5843, and e-ISSN 2685-0788. This journal was first published since June 2003 by the ...