Abstract
The purpose of this research is to analyze the relationship of causal factors and the error correction ability of these factors, including economic growth, government policy, and environmental growth, under the energy law of Thailand. This research proposes a novel structural equation model called the “Structural Equation Model based on Autoregressive Integrated Moving Average with Observed Variables (SEM-based on the ARIMAXi model)”. The validity of this proposed model is confirmed upon testing the goodness of fit and white noise property. Upon analysis, this research reveals that the SEM-based on the ARIMAXi (1,1,1) model is composed of causal factors, where economic growth was found to be related to environmental growth with an influential impact rate of 0.76 per cent at a confidence interval of 99 per cent. The relationship between economic growth and government policy was also detected to have a 0.51 per cent impact at a confidence interval of 99 per cent. Furthermore, this research identifies government policy as being related to environmental growth with an impact of 0.19 per cent at a confidence interval of 99 per cent. In addition, this research indicates that economic growth is the strongest factor with an error correction ability of -0.74, followed by government policy and environmental growth factors with an error correction ability of -0.45 and -0.06, respectively. With the weakest error correction ability in environmental growth, this suggests that the government must intervene in taking action to preserve the environment.Keywords: Structural Equation Model, greenhouse gases, carrying capacity, energy consumption, Error Correction Mechanism, causal factors.JEL Classifications: P28, Q42, Q43, Q47, Q48DOI: https://doi.org/10.32479/ijeep.9995
Highlights
Over the past 30 years, Thailand has undergone rapid and continual development (The World Bank: Energy Use (Kg of Oil Equivalent Per Capita) Home Page, 2020; Office of the National Economic and Social Development Council: NESDC, 2020)
This model accounts for three key latent variables, namely economic growth (ECG) government policy (GPG), and environmental growth (ENG)
This research confirms that every indicator is found to be co-integrated at the first difference level, and it is used to model the SEM-based on the ARIMAXi (1,1,1) model
Summary
Over the past 30 years, Thailand has undergone rapid and continual development (The World Bank: Energy Use (Kg of Oil Equivalent Per Capita) Home Page, 2020; Office of the National Economic and Social Development Council: NESDC, 2020). The government has empowered domestic production and processes in order to satisfy domestic consumption and overseas exports (NESDC, 2020; National Statistical Office Ministry of Information and Communication Technology, 2020). The said production has focused on certain industries, especially textiles, gems and jewelry, car parts accessories, and agricultural industries The result of this focus is the large amount of national revenues (NESDC, 2020). The government has emphasized production bases within the country in order to optimize from a mechanism of foreign direct investment. This process is done by collaborating with key trading partners investing in the key local industries.
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