Does the causal relationship between renewable energy consumption, CO2 emissions, and economic growth exist in Thailand? An ARDL approach

Abstract

This paper investigates the causal relationship between CO2 emissions, energy consumption, and income in Thailand using the data between 1986 and 2012 from the Energy Statistics of Thailand. We apply an Autoregressive distributed lag (ARDL) cointegration analysis in the estimation and test whether the Environmental Kuznets Curve (EKC) hypothesis exists in Thailand. The empirical results suggest that there is inverted-U-shaped relationship between CO2 emissions and income, which affirms the validity of Environmental Kuznets Curve (EKC) hypothesis in Thailand. The causality results indicate long-run relationship between CO2 emissions, energy consumption, and income. In the short run, there is bi-directional causality between CO2 emissions and income, and between CO2 emissions and energy consumption. However, there is no causal relationship between renewable energy consumption and CO2 emissions in the manufacturing sector as a result of government supporting policy on the use of renewable energy in this sector.