Does energy efficiency development in manufacturing industry decouple industrial growth from CO₂ emissions in Indonesia?

Abstract

This paper reports an examination by means of the Logarithmic Mean Divisia Index (LMDI) to describe the decoupling indicators of CO2 emissions into key factors of Indonesia’s manufacturing industry, namely, economic activity, industrial structure, energy intensity and energy structure in the period 2010–2014. The findings show that the impact of energy efficiency development on decoupling CO2 emissions in industrial sub-sector, the intensity of technology, and firm size are varied. Energy structures and industrial structures have little impact on decoupling CO2 emissions. Comparative analysis of industrial sub-sectors and other characteristics reveals that the growth of industrial economic activity determines the decoupling status of CO2 emissions from industrial growth in Indonesia.