THE PUBLIC POLICY DILEMMA OF LPG SUBSIDIES: ENVIRONMENTAL IMPACTS AND THE PATH TO GREEN ALTERNATIVES

Abstract

Government-subsidized household Liquefied Petroleum Gas (LPG) has been a key policy in Indonesia to ensure energy accessibility for low-income communities. While this initiative has contributed to economic and social welfare, its environmental impact, particularly its carbon footprint, remains understudied. This study aims to analyze the environmental implications of subsidized LPG, focusing on its carbon footprint and exploring potential green energy alternatives. Using a systematic literature review, the study examines previous research on LPG emissions, government policies, and sustainable energy solutions such as biogas, BioLPG, and solar energy. Findings indicate that while LPG emits lower carbon compared to traditional biomass fuels, its widespread subsidy poses sustainability challenges, including fiscal burden and carbon emissions. Alternative energy sources, such as biogas and BioLPG, offer promising solutions, yet their adoption is hindered by technological and economic constraints. This study highlights the urgent need for policy reforms to gradually transition subsidized household energy from fossil fuels to sustainable alternatives. Future research should focus on assessing the economic feasibility and policy frameworks necessary to facilitate this energy transition effectively.