Analysis of Factors Affecting Greenhouse Gas Emissions in Indonesia Using Error Correction Model Approach

Abstract

Indonesia is committed to substantially reducing greenhouse gas emissions, in line with the 2015 Paris Agreement’s long-term goal of holding the global average temperature increase from exceeding 1.5°C above pre-industrial levels. The condition of greenhouse gas emission in Indonesia has an increasing trend with an average growth rate of 6.19% from 2000 to 2023. The amount of greenhouse gas emissions in 2023 reached 1.254 billion tons, with the energy and forestry sectors contributing significantly. This study analyzes whether primary energy consumption, forest area, and gross domestic product value affect reducing greenhouse gas emissions in Indonesia. This study uses the Error Correction Model approach, which is capable of observing greenhouse gas emissions conditions in short-term and long-term models. The best model equation obtained the variable of forest area with greenhouse gas emission, with the analysis showing that optimal forest area has a significant effect on reducing greenhouse gas emissions in the long term. The findings indicate that sustained efforts, reforestation initiatives, and law enforcement on reforestation not only increase the absorption capacity of greenhouse gas emissions by the forest but also align with economic development and environmental sustainability simultaneously in the long term.