Ambitious steps to go carbon neutral
To the surprise of many, Thailand announced at the recent COP26 climate summit in Glasgow that it would increase its long-term ambition on climate action -- pledging to reach carbon neutrality by 2050 and to achieve an economy with net-zero GHG emissions by or before 2065.
While this was a welcome and serious declaration of climate ambition, these sorts of commitments are so far out in the future that they are hard to place in a tangible context. What do the plethora of recent commitments -- by governments -- to achieve net-zero emissions by mid-century mean for the average person in Thailand, or in any country?
When you dig into most of these mid-century commitments -- whether by governments or corporations -- there is often little, if any, detail presented on how the current ways in which we live and do daily business will change next year, or within five years, in order for the realisation of these promises to begin. And writers on this editorial page have recently criticised Thailand for avoiding any potentially painful commitments to joint international action at COP26 on deforestation, methane reduction, and coal phase-out. In this context then, what does the recent Thai pledge to reach carbon neutrality by 2050 mean for Thailand?
What we can say with confidence is that the government has pledged to increase the share of renewable energy to 30% of total final energy consumption by 2037; that Thailand is seeking foreign investment and expertise to help it become a regional leader in electric vehicle (EV) production; that 30% of vehicle production by 2030 will be EVs; and that all vehicles sold domestically by 2035 will be "zero-emission".
The commitment to shift completely to sales of EVs within less than 15 years is noteworthy. For consumers, this means that the next car they buy, if not electric, may be the last fossil-fuelled car they purchase in their lifetime. This could usher in a significant, conspicuous transformation -- one that is hard to get one's head around given the current state of play. Arguably, the bigger public impact of EVs in Thailand will be the electrification of public transport, which will provide the majority of Thais with quieter, cleaner, and more pleasant commuting options.
In general, this Thai commitment reflects a recognition of the way the economic winds are blowing -- away from fossil fuels and toward cleaner, more affordable sources of energy that cost less and have multiple benefits (eg, energy security, reduced prices, and creation of new jobs). It also reflects the broad view that Thai policymakers have taken of how to address climate change, prioritising the concept of the bio-circular green economy (BCG) as an integrative framework for promoting economic development in the agricultural, energy, and manufacturing sectors.
Conceptually, BCG involves the balancing of three pillars: the production of renewable biological resources and the conversion of these resources into value-added products (bio); the re-use and recycling of resources (circular); and keeping the economy, society, and environment in balance (green). Applying the BCG model as an organising principle for Thailand's economic development in the agriculture, energy, and manufacturing sectors suggests Thailand prefers a more integrated approach to energy and climate. Rather than focusing on a single-minded strategy to achieve "net zero", which focuses exclusively on the decarbonisation of the energy sector as the primary goal, the BCG model recognises the importance of a broader economic framework for development that puts people and jobs at the centre.
Officials from Thailand's Ministry of Energy and other agencies recently held working meetings with experts from the Asian Development Bank (ADB) to discuss the implications of applying the BCG framework to the energy sector and to climate action. The discussions identified a number of opportunities including:
Development of large amounts of cheap renewable energy sources, which could be generated by offshore wind and floating solar farms to produce hydrogen, which can be an important form of energy storage as well as an energy resource;
New business models for applying clean energy technologies, such as renewable energy technologies and battery energy storage systems capable of peer-to-peer (P2P) energy trading, net metering and net billing in community-based power plants;
Continued utilisation of biomass as an energy feedstock, drawing from the country's strength in the agricultural sector while managing problems that have occurred with the management and siting of biomass power plants for local communities;
Campaigns and educational promotion activities among Thai farmers, complemented by schemes to identify ways to monetise their agricultural crop wastes that do not involve in-field burning, and can increase farmer incomes while solving a significant environmental problem;
Digitalisation in waste management, with the aim to optimise waste management and develop business models for monetising the value of municipal waste; and
Continued development of new, voluntary carbon markets, as envisioned under the Paris Climate Agreement, which could provide opportunities for the monetisation of agricultural waste such from corn, rice, and sugar farming.
Colleagues with whom I have worked on clean energy issues in Indonesia, the Philippines, Thailand, and Vietnam as part of the Clean, Affordable and Secure Energy (CASE) programme, recently launched a report entitled "Beyond Net Zero", which similarly makes the case for countries to develop balanced and complementary climate plans that first and foremost meet their national development needs, while also accelerating the decarbonisation of their energy sectors and economies.
As one of the report's authors, Fabby Tumiwa, of the Institute for Essential Services Reform, put it: "If the public cannot identify with the development goals arising from their government's climate strategies, the political consensus required to make increasingly difficult decisions will be hard to achieve, or if realised, it will be hard to sustain." In this context, the BCG framework truly provides a powerful organising framework for Thailand, and the Thai government plans to make this an important issue as it assumes the mantle of Asia-Pacific Economic Cooperation (Apec) leadership in December.
The prominence of BCG is a welcome development, and yet there is much to do. In a government that is often seen as driving initiatives with a top-down approach, it will be important to build societal buy-in to the BCG framework through a broad consultation process, so that the various stakeholders, including small- and medium-sized enterprises (SMEs), farmers, and others can see the benefits in terms of technological and business development and development of "green jobs".
There is also a compelling need for Thai policymakers to build trust with the public in the formulation of energy policy in areas such as electricity tariffs, energy pricing, and more open access to the grid for electricity generators. This extends to the need to provide clearer and more transparent information to the public about the performance of the power sector, to develop practical ways to manage development and modernisation of the power grid, and to monitor and report transparently on the economic performance of the electric utilities, while promoting more competition and open access for producers of distributed energy such as solar, wind, biomass, and waste-to-energy.
Senior Thai officials often talk about the vision of a "prosumer" model of energy development, in which any homeowner or small business owner will have the option to produce electricity and sell it to the grid. This vision is currently blocked by regulatory barriers. Perhaps the BCG model could provide a lever to unlock this potential in the coming years and provide more real power to the people. Only then will we begin to see the necessary changes take hold in business operations and everyday lives, making the longer-term goals of "net zero" more than abstract goals.
Peter du Pont is a resident of Bangkok and Managing Partner of Asia Clean Energy Partners, a regional consultancy that supports the acceleration of clean energy deployment with a focus on markets in Asia and the Pacific.