Chandrarin, Grahita ORCID: https://orcid.org/0000-0002-7024-1315, Sohag, Kazi, Cahyaningsih, Diyah Sukanti ORCID: https://orcid.org/0000-0002-9810-5075 and Yuniawan, Dani ORCID: https://orcid.org/0000-0001-9343-0349 (2022) Will economic sophistication contribute to Indonesia's emission target? A decomposed analysis. Technological Forecasting and Social Change, 181. pp. 1-10. ISSN 0040-1625

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Abstract

Indonesia aspires to reduce 29%–41% of the nation's carbon emissions by 2030 and to reach net zero‑carbon
emissions by 2060. The production paradigm of the Indonesian economy still relies entirely on dirty energy
sources, including coal, oil and gas. As it is a natural resource-abundant developing country, we simulate the
decomposed carbon emissions response to mounting economic growth and the Economic Complexity Index (ECI)
for the next 20 years, applying a dynamic simulated autoregressive distributed lag approach using time series
data from 1966 to 2018. Our investigation demonstrates that economic growth and increased ECI help to reduce
carbon emissions–oil use intensity and vice versa. Conversely, gas and coal emissions intensities respond positively
to ECI, but negatively to economic growth. Our findings confirm that inadequate technological
improvement in gas and coal use-oriented industries are detrimental to decoupling the economic
growth–emissions relationship.

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