Analyzing the Relationship between Economic Growth and Carbon Dioxide (CO2) Emissions in Thailand: An Application of the VAR Model

Abstract

This study aims to analyze the relationship between economic growth and carbon dioxide (CO₂) emissions in Thailand, a critical issue for promoting sustainable green economic development. The research focuses on understanding the impact of carbon dioxide (CO₂) emissions on economic growth at both the macroeconomic level and per capita income. The data used in this study includes carbon dioxide (CO₂) emission rates, economic growth rates, alternative energy consumption rates, and per capita income, analyzed through a Vector Autoregressive (VAR) model to evaluate the relationships and responses among these variables in both the short and long term. The findings indicate that changes in carbon dioxide (CO₂) emission rates have a direct impact on alternative energy consumption. When carbon dioxide (CO₂) emissions increase by 1 standard deviation (S.D.), the rate of alternative energy consumption rises in the first year, peaks in the third year, and then gradually returns to equilibrium. Additionally, carbon dioxide (CO₂) emissions do not have a direct impact on economic growth, both overall and in terms of per capita income. However, an increase in carbon dioxide (CO₂) emissions shows only a slight response in economic growth and per capita income rates. The results highlight the necessity of effective economic instruments and public policies to manage environmental risks, enabling Thailand to achieve its goals of Carbon Neutrality and Net Zero Emissions. This can be achieved by promoting activities aligned with the Bio-Circular-Green Economy (BCG Model), which supports long-term sustainability for the country by reducing waste at all stages of economic activities and enhancing the ability to reuse resources.