Determinants of the deforestation problems in Indonesia :: A Perspective of the environmental Kuznets Curve

SULISTIANTO, Joko, Prof. Tatsuyoshi Matsumae

2009 | Tesis | S2 Magister Ekonomika Pembangunan

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This study aims to examine the relationship between income per capita and the deforestation rate as well as the other driving factors in the perspective of the environmental Kuznets curve. Using panel data analysis, we find an indefinite result regarding the environmental Kuznets curve with the application of the deforestation problems in Indonesia. The basic EKC model and the extended model show the upward slope of the EKC model, but the income per capita does not statistically significant in the extended EKC model and the turning point is far away from the current average of income per capita. This result postulated a contradict finding among researchers in the same topics while most of them argued that the environmental Kuznets curve did not exist in the Asia region. Since the income per capita solely does not affect and explain the deforestation rate, we extend to the other driving factors. One of the major determinants of the deforestation problem in Indonesia would be the log/timber productions while the income per capita and population density proved a non significant effect to the deforestation rate in Indonesia. This implies that the role of the government regulation regarding forest harvesting takes an important policy to manage the deforestation rate in Indonesia. Since the contribution of the forestry sub sector to the gross domestic product (GDP) declines on the last decade while the deforestation still occurred, the moratorium policy might be appropriate to be implemented to reduce the high rate of the deforestation.

Kata Kunci : Deforestation problems in Indonesia,Environmental Kuznets Curve