Green Finance and Green Economic Trade Off Economic and Environtment in Indonesia

Abstract

This study investigates the trade-off between economic growth and environmental sustainability. We use the variables CO2 emission, GDP, Investment, and Education. The World Bank contributed the data for this research. A multivariate regression model was used to investigate the causal association between variables CO2 emission, GDP, Investment, and Education in Indonesia. We found that CO2 emission has a negative causal relationship with economic growth where the higher CO2 emission will further suppress the country's productivity as indicated by GDP. Green investment has not been strong enough to encourage economic growth in Indonesia. Likewise, environmental education still needs to be developed to increase public awareness of the importance of environmental sustainability. In Indonesia, the economy and environmental sustainability have become a trade-off that requires practical solutions in the form of awareness of the importance of environmental sustainability and green investment based on environmental sustainability.