Applying an Integrated Natural Resource Accounts and Input-Output Model to Development Planning in Indonesia

Natural resource accounts (NRA) can provide an effective tool for linking information about the environment and the economy. However, because NRA are quite new, their contribution to policy-making is not yet well established. This paper provides an example of how NRA can be used for policy analysis based on work conducted in Indonesia. An environmental-economic model is constructed by integrating the NRA with a 30-sector, dynamic input-output model. To assess the environmental implications of Indonesia's second long-term development plan, six alternative scenarios of ways to achieve the objectives of the plan were constructed for the period 1984-2020. These scenarios were based on combinations of assumptions about rates of economic growth and technological change, especially where this growth or change affects resource use. Economic and environmental results of the alternative scenarios are discussed.