Determinants of Environmental Degradation in Thailand: Empirical Evidence from ARDL and Wavelet Coherence Approaches

Document Type: Original Research Paper

Authors

1 Faculty of Economic and Administrative Science, Cyprus International University, Northern Cyprus, Mersin 10- Turkey

2 Faculty of Economic and Administrative Science, Girne American University, North Cyprus, Mersin 10-Turkey

Abstract

This paper explores long-run and causal effects of financial development, real growth, urbanization, gross capital formation and energy consumption on CO2 emissions in Thailand by utilizing recent econometric techniques. The study employs ARDL technique to examine the long and short run interconnection between CO2 emissions and the regressors. Furthermore, we employ the FMOLS, DOLS and CCR as a robustness check to the ARDL long-run estimator. The study use time-series data spanning from 1971 to 2016. The study also utilizes the wavelet coherence technique to collect information on the association and causal interrelationship among these economic variables at different frequencies and timeframes in Thailand. The study objectives are structured to answer the following questions: (a) does the selected macroeconomic indicators impact CO2 emissions in Thailand? (b) if so, why? Findings reveal; (i) Negative and insignificant link between CO2 emissions and urbanization. (ii) GDP growth affects CO2 emissions positively. (iii) The interconnection between CO2 emissions and energy usage is positive. (iv) Gross capital formation impact CO2 emissions positively. (v) Positive interconnection exists between financial development and CO2 emissions in Thailand. Additionally, the wavelet coherence result provides a supportive evidence for the ARDL long run result. Based on these findings, policy directions were suggested.

Keywords


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