Policy insight from renewable energy, foreign direct investment (FDI), and urbanization towards climate goal: insight from Indonesia

Asymmetric effects of foreign direct investment and globalization on ecological footprint in Indonesia

The sustainable development goal seems challenging for governments worldwide, including Indonesia, which has faced an ecological deficit due to rapid economic development and population growth since 1999. The study aims to probe the potential asymmetric effects of foreign direct investment and globalization on ecological footprint in Indonesia from 1971 to 2019, which was ignored by previous studies. By adopting the autoregressive distributed lags (ARDL) and nonlinear autoregressive distributed lags (NARDL) approaches, the results clearly reveal that (i) The positive shock of globalization has a positive and statistically significant impact on the ecological footprint; (ii) the impact of foreign direct investment on the ecological footprint is asymmetric in the long run. Accordingly, the study found that the influence of negative changes in foreign direct investment is larger than positive changes. Based on the findings, the study recommends that the Indonesian government carefully consider the long-term consequences of globalization on the environment and reasonable control of foreign direct investment inflows.

Unraveling the interplay between globalization, financial development, economic growth, greenhouse gases, human capital, and renewable energy uptake in Indonesia: multiple econometric approaches

Addressing global environmental concerns requires the widespread adoption of renewable energy sources. More research is needed to examine the relationships between renewable energy (RE) and globalization, economic growth, and environmental quality in Indonesia. Therefore, we examined how renewable energy usage in Indonesia has changed due to the dynamic effects of globalization, financial development, and environmental quality. Time-series data were analyzed using an autoregressive distributed lag (ARDL) model to test for cointegration and long-run/short-run dynamics between 1990 and 2020. In addition to ARDL bounds testing, we used the Johansen and Engle-Granger cointegration methods for confirmation. Globalization, financial progress, human capital, greenhouse gas emissions, and economic expansion have favorable long- and short-term effects on renewable energy sources. Globalization has enabled Indonesia to expand trade, FDI, and financial investment. It has also increased energy-efficient technology use due to environmental policies. The computed results are robust enough to substitute estimators, such as dynamic ordinary least squares (DOLS), fully modified least squares (FMOLS), and canonical cointegrating regression (CCR). We recommend the implementation of policies that support financial and environmental development by utilizing renewable resources and increasing investments in renewable energy ventures.

Renewable energy policy and deployment of renewable energy technologies: The role of resource curse

Due to the increasing emission of greenhouse gases and global warming, the development of renewable energy has become very important. The availability of fossil fuels and the low cost of their extraction compared to renewable energy projects reduce the motivation of countries, especially countries that have abundant natural resources, to develop this technology. Renewable energy deployment has become crucial in response to rising greenhouse gas emissions and global warming. Policies supporting renewable energy play a significant role in this. This study examines the effect of such policies on the deployment of renewable energy technologies, considering the role of natural resources. Two groups of countries were analysed: 20 oil developed countries and 20 oil developing countries. Given the availability of data and the achievement of balanced panels to evaluate short-term and long-term relationships between variables, in current research Data from 2010 to 2020 was used, and various panel data estimators such as Feasible Generalized Least Squares and Generalized Method of Moments were employed. The Quantile estimator was also used to assess the accuracy of the results. The findings suggest that renewable energy policies consistently lead to increased deployment of renewable energy technologies, regardless of a country's group. Of course, this positive effect is different according to the level of development in countries. Due to the higher efficiency of renewable energy policy, developed oil countries have more capacity to support renewable energy projects than oil developing countries. The abundance of natural resources in oil developed countries did not negatively impact renewable energy capacity, but in oil developing countries, the "resource curse" hindered the development of installed renewable energy.

Identifying the roles of energy and economic factors on environmental degradation in MINT economies: a hesitant fuzzy analytic hierarchy process

Globally, research communities have been studying the different determinants of environmental degradation or pollution using different contexts and methods. In this study, we identify several energy and economic factors, such as energy consumption (EC), gross domestic product (GDP), energy production (EP), urbanization (URB), and foreign direct investment (FDI) as the most effective factors of environmental degradation by obtaining several environmental researchers' opinions and using the hesitant fuzzy analytic hierarchy process. In the later stage of the analysis, we use these variables as regressors of the ecological footprint (EF) as a proxy for environmental degradation. Since we find evidence of cross-sectional dependence among the members of the variables, we use second-generational panel tests. First, we test the stationarity of the variables using the cross-sectionally augmented IPS (CIPS) panel unit test. The results show that the regressors have different orders of integration. So, we employ the Durbin-Hausman panel cointegration test to test the existence of a long-run relationship between the variables. Having found a long-run relationship, we estimate the long-run coefficients using the common correlated effects mean group estimator, which reveals that energy consumption has an increasing effect on the EF in Indonesia and Turkey, while energy production has a negative impact in Mexico and Turkey. While GDP has an increasing effect in all countries, FDI has a similar effect in only Indonesia. Moreover, URB decreases the ecological footprint in Nigeria, while it increases in Turkey. Our approach to the evaluation of environmental degradation can be generalized to other regions as well as where there is a significant need to understand the roles of different drivers on environmental degradation or pollution.

CO2 emissions policy thresholds for renewable energy consumption on economic growth in OPEC member countries

Purpose

This study aims to examine the nexuses between economic growth, trade openness, renewable energy consumption and environmental degradation among organization of petroleum exporting countries (OPEC) members over the period 1990–2019.

Design/methodology/approach

The empirical strategy for the study includes dynamic heterogeneous panel pooled mean group (PMG), mean group (MG) estimators and dynamic panel threshold regression (TR) analysis. For clarity, PMG and MG are used to explore the long-run relationship between the variables, whereas TR is used to uncover the actionable and complementary policy thresholds in the nexuses between green growth and environmental degradation.

Findings

The empirical evidence is based on the significant estimates from PMG and TR. First, using PMG, the study finding revealed a long-run relationship between economic growth and environmental degradation via the PMG estimator. Second, using TR, the study revealed an actionable threshold for carbon dioxide emissions (CO2) metrics tons per capita (mtpc) not beyond a critical mass of 4.88mtpc, and the complementary policy threshold of 85% of the share of trade to gross domestic product, respectively.

Research limitations/implications

The policy relevance of the thresholds is apparent to policymakers in the cartel and for policy formulation. The policy implication of this study is straightforward.

Originality/value

The novelty of this study stalk in the extant literature on providing policymakers with an actionable threshold for CO2 emissions with the corresponding complementary threshold for trade policies in the nexuses between green growth and the environment.