Determinants of Carbon Emission and Rebound Effect in Asean Countries: Kaya and LMDI Decomposition

Abstract

Increased energy efficiency led to increased economic growth, the energy used in the economy, and overall production. Unfortunately, the rebound effect and carbon emissions were adverse effects on the final result of energy efficiency. Indonesia relied on new energy efficiency technologies to reduce its energy intensity while avoiding the rebound effect. Hence, the other strategy to stimulate increased energy efficiency in the economic sector was an essential part of government policy overcoming resource constraints. This paper used the logarithmic-mean Divisia index decomposition and KAYA identity to recognize the determinant factors of carbon emissions and rebound effect changes in Indonesia. According to the research findings, substantial energy rebounds in Indonesia have revealed that energy efficiency gains in Indonesia may be related to the rebound effect. Indonesia sought to go in this direction, with the national energy policy aiming to lower energy efficiency by 1% each year to stimulate energy savings in all sectors. This paper advocated enhancing energy efficiency, notably in the building sector's plan to encourage energy efficiency measures.