Revisiting Population Pressure and the Pollution Haven Hypothesis: Evidence from Forest Loss in Indonesia

Abstract: This study investigates the determinants of forest loss (tree cover loss) in Indonesia during 2000-2022, focusing on the roles of demographic factors, foreign direct investment (FDI), and economic growth, using a multiple linear regression analysis to quantify the partial effects of each explanatory variable while controlling for others. Annual time series data were compiled from internationally recognized sources, including the World Development Indicators (World Bank) and Global Forest Watch, ensuring reliability and comparability over time. Adapaun metode analThe results reveal that population exerts a significant negative effect on forest loss, reflecting the moderating roles of population redistribution, urbanization, agricultural intensification, and forest conservation policies. In contrast, FDI has a significant positive effect on on forest loss, particularly in mining and plantation sectors, confirming the relevance of the Pollution Haven Hypothesis. Economic growth does not exhibit a statistically significant effect on forest loss, consistent with the Environmental Kuznets Curve framework, which emphasizes the nonlinear relationship between development and environmental degradation. Overall, the findings highlight that investment direction, economic sector composition, and governance quality are more influential in shaping deforestation dynamics than aggregate economic growth or demographic pressures alone. Policy implications include the need for sector specific environmental regulation, strengthened law enforcement, promotion of green FDI, and integrated strategies linking urbanization and sustainable agricultural intensification. Future research should explore sectoral and spatial FDI impacts, incorporating institutional and governance indicators as moderating variables, to deepen understanding of deforestation mechanisms in Indonesia and other developing countries.