Determinants of Energy Savings in Bogor, Indonesia: Results of an Ordinal Logit Regression

Event: Society for Environmental Economics and Policy Studies (SEEPS)
Date: Sept 10th 2016

Industrialized economies have been locked-into fossil fuel based energy systems through a path dependent process driven by technological and institutional increasing returns to scale. Indonesia which is experiencing rapid economic expansion, however, could choose not to repeat the same path by adopting precautionary actions that would divert the economy from relying heavily on fossil fuel and address climate change mitigation.
Nearly every study of climate policy options concludes that the single cheapest option for reducing GHG emissions is energy conservation. It is also a cost effective way to moderate the expected growth in electricity demand. Reducing energy consumption (i.e. energy savings) in households can be done in two ways: by changing the habit of using appliances; and by increasing the energy efficiency of the appliances used. Much of the literature on the determinants of energy saving behavior have concentrated in the EU (inclusive of UK), Nordic countries, U.S., Canada, Australia, and Japan and recently we see more from East Asia but very few can be found on the ASEAN region. The importance of this study could lie in this shortage of accumulated information.
What factors willingness to save energy in Bogor? Bogor will, in the near future, experience greater migration to the city triggering further electricity demand that will add stress to the state utility’s power generating capacity in the region. Under such circumstances, Bogor is an interesting case to study because there is still a window of opportunity to offer beneficial information that would prevent the carbon lock-in that so many economies find challenging to remove.