Journals Proceedings

Abstract

The aim of this study is to understand the relationship between CO2 (carbon dioxide) emissions, energy consumption, economic growth and FDI (foreign direct investment) in Thailand during the period from 1988 to 2014. This study use cointegration and Granger causality to examine the relationship between the variables. The results confirm the existence of long-run equilibrium among all four variables. Meanwhile, energy consumption and FDI positively influence CO2 emissions. Moreover, square of economic growth has negative impact on CO2 emissions in Thailand. The results also reveal that there are two way causalities between CO2 emissions and energy consumption in Thailand. Given the result that square of economic growth has negative impact on CO2, these findings support the EKC(Environmental Kuznets Curve) hypothesis which assumes an inverted U-shaped relationship between CO2 emissions and economic growth in Thailand. In addition, energy consumption is found to Granger cause CO2 emissions in the shortrun and long-run. The key determinants of CO2 emissions in Thailand are Energy consumption, FDI and economic growth. Therefore, adoption of clean technologies and green policy by Investors and policy makers are important in reduce CO2 emissions in Thailand, also important in accelerate economic development and sustaining economic development at the same time.