Determinants of Indonesia’s Environmental Quality Index, Including Human Development, Economic Growth, Deforestation, and Budget Allocation

Rajib Wahyu  Nugroho; Maryono; Jafron Wasiq  Hidayat

doi:10.47540/ijsei.v6i3.2439

Authors

Rajib Wahyu Nugroho Environmental Science Master Program, Universitas Diponegoro, Indonesia
Maryono Environmental Science Master Program, Universitas Diponegoro, Indonesia
Jafron Wasiq Hidayat Environmental Science Master Program, Universitas Diponegoro, Indonesia

DOI:

https://doi.org/10.47540/ijsei.v6i3.2439

Keywords:

Deforestation, Environmental Quality Index, Human Development Index, Sustainable Development

Abstract

Environmental quality in Indonesia remains under sustained pressure due to ongoing deforestation, resource-intensive economic growth, and persistent regional development disparities. This study analyzes the influence of the Human Development Index (HDI), Gross Regional Domestic Product (GRDP), deforestation, and regional government revenue and expenditure budgets on the Environmental Quality Index (EQI) across 33 Indonesian provinces. The analysis employs panel data regression, with a Fixed Effects Model selected based on the Hausman specification test. The results reveal that HDI exerts a positive and statistically significant effect on environmental quality, with a one-point increase in HDI corresponding to a 1.988-point rise in the EQI. Deforestation and regional government budget variables do not demonstrate statistically significant effects on the EQI. These findings suggest that higher levels of human development are associated with improved environmental conditions, whereas economic growth trajectories that are predominantly driven by natural resource exploitation continue to degrade environmental quality. Accordingly, regional development policies should be directed toward strengthening human development performance, integrating environmental considerations into economic growth processes, and enhancing the effectiveness of regional budget allocations for environmental sustainability, in order to achieve inclusive and sustainable development.

Downloads

Download data is not yet available.

References

Aida, N., Hermawan, E., & Ciptawaty, U. (2022, April 27). The Effect of GRDP, Foreign Investment and Population Density on Environmental Quality in Java Island (2010-2019).

Aldilla, R., Restiatun, & Afrizal. (2024). Factors Affecting the Environmental Quality Index in Indonesia (in Indonesian). Jurnal Ilmu Lingkungan, 22(6), 1494–1503.

Bentley Brymer, A. L., Toledo, D., Spiegal, S., Pierson, F., Clark, P. E., & Wulfhorst, J. D. (2020). Social-Ecological Processes and Impacts Affect Individual and Social Well-Being in a Rural Western U.S. Landscape. Frontiers in Sustainable Food Systems, 4.

BPS. (2023). Statistik Indonesia 2023. Bandan Pusat Statistik.

Finanda, N., & Gunarto, T. (2022). Analysis of the Influence of Economic Growth, Population Growth, and Poverty Levels on the Environmental Quality Index (in Indonesian). Jurnal Sosial Dan Sains, 2.

Ginting, R. F., Prajanti, S. D. W., & Setyadharma, A. (2023). Determinants of the Environmental Quality Index using the Environmental Kuznet Curve Test (in Indonesian). Business and Economic Analysis Journal, 3(1), 16–24.

Greene, W. H. (2020). Econometric analysis. Pearson.

Gujarati, D. N. (2003). Basic econometrics. McGraw Hill.

Hajad, V., Handayani, S. W., Ikhsan, I., Setiawan, D., Fadhly, Z., & Herizal, H. (2025). Land Politics and Food Security: A New Perspective on Land Degradation in Indonesia. Jurnal Ilmiah Peuradeun, 13(2), 813–846.

Hariyanti, F., Indasari, B., Syahza, A., Zulkarnain, & Nofrizal. (2021). Environmental Disparity Index (EDI): The New Measurement to Assess Indonesia Environmental Conditions for Supporting Sustainable Development. Jordan Journal of Biological Sciences, 14(3), 571–579.

Humanita, S. N. A., Muhdir, I., & Khoiruddin, A. Y. (2024). Determinants of Environmental Quality in Yogyakarta: Panel-Data Approach. Jurnal Magister Ekonomi Syariah, 3(1 Juni), 21–37.

Ilham, M. I. (2021). Economic Development and Environmental Degradation in Indonesia: Panel Data Analysis. Jurnal Ekonomi & Studi Pembangunan, 22(2).

Indriana, I., Asmat Ismail, N., & Rahyla Rahmat, S. (2021). Gross Domestic Regional Product, Population and Environmental Quality: Analysis of 33 Provinces in Indonesia. Journal of Applied Business, Taxation and Economics Research, 1(1), 51–65.

Li, X., & Xu, L. (2021). Human development associated with environmental quality in China. PLoS ONE, 16(2 February).

Long, X., Yu, H., Sun, M., Wang, X. C., Klemeš, J. J., Xie, W., Wang, C., Li, W., & Wang, Y. (2020). Sustainability evaluation based on the Three-dimensional Ecological Footprint and Human Development Index: A case study on the four island regions in China. Journal of Environmental Management, 265.

Masterson, V. A., Vetter, S., Chaigneau, T., Daw, T. M., Selomane, O., Hamann, M., Wong, G. Y., Mellegård, V., Cocks, M., & Tengö, M. (2019). Revisiting the relationships between human well-being and ecosystems in dynamic social-ecological systems: Implications for stewardship and development. Global Sustainability, 2.

Nanda Monika Marpaung, & Ni Luh Karmini. (2025). The Influence of Domestic Investment, Foreign Investment, and Labor on the Human Development Index (HDI) of Bali Province. Digital Innovation : International Journal of Management, 2(3), 233–247.

Noormalitasari, A. R., & Setyadharma, A. (2021). Determinants of Environment Quality Index In Indonesia. Efficient: Indonesian Journal of Development Economics, 4(2), 1174–1187.

Oladeji, A. A., Olarewaju, A. A., Barde, B. G., Iyabo, A. C., Mohammed, I. S., & Adamu, I. Y. (2021). Water Quality Analyses: Evidence from River Gashua and Some Selected Groundwater Sources in Gashua, Nigeria. Indonesian Journal of Social and Environmental Issues (IJSEI), 2(3), 196-203.

Opoku, E. E. O., Dogah, K. E., & Aluko, O. A. (2022). The contribution of human development towards environmental sustainability. Energy Economics, 106.

Perwithosuci, W., Amalia, A. M., & Perwitasari, A. W. (2025). Environmental Quality Index in Indonesia: Economic Activities, Investment, Forest and Land Fire. IOP Conference Series: Earth and Environmental Science, 1438(1).

Purnamadewi, Y. L., Orchidea, M. D., & Mulatsih, S. (2019). Fiscal policy and environmental quality in Indonesia. IOP Conference Series: Earth and Environmental Science, 399(1).

Puspitasari, A., & Yuliawan, D. (2023). The Influence of Economic Aspects and the Role of Government on Environmental Quality in Indonesia (in Indonesia). BULLET: Jurnal Multidisiplin Ilmu, 2.

Rahman, R. A., White, B., & Ma, C. (2024). The effect of growth, deforestation, forest fires, and volcanoes on Indonesian regional air quality. Journal of Cleaner Production, 457.

Raihannabil, S. D., Ananda, R. D., Kesumawijaya, A. A. I. A., Nabila, C. R., & Khairani, N. (2025). Why is Papua’s human development lagging behind? a comprehensive study of education, health, and welfare. Social Sciences Insights Journal, 3(1).

Ramadanti, V., & Suhab, S. (2023). The Effect of Regional Government Expenditures on Regional Development Inequality in Eastern Indonesia. Jambura Equilibrium Journal, 5(1), 2023.

Ramadhan, A. M. (2023). The Impact of Economic Growth on Environmental Quality in the Province of Sumatra Island (in Indonesian). Determinasi: Jurnal Penelitian Ekonomi Manajemen Dan Akuntansi, 1.

Rosyid, A., Rohani, S., Shabila, S., & Damayanti, E. (2025). The Contribution of Education, Health, and Unemployment on HDI in East Java, Indonesia. International Journal of Entrepreneurship and Business Development, 08, 4.

Setiawan, M. R., & Primandahan, W. P. (2022). Analysis of the influence of several GRDP sectors on the environmental quality index in Indonesia (in Indonesian). KINERJA: Jurnal Ekonomi Dan Manajemen, 19(1), 53.

Siregar, S. W., & Hasbi. (2025). Environmental Sustainability in Indonesia: The Impact of Islamic Financial Development, Economic Growth, Poverty, Population on Environmental Quality. Journal of Islamic Economic and Business Research, 5(1).

Soeparno, W. S. I., Anggia, Y., Sari, R. L., & Purba, F. A. (2024). Economic Growth, Population Density, and Human Development: Key Drivers of Environmental Quality in Indonesia. International Journal on Economics, Finance and Sustainable Development (IJEFSD).

Ushurhe, O., Uzowulu, O. D., Origho, T., Tennyson, E. U., & Chukubuzor, E. V. (2024). Upshots of Surface Water Quality on the Incidence of Water-Borne Disease Cases in Communities Along River Ase in Southern Nigeria. Indonesian Journal of Social and Environmental Issues (IJSEI), 5(2), 125-146.

Wafiq, A. N., & Suryanto. (2021). The Impact of Population Density and Economic Growth on Environmental Quality: Study in Indonesia. Jurnal Ekonomi & Studi Pembangunan, 22(2), 301–312.

Walker, R. (n.d.). Deforestation and Economic Development.

Wang, Q., Wang, X., Li, R., & Jiang, X. (2024). Reinvestigating the environmental Kuznets curve (EKC) of carbon emissions and ecological footprint in 147 countries: a matter of trade protectionism. Humanities and Social Sciences Communications, 11(1).

Wooldridge, J. M. (2010). Econometric Analysis of Cross Section and Panel Data.

Yahman, Y., & Setyagama, A. (2023). Government policy in regulating the environment for development of sustainable environment in Indonesia. Environment, Development and Sustainability, 25(11), 12829–12840.

Zhang, Y., & Wu, Z. (2022). Environmental performance and human development for sustainability: Towards to a new Environmental Human Index. Science of the Total Environment, 838.