The world is boiling hot, not simply warming. Therefore, Thailand's response must extend beyond planting trees and carbon credit sales. To weather humanity's greatest crisis and safeguard our economy, we must transform into a low-carbon society and economy.
In 2023, we've witnessed record-breaking temperatures, escalating ocean warmth, rapid Arctic ice melt, devastating heatwaves in many countries, a parched Panama Canal, and the deadliest wildfires in Hawaii, among other global environmental catastrophes.
Thailand has been hard hit by the climate crisis, experiencing 146 extreme weather events costing over US$7.7 billion (273.5 billion baht) in losses over the past two decades. We are ranked ninth among nations most susceptible to climate change.
By 2050, Bangkok and the Central Plains face the risk of being underwater due to rising sea levels.
What lies ahead is clear: heatwaves, a rise in sea levels, wildfires, fierce storms, flash floods, and prolonged droughts will all become more common and deadlier.
The only way that humanity can survive the climate crisis is to mitigate carbon emissions and make structural adjustments to adapt to the changing climate.
The survival of all depends on global efforts. Every nation needs to pitch in. Thailand cannot be an exception, even though our share of global emissions is merely 1%. The transition to address climate change is critical to Thailand's economic and societal survival.
As international trade and investment increasingly demand low-carbon practices, Thailand, an export-dependent economy, faces mounting pressure to reduce carbon emissions.
For starters, the Paris Agreement targets keeping the rise in global temperatures well below 2°C above pre-industrial levels, pursuing efforts to limit global temperature rises to 1.5°C, and attaining net zero emissions by 2050.
Thailand's goal to achieve net zero emissions lags behind many nations, including neighbouring countries like Singapore, Malaysia, Vietnam, and Laos. This can seriously jeopardise our competitiveness in exports and in attracting foreign direct investment if the global pace of green transition accelerates.
Additionally, carbon prices will soon be imposed on carbon-intensive goods by the European Union's Carbon Border Adjustment Mechanism (CBAM). Other countries, including the United States, Canada, and Australia, may impose similar pricing in the near future.
International regulatory bodies, like the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO), are also pushing for reduced greenhouse gas emissions.
Most importantly, global industry leaders, trying to maintain their environmentally friendly image and consumer appeal, are enforcing strict standards on energy use and carbon emissions in their supply chains. Should Thai companies fail to comply, exports and investments will go elsewhere.
Likewise, local and international activists, conscious consumers, and the younger workforce are exerting pressure on companies to adopt eco-friendly practices.
Failing to implement low-carbon policies will render Thai businesses and the workforce ill-prepared for evolving needs, leaving Thailand trailing behind in the global economy.
The government should thus recognise that the long-term benefits of carbon reduction measures can outweigh the initial expenses. Efficient energy and water use cuts production costs for businesses. Cleaner air reduces healthcare expenses and saves people's lives, given the 31,000 annual deaths from air pollution and PM2.5.
Effectively mitigating carbon emissions will enhance Thailand's reputation as a green nation, attracting more foreign investment and strengthening the economy.
How can Thailand achieve its low-carbon goals and save the economy?
At present, the government lacks a comprehensive transition strategy. Policy debates mainly focus on piecemeal actions, such as tree planting and carbon credit sales.
To become a low-carbon economy, the government must reform the power sector, which produces 42% of the country's carbon emissions and revamp the transportation system, which produces another 22% of greenhouse gases. Public infrastructure improvements, support for low-carbon businesses, subsidising low-carbon technology development, and enforcing clean energy and green building rules are also essential.
Crucially, the government should implement carbon pricing to make polluters financially accountable for their greenhouse gas emissions, thereby giving them an incentive to reduce carbon emissions.
Carbon pricing facilitates a low-cost transition to a low-carbon economy. It also encourages green innovations and increases state revenue. Carbon pricing mechanisms include carbon taxes and emission caps. The latter permits businesses to sell their excess quota if their emissions fall below the cap.
Carbon taxes work better in Thailand, however, thanks to existing excise taxation collection mechanisms and their ease of implementation.
The carbon tax should apply to fossil fuel-based power plants, gasoline dealers, and specific imported goods used in heavy industries.
If the government were to impose a carbon tax starting at only 175 baht (around US$5) per tonne of carbon, gasoline prices would increase by 1.1%, diesel by 1.4%, and electricity by 1.8%. Thailand could reduce emissions by 1.2 million tonnes, or 0.4% and generate over 30 billion baht in additional tax revenue annually.
Tax revenue should be used to establish a fund to support emission reductions and assist vulnerable groups in adapting to an increasingly severe climate.
However, carbon pricing is not a panacea. Above all, the government must cease subsidising diesel.
The subsidy puts a strain on public health, impedes emission reduction in polluting industries, and burdens the Oil Fund, costing the country 7.4 billion baht now and growing.
Also essential are energy reform through market liberalisation, a low-carbon public transportation system, energy-efficient practices, and other systematic carbon mitigation policies.
Furthermore, the carbon credit market must be promoted to enable local communities to sell carbon credits and benefit from their forest conservation efforts.
Valuable lessons from carbon credit projects developed by the Mae Fah Luang Foundation, which have substantially reduced wildfires through forest conservation and carbon credit revenue, demonstrate the potential benefits.
Large-scale carbon reduction in Thai industries is not far-fetched, as exemplified by the "Saraburi Sandbox" project, a collaborative effort involving the cement industry, government bodies, academia, and professionals in Saraburi province.
Their commitment to achieving net zero emissions by 2050 offers a model for large-scale low-carbon zones that could be adopted.
To become a low-carbon economy, Thailand must establish new development objectives to create a green economy with high-paying green jobs. This involves introducing policy tools such as carbon taxes to hold polluters accountable and a bottom-up carbon credit market to support and expand carbon sinks.
Crucially, strong political will is required to reform and liberalise the power sector, embrace renewable energy, eliminate fossil fuel subsidies, and establish low-carbon emission standards for some energy-intensive products.
As climate change accelerates and grows more ominous, transitioning to a low-carbon economy on a boiling-hot planet is not a choice. It is a must for Thailand's survival.
This article is an edited keynote speech by Somkiat Tangkitvanich, PhD, president of Thailand Development Research Institute at the 2023 TDRI Annual Conference on 'Thailand's Transition to Low-Carbon Economy and Society' on Oct 31, 2023.