The main purpose of this paper is to analyze the relation between the development of manufacturing sector, its compositional changes, its demand for energy and their consequence on the emission of greenhouse gases. Various policies which affect the development of the sector will also be discussed.

During the last twenty years before the Crisis, Indonesia’s gross domestic product (GDP) grew at relatively high rates which averaged at 6.59 percent annually within the period of 1976-1996. This high growth had been supported mainly by the rapid growth of manufacturing sector that grew, on...