Climate change promotes energy and economic downturns: Equator-based evidence

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Published: Dec 20, 2025
DOI: https://doi.org/10.22515/sustinere.jes.v9i3.528
Keywords:
Climate change, Energy intensity, Gross Domestic Product (GDP), Natural disaster, Equator

Issue
Vol. 9 No. 3 (2025): pp. 239-407

Main Article Content

Siti Aubrey Salsabila Tisarani Putri
The Audit Board of the Republic of Indonesia, Indonesia
Muhammad Rafi Bakri
The Audit Board of the Republic of Indonesia, Indonesia
Rifky Pratama Wicaksono
Crawford School of Public Policy, Australian National University, Australia
Agatha Malona Situmorang
School of International and Public Affairs, Columbia University, United States of America

Abstract

This study examines the impact of climate change on energy intensity and its cascading effects on national economies. Climate change constrains energy consumption, thereby influencing Gross Domestic Product (GDP), particularly in equatorial nations where its effects on the energy sector and economy are more pronounced. Using a dataset of 1,612 observations from 1990Q1 to 2020Q4 across 13 equatorial countries, this research employs the Vector Autoregressive (VAR) model, particularly the Impulse Response Function (IRF), to assess climate change’s influence. Accordingly, the IRF is utilized to forecast the future trajectory of energy intensity and economic performance under worsening climate conditions. Findings indicate that natural disasters (-0.067), precipitation (-0.005), and rising temperatures (-0.317) significantly reduce energy intensity, ultimately disrupting economic stability. The analysis further reveals that these climate factors will continue to weaken energy intensity and economic growth over the next ten periods. To mitigate these risks, equatorial countries must adopt policies promoting sustainable energy and climate resilience. Governments should establish robust regulatory frameworks, enhance international collaboration, and share best practices to strengthen climate adaptation and mitigation efforts, ensuring economic stability and long-term sustainability.

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Articles
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This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Author Biographies

Muhammad Rafi Bakri, The Audit Board of the Republic of Indonesia, Indonesia

Data Analyst Professional with 3 years of experience as a Research Assistant at Supreme Audit
Institution (SAI) of Indonesia, specializing in public sector audits across diverse areas such as
finance, social programs, environmental initiatives, and SDGs at both regional and national
government. Moreover, He served as a Research Assistant at ERIA and BRIN, contributing to
impactful studies on carbon accountability.

Rifky Pratama Wicaksono, Crawford School of Public Policy, Australian National University, Australia

During nearly a decade of his career, Rifky has been involved in several performance audit working groups with various themes–poverty alleviation, ease of doing business, regional investment, to sanitation and clean water. That experience enriched his perspective in viewing the audit process comprehensively. As a policy analyst , Rifky has published several op-ed analysis on various policy platforms, such as East Asia Forum, Modern Diplomacy, Stratsea, Association of Certified Fraud Examiners, and Warta Pemeriksa to enhance his policy advocacy skills.

Agatha Malona Situmorang, School of International and Public Affairs, Columbia University, United States of America

Agatha Malona Situmorang is a civil servant at the Audit Board of the Republic of Indonesia (BPK RI), the country’s supreme audit institution. She has experience in auditing financial statements for both Indonesian ministries and local governments. Her background also includes serving as an executive assistant, a role that has strengthened her ability to build networks across various sectors and deepened her understanding of political dynamics. She is committed to contributing to public service with integrity and professionalism. Currently, she is a postgraduate student at the School of International and Public Affairs (SIPA), Columbia University, pursuing a Master’s in Public Administration with concentrations in Economic and Political Development.

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