Green human development in Indonesia: Role of renewable and nonrenewable energy

Abstract

As the world’s fourth most populous country, Indonesia presents challenges and opportunities for sustainable energy progress, offering a critical context to investigate green human development (GHD). This study uniquely contributes to the literature by employing the planetary pressures-adjusted human development index (PHDI) as an indicator of GHD, which integrates environmental impacts into human development. Using static and dynamic econometric methods, including the quantile regression and autoregressive distributed lag model, it explores the impacts of renewable and nonrenewable energy consumption on GHD. The findings demonstrate that renewable energy currently has a detrimental impact on GHD due to its limited adoption and high costs. Conversely, nonrenewable energy positively influences GHD, as it is the primary energy source in the country and is becoming more efficient at reducing emissions. However, the study finds that greater use of renewable energy reduces its adverse effects, suggesting that as renewable energy technologies become more cost-effective and widely implemented, their initial adverse effects could be mitigated, leading to improved long-term GHD outcomes. These findings carry important implications for Indonesia, where the government is striving to expand renewable energy capacity while promoting equitable development across its archipelagic regions. They underscore the critical role of energy policy in balancing economic, social, and environmental goals, contributing meaningfully to the country’s sustainable development agenda.