Is There a Trade-Off between Environmental Conservation and Economic Growth?: Empirical Evidence from Thailand

Abstract

This study examines the causal linkages between economic growth and two environmental indicators in the case of Thailand, carbon dioxide emission and energy use, in an attempt to examine whether there is a trade-off between environmental conservation and economic growth in Thailand. To do so, the Vector Autoregression and Granger Causality tests were employed to investigate the causality between economic growth as measured by real GDP, carbon dioxide emission, and energy use during 1961 – 2010. The findings indicate only a unidirectional and positive causality running from economic growth to carbon dioxide emission, whereas there was no evidence of causality from either carbon dioxide emission or energy use to economic growth. The findings remain unchanged as per capita variables were instead analyzed. As a result, there is no trade-off between environmental conservation and economic growth in Thailand since Thailand can implement policies to reduce carbon dioxide emission and energy use without harming economic growth or the well-being of its people.