An Application of Quadratic EKC model: Energy Use, Economic Development, and Environmental Quality for Thailand

Abstract

This study examines the validation the relationship of environmental and energy for Thailand. Further this study examined the impact of economic growth, non-renewable and renewable energy and FDI on environment, with the help of time series data from 1990 to 2018 with ecological damage indicator, i.e., emission of carbon dioxide (CO2). This study applied Autoregressive (ARDL) Distributed Lag model for testing the cointegration in the model. In the long run, the results of this study confirm the existence of cointegration in the model. However, the negative effect of growth on the environment confirms the existence of the Kuznets Environmental Curve (EKC), which means that economic growth harms Thailand’s environment. Renewable energy and foreign direct investment are the key aspects that reduce environmental degradation in Thailand during the study period. Therefore, the government must redouble its efforts to reduce carbon dioxide CO2 emissions, perhaps through regulatory intervention or mandatory renewable energy applications for individual household and industrial segments. For example, the manufacturing sectors, iron, and steel must prioritize, reducing the high non-renewable energy consumption for those which are renewable. The government must introduce specific measures and campaigns for environmental protection for future generations as well as introduce taxes for polluters. Another relevant recommendation is to create an industry that relies on low energy consumption compared to high productivity levels.