Import Tariffs to Reduce the Use and Consumption of Fossil Energy in Indonesia

English

Abstract

This Research aims to simulate the application of import tariffs on reducing the use of fossil energy and the impact of using alternative energy on minimizing the use of fossil fuels in Indonesia. This research method applies VECM (Vector Error Correction Model) model to analyze the effect vectors on Energy Use, usage of energy from fossil fuels, and Import Costs with the research period from 1999 to 2020. The data used in this analysis is time series. This secondary data was used in the study. secondary data from the World Bank. We found that import tariffs have a significant effect on reducing using fossil fuels in Indonesia. Where the application of environmental taxes can be effective in limiting the use of fossil energy and increasing environmental sustainability. This is related to a sustainable economy. The utilizing energy itself has no significant effect on the use of fossil energy and import tariffs. This shows that the use of alternatives has not significantly reduced the use of fossil fuels in Indonesia.