The Correlation of Economic Development Toward Environmental System in Indonesia (Study in East Java Province)

Abstract

This research aims to know the relationship of economic development focused on the growth rate of agriculture, industrial and transportation index toward environmental quality of life in the East Java. The models is used in this study is Vector Error Correction Models (VECM) and the method selected in this research is the Granger Causality. The research of the method of analysis, the Granger Causality show that a causal relationship or on-both-sides variabels relationship between the growth rate of industrial sector toward Environmental Quality of Life Index with a value of 0.0470 big as the significant level of 5%. Transportation sector has a causal relationship with value as big 0.0000 toward Environmental Quality of Life Index of the significant level of 5%. The Agricultural has a causal relationship with value as big 0.000 toward environmental quality of life index significant level of 5%. Meanwhile, the Environmental Kuznets Curve hypothesis proven in the East Java inverse U-shaped slope.