Managing Macroeconomic Policies for Sustainable Growth

Managing Macroeconomic Policies for Sustainable Growth

John Asafu-Adjaye and Renuka Mahadevan

The authors expertly reveal a model-based analysis of economic development and environmental issues with policy prescriptions for enhancing sustainable development. Within the last four decades, there has been a rapid deterioration in the quality of our environmental and natural resources, raising grave concerns about the sustainability of unbridled economic growth. In light of these concerns, the authors analyse a range of economic and environmental issues, and propose policy recommendations that would enhance sustainable economic growth. The book covers a variety of issues related to economic development, trade, energy and climate change, and focuses on countries in the Asia-Pacific region including Australia, Thailand, Papua New Guinea and Fiji.

Chapter 6: An Analysis of Renewable Energy Policy in Thailand

John Asafu-Adjaye and Renuka Mahadevan

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, development economics


6.1 INTRODUCTION1 Thailand is a developing country in Southeast Asia, with a population of approximately 67 million in 2009. The average annual real GDP growth rate of Thailand was 6.6% between 1960 and 2007. Thailand’s GDP was only US$2,760 million at 2000 constant prices in 1960, and per capita GDP was US$317 (Table 6.1). At that time, Thailand’s economy was heavily based on the agricultural sector which accounted for 31.5% of GDP, while the contribution of the manufacturing sector was only 14.5%. Through a process of continuous transformation from agricultural to more sophisticated manufacturing based economy, Thailand’s per capita GDP increased 8.5 times from 1960 to 2007,2 while GDP rose about six-fold to US$17,315 million. Agriculture now plays a lesser role in the economy, accounting for only 8.6% of GDP. On the other hand, the manufacturing sector’s share of GDP has grown rapidly to 39.6% of GDP. The remarkable GDP growth driven by the manufacturing sector has stimulated energy consumption in Thailand. As seen from Table 6.1, per capita primary energy use rocketed from 487 tons of oil equivalent (toe) to 1,667 toe between 1980 and 2007. In the same period, final energy use in manufacturing rose by approximately 6.8% per annum from 3,995 kilo tons of oil equivalent (ktoe) to 23,536 ktoe. A number of studies (e.g., Asafu-Adjaye, 2000; Fatai et al., 2004) have established that, in the case of Thailand, there exists a two-way causal relationship between economic growth...

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