How Inflation and Carbon Emissions Influence Renewable Energy in Indonesia: Evidence from VECM



  • Nugroho Guntur S STIE Jaya Negara Tamansiswa Malang
  • Bambang Hadi Prabowo STIE Jaya Negara Tamansiswa Malang
  • Refina Sawitri STIE Jaya Negara Tamansiswa Malang


Inflasi, CO2 Emissions, and Renewable Energy


The purpose of this investigation was to examine how rising prices and carbon emissions
affect the spread of renewable energy sources in Indonesia. The range of 1997-2020 was
derived using data collected from the World Bank. Inflation, carbon emissions, and
renewable energy sources are the independent variables put through the VECM's paces.
Based on the findings of this research, it can be concluded that higher rates of inflation
in the past have contributed to a rise in Indonesia's carbon emissions. But a positive
connection and link between REN and INF exists, and it's a fascinating one to consider.
Carbon emissions and renewable energy, on the other hand, cancel each other out. When
emissions of carbon dioxide rise, renewable energy sources suffer, and vice versa. There
needs to be a greater push from policymakers to rein in inflation. Carbon emissions can
be mitigated by the implementation of renewable energy sources.