The Role of Digitalization in Facilitating Renewable Energy Transition and Reducing Greenhouse Gas Emissions in Thailand

Abstract

The study investigates the dual transitions of digitalization and renewable energy in Thailand to see if digital expansion facilitates the transition to renewable energy sources and greenhouse gas (GHG) mitigation. The study utilized data from the World Bank between 2000 and 2023 to reconstruct models for autoregressive distributed lag (ARDL) analysis for short-run and long-run dynamics under ecological modernization and technology diffusion theories. Contrary to expected synergies, empirical results revealed that a developing economy would find an ‘investment trade-off’ instead. Digitalization showed no significant immediate impact on renewable energy production; however, it exerted a significant negative lagged effect (coefficient = −0.593), suggesting that digital and energy infrastructures compete for limited financial resources. It was found that there is a 6.3% increase in greenhouse gas emissions for every 1% increase in internet usage. Thus, these results challenge the belief that increased internet usage will help improve the environment. Absent proper supportive policies about both digitalization and green transitions, such as investing in plants and machinery towards digitalization rather than green technology, the pacing effects of digitalization will affect the goals of converting to clean energy. This requires a policy coordination approach to ensure that funds earmarked for green infrastructure are safeguarded.