The dynamic impact of non-renewable and renewable energy on carbon dioxide emissions and ecological footprint in Indonesia

The global trend of environmental degradation, marked by escalating carbon dioxide (CO2) emissions and expanding ecological footprints, poses a significant risk to the planet and leads to global warming. This decline in the environment is primarily attributed to the extensive use of non-renewable energy sources and substantial economic activities. This study investigates the dynamic impact of non-renewable energy (coal, gas, and oil), renewable energy, economic growth, and capital formation on CO2 emissions and the ecological footprint in Indonesia spanning from 1965–2022. Employing Fully Modified Ordinary Least Squares (FMOLS), Ordinary Least Squares (DOLS), and a robustness test with Canonical Cointegrating Regression (CCR) techniques, we seek to establish long-term associations among the studied variables. Preliminary findings, supported by our primary models, reveal that every increase in coal and gas directly results in higher CO2 emissions but does not affect ecological footprints. Conversely, every increase in oil affects the rise of ecological footprints but not CO2 emissions. Meanwhile, the rise in renewable energy will reduce both CO2 emissions and ecological footprints, consequently enhancing Indonesia's environmental quality. Furthermore, increasing economic growth will increase both CO2 emissions and ecological footprint, while the rise in capital formation reduces the ecological footprint. The Granger causality test showed unidirectional causality from CO2 emissions to renewable energy and also revealed bidirectional causality between ecological footprint and renewable energy. This study clarifies the patterns of energy emissions in Indonesia and provides policymakers with recommendations for maintaining environmental sustainability, including investing in renewable energy use and transitioning away from non-renewable energy, given the pressing climate challenges and the goal of achieving carbon neutrality. Renewable energy is a key sector for enhancing environmental quality in Indonesia. This study explores the potential factors for reducing CO2 emissions and ecological footprint in Indonesia. The FMOLS and DOLS methods have been applied to time series data, supported by a robustness test using CCR. The results provide a clearer insight into how renewable energy can help decrease both CO2 emissions and the ecological footprint, whereas non-renewable energy exacerbates these issues in Indonesia. This study offers policy recommendations to help achieve environmental sustainability and carbon neutrality. Renewable energy is a key sector for enhancing environmental quality in Indonesia. This study explores the potential factors for reducing CO2 emissions and ecological footprint in Indonesia. The FMOLS and DOLS methods have been applied to time series data, supported by a robustness test using CCR. The results provide a clearer insight into how renewable energy can help decrease both CO2 emissions and the ecological footprint, whereas non-renewable energy exacerbates these issues in Indonesia. This study offers policy recommendations to help achieve environmental sustainability and carbon neutrality.