Economic Dynamics Under Polluted Skies: an Analytical Comparison of Jakarta, Surabaya, Makassar and Medan

Abstract

Air pollution has become a serious environmental concern in Indonesia, especially in heavily populated urban areas such as Jakarta, Surabaya, Makassar, and Medan. The fast urbanization process, along with a rise in personal vehicles and manufacturing growth, has been a significant factor in the rise in pollutant concentrations, particularly fine particulate matter (PM2.5). This research paper aims to analyze the correlation of air pollution to the economy, the number of workers in the manufacturing industry, and the consumption of gasoline in four metropolitan cities in Indonesia. The data used are secondary data analyzed using the Panel Data method. Panel data comprises a comprehensive period and areas covering the years from 2013 to 2023 period in Jakarta, Surabaya, Makassar, and Medan. The analysis was conducted using the EViews 13 software. The results demonstrate that Gross Regional Domestic Product (GRDP), the Proportion of Workers in the Manufacturing Industry and Fuel Consumption have a significant positive relationship with air pollution. The results of this study are expected to provide new insights, enabling policymakers to formulate effective regulations related to air pollution issues.