Strategic Variables of Green Economy Transformation Toward Sustainable Development in Indonesia

Indonesian economic development has been characterized by the exploitation of natural resources, investments that contribute to high carbon emissions, and inefficient energy use. These have resulted in various development problems, such as air and water pollution in major cities, deforestation, congestion, and urban sprawl, depletion of fish stocks, water resources, and biodiversity, and the damaging impacts of global climate change. To address these issues and revive Indonesia's economy, the Green Economy approach is seen as a potential solution. This study aims to analyse the critical variables and their interrelationships in Indonesia's green economy transformation. A prospective analysis method, namely MICMAC (Matrix of Cross Impact Multiplications Applied to a Classification), was employed. The MICMAC analysis provided valuable insights into the critical variables and their interrelationships, highlighting the key factors that can drive the success of Indonesia's green economic transformation. As many as 25 variables were analysed to determine which variables act as drivers for the green economy transition and which variables act as relay, dependent and autonomous variables. The results show that the top ten most influential variables in Indonesia's green economy transformation mechanism are regulation, stakeholder engagement, and collaboration, fiscal incentive, institutional support, public investment in low carbon development programs, public awareness and behaviour, green finance, green investment, green technology, and the role of media. This underscores the importance of considering these variables in the process of green economy transformation in Indonesia. By prioritizing those key variables, Indonesia can pave the way for a more sustainable and inclusive future.