Decoding carbon neutrality targets: insights from Indonesia's economic and energy perspective

Abstract

To achieve carbon neutrality, it is essential for Indonesia to promote the integrated development of its energy, environmental, and economic systems (3E). This research examines the potential integration of economic growth, energy intensity, and renewable energy consumption into efforts to reach carbon neutrality in Indonesia. Utilizing data from 1990 to 2020, the study investigates the impact of these factors on CO2 emissions through multiple linear regression analysis. The findings indicate that economic growth, energy intensity, and renewable energy consumption are pivotal in pursuing carbon neutrality. While economic growth slightly contributes to CO2 emissions, the effect is not statistically significant, although the ecological Kuznets curve is observed. On the other hand, increased energy intensity significantly raises CO2 emissions, presenting a challenge to meeting carbon neutrality goals. Conversely, greater use of renewable energy has a notable effect in reducing CO2 emissions and supporting carbon neutrality efforts. Key policy recommendations include advancing a green and digital-based economy, expanding clean energy utilization, and adopting sustainable green technologies.