Carbon Emissions, Energy Consumptions, and Production Activity: Now and Future

摘要

Most of the countries in the world, including Indonesia, have agreed to take action of keeping global warming below 2° Celsius in this century, as ratified in the Paris Agreement. Indonesia is committed to reduce their greenhouse gasses (GHG) emissions by 29% in 2030 without any international support. This study aims to analyze the nexus between carbon emission, energy consumption, and economic productivity; and moreover, identifies which factor in Kaya identity that affects more to the carbon emission. By employing energy and emission data from International Energy Agency (IEA), and macroeconomic data of 34 Provinces from Central Bureau of Statistics (BPS), three dynamic models confirm that there is causality between those three variables. Decomposition results of Kaya identity showed that during 1993-2014, there was an increasing trend of carbon emissions mostly affected by carbon efficiency (ratio of CO_2 emitted per energy consumption) and economic productivity. On the other hand, energy intensity of economy showed a promising decline trend over this period, indicating that less energy was needed to get a rupiah of GDP. Assuming the growth rate of GDP per capita is steady at 3% per year, Indonesia needs to further reduce its carbon content of energy at 4.5% per year and energy intensity at 2% per year, so that the INDC target in 2030 can successfully be achieved.