The economy-wide impact of controlling energy consumption in Indonesia: an analysis using a Social Accounting Matrix framework

Abstract

Escalating oil prices and the need to control carbon emissions sound the alarm for Indonesia to reduce or be more efficient in its energy use. To create an incentive for society to be more energy efficient, they need to understand the full consequences of adopting more efficient energy use strategies toward their incomes. This paper aims to analyse the impact on the economy of energy policies aiming to reduce and to improve the efficiency of energy use, particularly on the income of various household groups. This paper will, first, construct a Social Accounting Matrix for Indonesia with detailed energy sectors and, second, utilise various multiplier analyses to observe and understand the impact of these energy policies.