At his recent Earth Day Climate Summit, US President Joe Biden pledged to cut America's greenhouse gas emissions in half by 2030. If delivered, this promise would transform the US economy -- for the better. Mr Biden's announcement adds to a rapidly growing list of commitments from countries and corporations around the world to move toward net zero emissions, an ambitious goal often referred to as the "Race to Zero".
I believe Thailand has what it takes to become a regional leader and a net zero champion: it commands the natural resources, work force, capital and managerial expertise it takes for success. However, to become a pioneer in this race, Thailand needs one essential mindset shift: letting go of the status quo. Unlike, for example, Singapore, Thailand often struggles with implementing larger institutional or systemic change, which is exactly what will be required.
The Race to Zero requires the acceleration of cross-sector piloting, implementing and scaling-up innovations in key regulatory systems -- a step change from formulating stiff plans and strategies that conform to international developments, something that Thailand has excelled in in the past.
Thailand was represented at the US Earth Day Summit by Natural Resources and Environment Minister Varawut Silpa-archa, who discussed Thailand's vulnerability to climate change and measures it has taken within its agricultural economy.
In recent years, some significant promises related to climate action have been announced, among them the government's pledge to achieve 20-25% GHG reduction by 2030, its plan that all vehicles sold domestically will be electric by 2035, and its promotion of the Bioeconomy, Circular economy and Green economy (BCG) strategy to underpin the Thailand 4.0 policy. In addition, a Climate Change Act is being formulated by the Office of Natural Resources and Environmental Policy and Planning (Onep).
In the private sector, one of its largest conglomerates, Charoen Pokphand Group (CP Group), has rather boldly announced its own net zero target last year. The CP Group's recognition of this urgent global agenda item, along with more than 1,000 other large companies around the world, is a positive sign.
Thailand's presentation of its own Race to Zero targets is expected to come at COP 26 in November, with a roadmap being jointly developed by the environment and energy ministries. But for any net zero vision to succeed and result in meaningful change, it would have to be truly inclusive, with a wide participation of innovative stakeholders across all sectors. The Race to Zero will define future competitiveness.
Climate change is just one reason why the Race to Zero is possibly the defining transition of our times. The transition to a net zero economy is about nothing less than the next stage of the industrial revolution and the future competitiveness of nations and companies.
It will create radically different playing fields across many industries, shifting the roles for existing players, and opening up opportunities for new actors to step in. That's why countries with even much larger economies than Thailand -- such as those of China, Korea and Japan -- have already declared a much more aggressive net zero ambition.
While this transformative shift to net zero has been initiated by policy support for clean technology in many countries, it is now being delivered by technological innovation and groundbreaking new convergences between industries on a global scale.
For example, the power sector -- driven by cheap renewable energy, the declining cost of energy storage, and smart devices -- is decentralising. Power supply and demand will become much more flexible and they will interface with e-mobility and the energy management of buildings in ways that will give rise to new business models and new market participants.
Declining battery costs and digital connectivity have created a tipping point for electric mobility. The convergence of the mobility and the power sectors will increase grid flexibility, with new forms of variable renewable energy generation emerging on the utility level, through the private ownership of solar roofs, for example.
An entire food systems transformation is already well under way. The food industry, driven by food-tech innovation, changing diets and consumer preferences, is becoming more plant-based, decentralised and circular (that is, including reducing food waste). Farmers play an increasing role as energy producers (energy crops, use of biomass waste) and land-use managers/caretakers, receiving compensation for increasing the storage of carbon in agricultural soils. An exciting consequence of this transition will be tangible benefits for the consumer and society at large. The transformations described above will make our cities greener and less noisy, and our countryside more ecologically diverse.
The rural, more remote communities in Thailand will see better income opportunities, making them more attractive places to live in. Transport will become cheaper and more seamless, with a large percentage of the population able to produce, use and sell their own energy, increasing their income and reducing expenses. Overall, we would lead healthier, more prosperous and sustainable lives.
But no change is easy. The shift to net zero will create short-term losers -- namely those that are not prepared or willing to transition because they derive a substantial share of their current income from economic assets and business models that could become obsolete. It will be a massive task for the government and society to negotiate the conflicts that are inherent in such a transition.
The Race to Zero is not the 400-metre hurdles but an ultra-marathon, one that will keep us engaged for decades to come. Large companies in Thailand understand this new mentality, as well as the fundamental implications that the Race to Zero will have on their business models if they are caught unprepared. But getting ahead of regulation and prioritising low-carbon innovation within and beyond their direct operations will empower them to drive the new rules of the game.
The collective challenge is ensuring that this journey is truly inclusive. The transition to net zero is an enormous, society-wide undertaking which cannot be delivered through traditional bureaucratic mechanisms and thinking. The planning of this transition requires broad collaboration across various stakeholder groups, as new solutions will necessarily cut across existing sector boundaries.
The reset created by the Covid-19 pandemic represents a golden opportunity for Thailand to use inclusive stakeholder participation processes to create a shared vision of building back better, and to build more room for outside innovators who have a higher appetite for risk and who can help roll out essential innovations. An intentional shift away from the status-quo towards innovative systems-thinking will be the key. While there may be short-term resistance, the long-term benefits for Thailand will be increased resilience and competitiveness, economic stability and security, and a healthier society.
This column is the first in a series of columns that will examine Thailand and the 'Race to Zero' in light of contemporary opportunities and challenges.
Ingo Puhl is a resident of Bangkok and co-founder of South Pole, the world's leading climate solutions provider and climate project developer: www.southpole.com