How agriculture, manufacture, and urbanization induced carbon emission? The case of Indonesia

Abstract

The agriculture and manufacturing sectors are the backbones of the Indonesian economy; for this reason, research on the effects of these sectors on carbon emissions is an important subject. This work adds urbanization to enrich research on the Environmental Kuznets Curve (EKC) in Indonesia. The results of this study indicate that the EKC hypothesis was confirmed in Indonesia with a turning point of 2057.89 USD/capita. The research results show that all variables affect the escalation of greenhouse gas emissions in Indonesia. Furthermore, there is a bidirectional causality relationship between emissions with economic growth, emissions with agricultural sector, emissions with manufacturing sector, economic growth with agricultural sector, and economic growth with manufacturing. The unidirectional causality is found in emissions by urbanization and economic growth by urbanization. To reduce the impact of environmental damage caused by the activities of agriculture, manufacturing, and urbanization sectors, it is recommended that the government conduct water-efficient rice cultivation and increase the use of renewable energy.