From Jakarta to East Kalimantan: Is Environmental Quality under Control? A Case Study in the IKN

Environmental quality has become a major concern in East Kalimantan amid the development of the Nusantara Capital City/Ibu Kota Nusantara (IKN), which is driving changes in land use and economic transformation. This study is designed to investigate the effects of Gross Regional Domestic Product per Capita (GRDP_PC), economic growth (EG), poverty rate (PR), population density (PD), electrification ratio (ER), and environmental expenditure (EE) on the Environmental Quality Index (EQI) for regencies and cities in East Kalimantan Province from 2014 to 2025. The study utilized panel data and employed Pooled Ordinary Least Squares (POLS), dummy models (IKND and BZD), an IKN–buffer zone interaction model (IKNBUFFER), and the Difference-in-Differences (DID) method. The results of the investigation concluded that GRDP_PC has a positive and significant effect on the EQI, whereas EG, ER, and EE have a negative and significant effect. Conversely, PR and PD do not have a significant effect on EQI. Moreover, the IKND–BZD, IKNBUFFER, and DID variables show positive and significant associations, with the DID result indicating a differential change in environmental quality between buffer and non-buffer zones during the post-IKN period. The current findings underscore the urgency of strengthening green development policies that focus on the effectiveness of environmental expenditure and the transition to clean energy to ensure environmental sustainability in the IKN region and its surroundings.