• Vol 8, No 7 (2017)
  • Industrial Engineering

Analysis of The Effects of CO2 Emissions from Coal-Fired Power Plants on the Gross Domestic Regional Product in Jakarta

Arry Rahmawan Destyanto, Akhmad Hidayatno, Adinda Amalia


Cite this article as:
Destyanto, A.R., Hidayatno, A.Amalia, A., 2017. Analysis of The Effects of CO2 Emissions from Coal-Fired Power Plants on the Gross Domestic Regional Product in Jakarta . International Journal of Technology. Volume 8(7), pp.1345-1355
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Arry Rahmawan Destyanto - Industrial Engineering Department, Universitas Indonesia
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Akhmad Hidayatno Industrial Engineering Department, Universitas Indonesia
Adinda Amalia Industrial Engineering Department, Universitas Indonesia
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Abstract
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The phenomenon of rapid economic growth has caused a rise in energy consumption in Jakarta, including a rise in the need for electricity. To supply the population’s needs, Perusahaan Listrik Negara (PLN), Indonesia’s state-owned electricity company has a plan to build an additional power plant; the energy industry in Indonesia is currently dominated by coal-based power plants. However, this mega project will have an impact on Jakarta’s economy (gross domestic regional product, GDRP) and the CO2 emissions will have an effect as a result of the social cost of carbon because the coal-fired power plant has the highest emission rate compared with other power-plant types. Through the system-dynamics (SD) approach, this study aimed to examine several alternative policy scenarios and determine the best options that can be applied by the Jakarta government to ensure the success of electricity production, which can help to grow Jakarta’s economy and minimize the effects of CO2 emissions simultaneously. Three policies were simulated in the model: business as usual (BAU), a green policy, and a good economic policy. The results of simulation show that each scenario has its own advantages and disadvantages to achieve government target. This study reveals that using combination of green and economic policy is highly recommended to help Jakarta’s growth sustainably.

Electricity; Gross domestic regional product; Social cost of carbon; System dynamics

Conclusion

In this study, three major points can be concluded. The first conclusion is that, in the electricity module, Jakarta will not experience an electricity shortage within the period from 2016 to 2025 because the volume of production still showed a higher value than electricity demand. However, the results of the simulation also revealed an electricity demand growth that is higher than production, which indicates that an electricity shortage may happen after 2025. Furthermore, Jakarta’s economy will see average CAGR growth that is 7.49% higher than Indonesia’s economic growth. The emissions rate in Jakarta also will grow continuously with a CAGR of 1.61%, so that this, along with the increase in emissions, will create harmful effects that are measured in the SCOC. The second conclusion is that these three scenarios have different points of strength and weakness. For the GDRP indicator, the good-economic-policy scenario indicated the highest value for it, but the green-policy scenario revealed the maximum growth of GDRP. However, for the SCOC indicator, the green-policy scenario will create the lowest cost, which demonstrated the scenario that gives the lowest total emissions in Jakarta. The last indicator, electricity production, had no change in the production value because power-plant productivity in Jakarta still showed positive values for the period from 2016 to 2025. Even though a good economic policy will create the highest value of GDRP, the green-policy scenario will give the highest economic growth compared to the others, which is 0.01% higher than the good-economic-policy scenario and 0.03% higher than the BAU scenario. Based on the results of this research, we suggest that the Jakarta government should apply and combine two of the scenarios, using the good-economic-policy scenario for the first couple of years to boost GDRP, then continue by implementing the green-policy scenario to reduce Jakarta’s CO2 emissions.

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