Industrial development and greenhouse gas emissions in Indonesia

Abstract

The manufacturing industry is the main source of Indonesia's economic growth. Its contribution to national GDP (gross domestic product) in 2012 is 22%, and it is expected to reach 30% in 2035. On the other hand, the industrial sector consumes energy which produces greenhouse gases. In 2017, the final energy consumption of the industrial sector was 232 million BOE (barrels of oil equivalent), slightly below the transportation sector, which was 362 million BOE. This study analyses the relationship between economic growth in the industrial sector and greenhouse gas emissions. Data for the period 2002-2018, with a cross section of 8 manufacturing industry subsectors, was analysed using regression models. The results of the analysis show that economic growth is positively related to greenhouse gas emissions, namely in the chemical fertilizer and rubber goods industries; cement and non-metal minerals industries; as well as raw metals iron and steel industries.