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Forecasting Renewable Energy Transition Using Error Correction Model: Addressing Environmental and Sustainable Development

Hoerun Nisa orcid publons  -  Universitas Muhammadiyah Yogyakarta, Indonesia
*Dessy Rachmawatie orcid scopus publons  -  Universitas Muhammadiyah Yogyakarta, Indonesia
Younes Ziat orcid scopus publons  -  Sultan Moulay Slimane University, Morocco
Dyah Titis Kusuma Wardani  -  Universitas Muhammadiyah Yogyakarta, Indonesia

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Abstract

In the context of global warming, the transition from fossil fuels to renewable energy is crucial to reduce carbon emissions and achieve the Sustainable Development Goals. From 1990 to 2022, this study examines new energy consumption in Indonesia and examines its relationship with GDP, foreign direct investment (FDI), urbanization, carbon emissions (CO2), the exchange rate, and subsidies received. To determine the short- and long-term impacts, the ECM is used. In the short term, economic growth has a positive and significant effect on energy consumption; however, in the long term, the negative effect becomes more pronounced. Direct investment (FDI) has no significant effect on renewable energy consumption, creating a negative long-term trend. There are significant positive and negative dampening effects of urbanization on new energy consumption in the long term, but no significant short-term effects. Energy consumption, carbon emissions have a significant negative effect. The solution to construction and environmental challenges in Indonesia is to increase the capacity of renewable energy sources.

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Subject Renewable Energy; GDP; FDI; Urbanization; Carbon Emissions
Type Data Analysis
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 Data Analysis
data processing results
Subject Renewable Energy; GDP; FDI; Urbanization; Carbon Emissions
Type Data Analysis
  Download (32KB)    Indexing metadata
Keywords: Carbon emissions; FDI; GDP; renewable energy; tax revenue; urbanization

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