The Impact of Health Spending on CO2 Emissions and Economic Growth in Indonesia: A VECM Analysis



  • Siti Yasikah STIE Jaya Negara Tamansiswa Malang
  • Sri Harnani STIE Jaya Negara Tamansiswa Malang
  • Cahya Budhi Irawan STIE Jaya Negara Tamansiswa Malang


Current Health Expenditure, Carbon Emissions, and GDP


The study's overarching objective is to examine the impact of healthcare expenditures on
carbon emissions as a means of bolstering Indonesia's economy. The World Bank was
consulted for its database covering the years 2000-2019 in Indonesia. Current health
expenditure, carbon emissions, and gross domestic product are the variables that will be
put through the VECM test. Previous Health spending was associated with lower levels
of carbon emissions. The opposite is true for carbon emissions, which rise as GDP rises.
The health budget in Indonesia is positively correlated with the country's GDP.
Policymakers in Indonesia can have a favourable effect on the country's economic growth
by prioritising the increased allocation of expenditure on quality health care. In addition,
the correlation between current healthcare expenditures and CO2 emissions only goes in
one direction. The reason for this is that although emissions have no influence on health
care costs, the opposite is true.