Enhancing Environmental Quality: Investigating the Impact of Hydropower Energy Consumption on CO2 Emissions in Indonesia
DOI:
https://doi.org/10.60084/eje.v2i1.180Keywords:
Global warming, Environmental sustainability, CO2 emissions, Hydropower energy consumption, Economic growth, ARDL, Granger causalityAbstract
Achieving sustainable environmental quality has become a critical global issue, necessitating the reduction of carbon dioxide (CO2) emissions and greenhouse gas (GHG) emissions to mitigate environmental pollution. Hydropower energy has the potential to play a significant role in this effort by providing a clean, renewable energy source that can help reduce reliance on fossil fuels and decrease CO2 emissions. This study examines the dynamic impact of hydropower energy consumption, economic growth, capital, and labor on Indonesia's CO2 emissions from 1990 to 2020. Applying the Autoregressive Distributed Lag (ARDL) method, the findings demonstrate that hydropower energy consumption has a negative effect on CO2 emissions in both the short and long term, indicating that increasing hydropower energy consumption leads to a reduction in CO2 emissions. Conversely, labor exhibits a positive influence on CO2 emissions in both the short and long term, suggesting that a rise in labor contributes to higher levels of CO2 emissions in Indonesia. Furthermore, the Granger causality analysis reveals a bidirectional relationship between CO2 emissions and hydropower energy consumption. The robustness of ARDL results is confirmed through additional tests using Fully-Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regressions (CCR) methods. The findings underscore the importance of promoting sustainable hydropower energy for effective environmental management in Indonesia. Policymakers should prioritize investments in sustainable hydropower infrastructure, encourage the adoption of energy-efficient technologies, and develop a skilled workforce to mitigate the environmental impact of increased labor force participation.
Downloads
References
- Usman, M., Khalid, K., and Mehdi, M. A. (2021). What Determines Environmental Deficit in Asia? Embossing the Role of Renewable and Non-renewable Energy Utilization, Renewable Energy, Vol. 168, 1165–1176. doi:10.1016/j.renene.2021.01.012.
- Wahab, S., Imran, M., Ahmed, B., Rahim, S., and Hassan, T. (2024). Navigating Environmental Concerns: Unveiling the Role of Economic Growth, Trade, Resources and Institutional Quality on Greenhouse Gas Emissions in OECD Countries, Journal of Cleaner Production, Vol. 434, 139851. doi:10.1016/j.jclepro.2023.139851.
- Idroes, G. M., Hardi, I., Hilal, I. S., Utami, R. T., Noviandy, T. R., and Idroes, R. (2024). Economic Growth and Environmental Impact: Assessing the Role of Geothermal Energy in Developing and Developed Countries, Innovation and Green Development, Vol. 3, No. 3, 100144. doi:10.1016/j.igd.2024.100144.
- Wang, J., and Dong, K. (2019). What Drives Environmental Degradation? Evidence from 14 Sub-Saharan African Countries, Science of The Total Environment, Vol. 656, 165–173. doi:10.1016/j.scitotenv.2018.11.354.
- Hardi, I., Idroes, G. M., Zulham, T., Suriani, S., and Saputra, J. (2023). Economic Growth, Agriculture, Capital Formation and Greenhouse Gas Emissions in Indonesia: FMOLS, DOLS and CCR Applications, Ekonomikalia Journal of Economics, Vol. 1, No. 2, 82–91. doi:10.60084/eje.v1i2.109.
- Gemechu, E., and Kumar, A. (2022). A Review of How Life Cycle Assessment Has Been Used to Assess the Environmental Impacts of Hydropower Energy, Renewable and Sustainable Energy Reviews, Vol. 167, 112684. doi:10.1016/j.rser.2022.112684.
- Idroes, G. M., Hardi, I., Rahman, M. H., Afjal, M., Noviandy, T. R., and Idroes, R. (2024). The Dynamic Impact of Non-renewable and Renewable Energy on Carbon Dioxide Emissions and Ecological Footprint in Indonesia, Carbon Research, Vol. 3, No. 1, 35. doi:10.1007/s44246-024-00117-0.
- Leal Filho, W., Tripathi, S. K., Andrade Guerra, J. B. S. O. D., Giné-Garriga, R., Orlovic Lovren, V., and Willats, J. (2019). Using the Sustainable Development Goals towards a Better Understanding of Sustainability Challenges, International Journal of Sustainable Development & World Ecology, Vol. 26, No. 2, 179–190. doi:10.1080/13504509.2018.1505674.
- Henderson, K., and Loreau, M. (2023). A Model of Sustainable Development Goals: Challenges and Opportunities in Promoting Human Well-Being and Environmental Sustainability, Ecological Modelling, Vol. 475, 110164. doi:10.1016/j.ecolmodel.2022.110164.
- Berga, L. (2016). The Role of Hydropower in Climate Change Mitigation and Adaptation: A Review, Engineering, Vol. 2, No. 3, 313–318. doi:10.1016/J.ENG.2016.03.004.
- Ummalla, M., Samal, A., and Goyari, P. (2019). Nexus among the Hydropower Energy Consumption, Economic Growth, and CO2 Emissions: Evidence from BRICS Countries, Environmental Science and Pollution Research, Vol. 26, No. 34, 35010–35022. doi:10.1007/s11356-019-06638-1.
- van Ledden, A., Can, M., and Brusselaers, J. (2024). Toward a Greener Future: Investigating the Environmental Quality of Non-Green Trading in OECD Countries, Ekonomikalia Journal of Economics, Vol. 2, No. 1, 15–28. doi:10.60084/eje.v2i1.149.
- Danmaraya, I. A., and Danlami, A. H. (2022). Impact of Hydropower Consumption, Foreign Direct Investment and Manufacturing Performance on CO2 Emissions in the ASEAN-4 Countries, International Journal of Energy Sector Management, Vol. 16, No. 5, 856–875. doi:10.1108/IJESM-06-2021-0019.
- Hardi, I., Ray, S., Attari, M. U. Q., Ali, N., and Idroes, G. M. (2024). Innovation and Economic Growth in the Top Five Southeast Asian Economies: A Decomposition Analysis, Ekonomikalia Journal of Economics, Vol. 2, No. 1, 1–14. doi:10.60084/eje.v2i1.145.
- Idroes, G. M., Syahnur, S., Majid, S. A., Sasmita, N. R., and Idroes, R. (2021). Provincial Economic Level Analysis in Indonesia Based on the Geothermal Energy Potential and Growth Regional Domestic Products Using Cluster Analysis, IOP Conference Series: Materials Science and Engineering, Vol. 1087, No. 1, 012079. doi:10.1088/1757-899X/1087/1/012079.
- Wang, J., and Azam, W. (2024). Natural Resource Scarcity, Fossil Fuel Energy Consumption, and Total Greenhouse Gas Emissions in Top Emitting Countries, Geoscience Frontiers, Vol. 15, No. 2, 101757. doi:10.1016/j.gsf.2023.101757.
- Sasmita, N. R., Phonna, R. A., Fikri, M. K., Khairul, M., Apriliansyah, F., Idroes, G. M., Puspitasari, A., and Saputra, F. E. (2023). Statistical Assessment of Human Development Index Variations and Their Correlates: A Case Study of Aceh Province, Indonesia, Grimsa Journal of Business and Economics Studies, Vol. 1, No. 1, 12–24. doi:10.61975/gjbes.v1i1.14.
- Hardi, I., Ringga, E. S., Fijay, A. H., Maulana, A. R. R., Hadiyani, R., and Idroes, G. M. (2023). Decomposed Impact of Democracy on Indonesia’s Economic Growth, Ekonomikalia Journal of Economics, Vol. 1, No. 2, 51–60. doi:10.60084/eje.v1i2.80.
- Noviandy, T. R., Idroes, G. M., and Hardi, I. (2024). Enhancing Loan Approval Decision-Making: An Interpretable Machine Learning Approach Using LightGBM for Digital Economy Development, Malaysian Journal of Computing (MJOC), Vol. 9, No. 1, 1734–1745. doi:10.24191/mjoc.v9i1.25691.
- Ope Olabiwonnu, F., Haakon Bakken, T., and Anthony Jnr, B. (2022). The Role of Hydropower in Renewable Energy Sector toward CO2 Emission Reduction during the COVID-19 Pandemic, International Journal of Green Energy, Vol. 19, No. 1, 52–61. doi:10.1080/15435075.2021.1930005.
- Xia, C., and Wang, Z. (2020). The Effect of Fossil Fuel and Hydropower on Carbon Dioxide Emissions: EKC Validation with Structural Breaks, Journal of Environmental Engineering and Landscape Management, Vol. 28, No. 1, 36–47. doi:10.3846/jeelm.2020.11832.
- Bildirici, M. E., and Gökmenoğlu, S. M. (2017). Environmental Pollution, Hydropower Energy Consumption and Economic Growth: Evidence from G7 Countries, Renewable and Sustainable Energy Reviews, Vol. 75, 68–85. doi:10.1016/j.rser.2016.10.052.
- Lu, S., Dai, W., Tang, Y., and Guo, M. (2020). A Review of the Impact of Hydropower Reservoirs on Global Climate Change, Science of The Total Environment, Vol. 711, 134996. doi:10.1016/j.scitotenv.2019.134996.
- Wang, Q., Guo, J., and Li, R. (2023). Better Renewable with Economic Growth without Carbon Growth: A Comparative Study of Impact of Turbine, Photovoltaics, and Hydropower on Economy and Carbon Emission, Journal of Cleaner Production, Vol. 426, 139046. doi:10.1016/j.jclepro.2023.139046.
- Idroes, G. M., Syahnur, S., Majid, M. S. A., Idroes, R., Kusumo, F., and Hardi, I. (2023). Unveiling the Carbon Footprint: Biomass vs. Geothermal Energy in Indonesia, Ekonomikalia Journal of Economics, Vol. 1, No. 1, 10–18. doi:10.60084/eje.v1i1.47.
- Alsaleh, M., and Abdul-Rahim, A. S. (2022). The Pathway toward Pollution Mitigation in EU28 Region: Does Hydropower Growth Make a Difference?, Renewable Energy, Vol. 185, 291–301. doi:10.1016/j.renene.2021.12.045.
- Mohsin, M., Orynbassarov, D., Anser, M. K., and Oskenbayev, Y. (2023). Does Hydropower Energy Help to Reduce CO2 Emissions in European Union Countries? Evidence from Quantile Estimation, Environmental Development, Vol. 45, 100794. doi:10.1016/j.envdev.2022.100794.
- Chowdhury, A. F. M. K., Wild, T., Zhang, Y., Binsted, M., Iyer, G., Kim, S. H., and Lamontagne, J. (2024). Hydropower Expansion in Eco-Sensitive River Basins under Global Energy-Economic Change, Nature Sustainability, Vol. 7, No. 2, 213–222. doi:10.1038/s41893-023-01260-z.
- International Hydropower Association. (2022). Hydropower Status Report: Sector trends and insights, from https://www.hydropower.org/publications/2022-hydropower-status-report.
- Silalahi, D. F., Blakers, A., and Cheng, C. (2023). 100% Renewable Electricity in Indonesia, Energies, Vol. 17, No. 1, 3. doi:10.3390/en17010003.
- Erinofiardi, Gokhale, P., Date, A., Akbarzadeh, A., Bismantolo, P., Suryono, A. F., Mainil, A. K., and Nuramal, A. (2017). A Review on Micro Hydropower in Indonesia, Energy Procedia, Vol. 110, 316–321. doi:10.1016/j.egypro.2017.03.146.
- Maulidar, P., and Syathi, P. B. (2023). Analysis of Public Willingness to Pay (WTP) for Old-Age Security in Banda Aceh, Jurnal Ekonomi Dan Kebijakan Publik Indonesia, Vol. 10, No. 2, 110–124. doi:10.24815/ekapi.v10i2.36762.
- Langer, J., Quist, J., and Blok, K. (2021). Review of Renewable Energy Potentials in Indonesia and Their Contribution to a 100% Renewable Electricity System, Energies, Vol. 14, No. 21, 7033. doi:10.3390/en14217033.
- Kurniawan, V. A., Pradheksa, P. Y., and Saleh, R. (2024). The Failure of Micro-Hydro Technology: A Case Study of the Banyubiru Project in Central Java, Indonesia, Renewable and Sustainable Energy Transition, Vol. 5, 100081. doi:10.1016/j.rset.2024.100081.
- IEA. (2023). Energy Statistics Data Browser, from https://www.iea.org/data-and-statistics/data-tools/energy-statistics-data-browser.
- Maghfirra, D., Cohon, J. L., Jaramillo, P., and Morgan, M. G. (2022). Optimizing an Equitable Micro-Hydropower Deployment: Application of a Multi-Objective Method for Rural Indonesia, Journal of Multi-Criteria Decision Analysis, Vol. 29, Nos. 3–4, 218–229. doi:10.1002/mcda.1769.
- Pandyaswargo, A. H., Wibowo, A. D., and Onoda, H. (2022). Socio-Techno-Economic Assessment to Design an Appropriate Renewable Energy System for Remote Agricultural Communities in Developing Countries, Sustainable Production and Consumption, Vol. 31, 492–511. doi:10.1016/j.spc.2022.03.009.
- Blum, N. U., Sryantoro Wakeling, R., and Schmidt, T. S. (2013). Rural Electrification through Village Grids—Assessing the Cost Competitiveness of Isolated Renewable Energy Technologies in Indonesia, Renewable and Sustainable Energy Reviews, Vol. 22, 482–496. doi:10.1016/j.rser.2013.01.049.
- Rospriandana, N., Burke, P. J., Suryani, A., Mubarok, M. H., and Pangestu, M. A. (2023). Over a Century of Small Hydropower Projects in Indonesia: A Historical Review, Energy, Sustainability and Society, Vol. 13, No. 1, 30. doi:10.1186/s13705-023-00408-1.
- Didik, H., Bambang, P. N., Asep, S., and Purwanto, Y. A. (2018). Sustainability Challenge of Micro Hydro Power Development in Indonesia, IOP Conference Series: Earth and Environmental Science, Vol. 147, 012031. doi:10.1088/1755-1315/147/1/012031.
- WDI. (2023). WorldBank Development Indicator Databased, from https://databank.worldbank.org/source/world-development-indicators.
- Sinaga, O., Alaeddin, O., and Jabarullah, N. H. (2019). The Impact of Hydropower Energy on the Environmental Kuznets Curve in Malaysia, International Journal of Energy Economics and Policy, Vol. 9, No. 1, 308–315. doi:10.32479/ijeep.7328.
- Bello, M. O., Solarin, S. A., and Yen, Y. Y. (2018). The Impact of Electricity Consumption on CO2 Emission, Carbon Footprint, Water Footprint and Ecological Footprint: The Role of Hydropower in an Emerging Economy, Journal of Environmental Management, Vol. 219, 218–230. doi:10.1016/j.jenvman.2018.04.101.
- Solarin, S. A., Bello, M. O., and Bekun, F. V. (2021). Sustainable Electricity Generation: The Possibility of Substituting Fossil Fuels for Hydropower and Solar Energy in Italy, International Journal of Sustainable Development & World Ecology, Vol. 28, No. 5, 429–439. doi:10.1080/13504509.2020.1860152.
- Pata, U. K. (2018). Renewable Energy Consumption, Urbanization, Financial Development, Income and CO2 Emissions in Turkey: Testing EKC Hypothesis with Structural Breaks, Journal of Cleaner Production, Vol. 187, 770–779. doi:10.1016/j.jclepro.2018.03.236.
- Zou, G. L. (2012). The Long-Term Relationships among China’s Energy Consumption Sources and Adjustments to Its Renewable Energy Policy, Energy Policy, Vol. 47, 456–467. doi:10.1016/j.enpol.2012.05.022.
- Ridzuan, A. R., Albani, A., Latiff, A. R. A., Razak, M. I. M., and Murshidi, M. H. (2020). The Impact of Energy Consumption Based on Fossil Fuel and Hydroelectricity Generation towards Pollution in Malaysia, Indonesia and Thailand, International Journal of Energy Economics and Policy, Vol. 10, No. 1, 215–227. doi:10.32479/ijeep.8140.
- Idroes, G. M., Hardi, I., Noviandy, T. R., Sasmita, N. R., Hilal, I. S., Kusumo, F., and Idroes, R. (2023). A Deep Dive into Indonesia’s CO2 Emissions: The Role of Energy Consumption, Economic Growth and Natural Disasters, Ekonomikalia Journal of Economics, Vol. 1, No. 2, 69–81. doi:10.60084/eje.v1i2.115.
- Brock, W. A., and Taylor, M. S. (2010). The Green Solow Model, Journal of Economic Growth, Vol. 15, No. 2, 127–153. doi:10.1007/s10887-010-9051-0.
- Solow, R. M. (1956). A Contribution to the Theory of Economic Growth, The Quarterly Journal of Economics, Vol. 70, No. 1, 65. doi:10.2307/1884513.
- Cobb, C. W., and Douglas, P. H. (1928). A Theory of Production, The American Economic Review, Vol. 18, No. 1, 139–165.
- Pata, U. K., Dam, M. M., and Kaya, F. (2022). How Effective Are Renewable Energy, Tourism, Trade Openness, and Foreign Direct Investment on CO2 Emissions? An EKC Analysis for ASEAN Countries, Environmental Science and Pollution Research, Vol. 30, No. 6, 14821–14837. doi:10.1007/s11356-022-23160-z.
- Wei, Z., and Lihua, H. (2022). Effects of Tourism and Eco-Innovation on Environmental Quality in Selected ASEAN Countries, Environmental Science and Pollution Research, Vol. 30, No. 15, 42889–42903. doi:10.1007/s11356-021-17541-z.
- Maulidar, P., Fitriyani, F., Sasmita, N. R., Hardi, I., and Idroes, G. M. (2024). Exploring Indonesia’s CO2 Emissions: The Impact of Agriculture, Economic Growth, Capital and Labor, Grimsa Journal of Business and Economics Studies, Vol. 1, No. 1, 43–55. doi:10.61975/gjbes.v1i1.22.
- Adebayo, T. S., Akinsola, G. D., Kirikkaleli, D., Bekun, F. V., Umarbeyli, S., and Osemeahon, O. S. (2021). Economic Performance of Indonesia amidst CO2 Emissions and Agriculture: A Time Series Analysis, Environmental Science and Pollution Research, Vol. 28, No. 35, 47942–47956. doi:10.1007/s11356-021-13992-6.
- Dickey, D. A., and Fuller, W. A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root, Econometrica, Vol. 49, No. 4, 1057. doi:10.2307/1912517.
- Phillips, P. C. B., and Perron, P. (1988). Testing for a Unit Root in Time Series Regression, Biometrika, Vol. 75, No. 2, 335. doi:10.2307/2336182.
- Phillips, P. C. B., and Hansen, B. E. (1990). Statistical Inference in Instrumental Variables Regression with I(1) Processes, The Review of Economic Studies, Vol. 57, No. 1, 99. doi:10.2307/2297545.
- Stock, J. H., and Watson, M. W. (1993). A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems, Econometrica, Vol. 61, No. 4, 783. doi:10.2307/2951763.
- Park, J. Y. (1992). Canonical Cointegrating Regressions, Econometrica, Vol. 60, No. 1, 119. doi:10.2307/2951679.
- Idroes, G. M., Hardi, I., Nasir, M., Gunawan, E., Maulidar, P., and Maulana, A. R. R. (2023). Natural Disasters and Economic Growth in Indonesia, Ekonomikalia Journal of Economics, Vol. 1, No. 1, 33–39. doi:10.60084/eje.v1i1.55.
- Granger, C. W. J. (1969). Investigating Causal Relations by Econometric Models and Cross-spectral Methods, Econometrica, Vol. 37, No. 3, 424. doi:10.2307/1912791.
- Wolde-Rufael, Y., and Weldemeskel, E. M. (2020). Environmental Policy Stringency, Renewable Energy Consumption and CO2 Emissions: Panel Cointegration Analysis for BRIICTS Countries, International Journal of Green Energy, Vol. 17, No. 10, 568–582. doi:10.1080/15435075.2020.1779073.
- Bilgili, F., Lorente, D. B., Kuşkaya, S., Ünlü, F., Gençoğlu, P., and Rosha, P. (2021). The Role of Hydropower Energy in the Level of CO2 Emissions: An Application of Continuous Wavelet Transform, Renewable Energy, Vol. 178, 283–294. doi:10.1016/j.renene.2021.06.015.
- Khanna, M. (2021). COVID-19: A Cloud with a Silver Lining for Renewable Energy?, Applied Economic Perspectives and Policy, Vol. 43, No. 1, 73–85. doi:10.1002/aepp.13102.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Putri Maulidar, Sintia Fadila, Iffah Hafizah, Naswatun Zikra, Ghalieb Mutig Idroes
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.