Energy Options to Reduce Deforestation Using EKC Model: A Region‐Based Longitudinal Approach

Abstract

ABSTRACT Forests are carbon storage that can reduce carbon emissions, so deforestation (decrease in forest area) is a serious threat to environmental sustainability. Indonesia is a large carbon sink due to its large forests. However, deforestation is quite high due to economic activities that use fossil energy. In contrast to previous studies, this study uses deforestation per capita as a variable explained. The aim is to investigate the causes of deforestation in relation to economic variables with a focus on energy issues. Based on the EKC conceptual framework, control variables in the form of economic variables GRDP per capita and its square and technology in the form of proportion of internet usage. This study focuses on energy use, consisting of gas, electricity production, electricity consumption and fuel wood/charcoal/briquettes for cooking. The method is a longitudinal approach based on regional data for 8 years. The model used is dynamic panel data, which accommodates adjustments in deforestation per capita that are influenced by long‐term behavior and explores the diversity of data in the region. This study shows that the energy option that can reduce deforestation is currently gas. Indonesia has not yet reached the top of the Kuznet curve so the economy has not been able to improve environmental sustainability. The production and use of electrical energy in Indonesia is still not environmentally friendly and thus urgently requires investment in renewable energy and new technologies. In addition, the replacement of industrial machinery and household electrical appliances requires new technology to be more efficient.