The Impact of Export on the Development of Green Industries for Sustainability in DI Yogyakarta Region, Indonesia: an Extended Input-Output Analysis

Abstract

Post-Covid-19 pandemic, economic activity has been beginning to increase, and there is an increase in exports of goods and services that will drive a region’s economy, especially in the manufacturing industry sectors. However, at the same time, it will cause carbon emissions that should be mitigated as part of Indonesia’s commitment to becoming a net zero emission (2060). This study aims to investigate the direct impacts, indirect impacts, and induced effects caused by an increase in exports on the increase in output, gross value added (GVA), labor absorbed by the manufacturing industry sectors, and predictions of CO2 e emissions that will arise. The analysis method used is an extended input-output model with the main data of the Input-Output Table and the Greenhouse Gas Inventory Data. A case study of the DI Yogyakarta region and the results showed that the projected export of products and services of around IDR 7.905 trillion would create an output of the manufacturing industry sector of around IDR 5.58 trillion, GVA of around IDR 2.20 trillion and absorb a workforce of around 71,119 people. Furthermore, the carbon emissions produced are 38.72 GgCO2 e. The development of green manufacturing industries could be achieved by mitigating the CO2 e emissions produced.