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Economic performance of Indonesia amidst CO2 emissions and agriculture: a time series analysis

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Abstract

To minimize the awful situation confronting the entire globe, the global warming danger has raised the intensity of consciousness from all areas of life. Therefore, the research assesses the impact of CO2 emissions and energy use on economic performance and considers trade openness, urbanization, and agriculture in Indonesia utilizing data covering the period from 1965 to 2019. The current research employed the dynamic ordinary least square (DOLS) and autoregressive distributed lag (ARDL) tests to capture the long-run association between these economic indicators. Furthermore, the gradual shift and wavelet coherence tests are utilized to capture the direction of causality. The ARDL bound test discloses a long-run interconnection among the variables of interest. The outcomes of the ARDL and DOLS depict that CO2 emissions, agriculture, energy use, and urbanization trigger economic growth. Moreover, the wavelet coherence test findings revealed a positive correlation between economic growth and urbanization, CO2 emissions, agriculture, and energy consumption. Furthermore, there is evidence of a weak and positive correlation between economic growth and trade openness. The gradual shift causality test outcomes disclosed that economic growth can predict urbanization and energy consumption, while agriculture can predict economic growth. These outcomes have far-reaching significance for economic growth and the selected variables in Indonesia.

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Data availability

Data is readily available at https://data.worldbank.org/country/Indonesia.

Notes

  1. Low-carbon development initiatives

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Authors and Affiliations

  1. Department of Business Administration, Faculty of Economics and Administrative Science, Cyprus International University, Nicosia, Mersin, Northern Cyprus, TR-10, Turkey

    Tomiwa Sunday Adebayo

  2. Department of Business Management, Faculty of Economics and Administrative Sciences, Girne American University, Mersin, North Cyprus, Turkey

    Gbenga Daniel Akinsola

  3. Department of Banking and Finance, Faculty of Economics and Administrative Sciences, European University of Lefke, Mersin, Lefke, Northern Cyprus, TR-10, Turkey

    Dervis Kirikkaleli

  4. Faculty of Economics Administrative and Social sciences, Istanbul Gelisim University, Istanbul, Turkey

    Festus Victor Bekun

  5. Department of Accounting, Analysis and Audit, School of Economics and Management, South Ural State University, 76, Lenin Aven, Chelyabinsk, Russia, 454080

    Festus Victor Bekun

  6. University of Mediterranean Karpasia, TR-10, Mersin, Northern Cyprus, Turkey

    Sukru Umarbeyli

  7. Department of Management Information Systems, School of Applied Sciences, Cyprus International University, Nicosia, Mersin, Northern Cyprus, TR-10, Turkey

    Oseyenbhin Sunday Osemeahon

Authors
  1. Tomiwa Sunday Adebayo
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  2. Gbenga Daniel Akinsola
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  3. Dervis Kirikkaleli
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  4. Festus Victor Bekun
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  5. Sukru Umarbeyli
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  6. Oseyenbhin Sunday Osemeahon
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Contributions

Gbenga Daniel Akinsola and Tomiwa Sunday Adebayo designed the experiment and collected the dataset. The introduction and literature review sections are written by Oseyenbhin Sunday Osemeahon and Sukru Umarbeyli. Tomiwa Sunday Adebayo and Festus Victor Bekun constructed the methodology section and empirical outcomes in the study. Festus Victor Bekun and Tomiwa Sunday Adebayo contributed to the interpretation of the outcomes. All the authors read and approved the final manuscript.

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Correspondence to Tomiwa Sunday Adebayo.

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Adebayo, T.S., Akinsola, G.D., Kirikkaleli, D. et al. Economic performance of Indonesia amidst CO2 emissions and agriculture: a time series analysis. Environ Sci Pollut Res 28, 47942–47956 (2021). https://doi.org/10.1007/s11356-021-13992-6

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