When Thailand joined the Clean Economy Agreement under the Indo-Pacific Economic Framework for Prosperity (IPEF) on June 6 this year, many wondered how the country could benefit from tackling the climate crisis.
Significantly. That is the answer.
Truth be told, Thailand is one of 14 country members of the IPEF. This framework is a multilateral economic cooperation platform launched by the United States in 2022, with goals to strengthen economic ties across the Indo-Pacific region. This trade agreement addresses four areas: fair trade, supply chains, clean economy, and fair economy.
The Clean Economy Agreement, dubbed "IPEF Pillar 3", focuses on building environmentally friendly economies through clean energy and green technology. The third pillar also aims to boost climate-friendly efforts at the regional level, align markets with common policies and standards, and encourage the use of low- and zero-emission products and services.
With global markets increasingly focused on fighting climate change and promoting sustainability, Thailand's involvement in the IPEF and access to clean energy technologies will help the country stay competitive in the international market.
Research prepared by the collaboration of the National Research Council of Thailand and the Thailand Development Research Institute (TDRI) shows huge opportunities for Thailand if it adopts IPEF's third pillar.
First and foremost, IPEF support will help Thailand's transition towards a green economy, with wider access to climate-friendly energy and technologies to reduce greenhouse gas emissions and improve resilience to climate change.
The collaboration will also help Thailand improve its capacity to develop know-how in solar panel and battery production, methane leak detection and reduction, and hydrogen fuel, which is a key future energy source.
Although the production costs for hydrogen are still high, technological support from IPEF members and effective carbon tax mechanisms could drive sustainable growth in its use.
Meanwhile, developing the Asean power grid is another important step towards enhancing energy supply resilience, which is in line with Thailand's green economy goals.
The European Union has already implemented the Carbon Border Adjustment Mechanism (CBAM), which directly affects Thai exports with high emissions such as cement, plastic, and steel. They then want to reduce emissions in their supply chains and explore the use of biofuels in the transport sector.
Joining the IPEF's Clean Economy cooperation and receiving clean technology support will, therefore, help accelerate changes in the operations of Thailand's industrial and transportation sectors, enabling a more effective shift to a green economy and avoiding trade barriers.
To mitigate global warming, Thailand is facing challenges in managing land, water, and natural resources sustainably. Innovations like rice field adjustments and using drones to spray fertilisers can help reduce emissions. Support from IPEF members then offers Thailand the opportunity to learn and apply advanced technologies in agriculture and natural resource management more efficiently.
Meanwhile, Thailand urgently needs to reduce greenhouse gas emissions, especially in the energy sector, which still heavily relies on fossil fuels.
To address the challenge, the government and private sector have launched the Thailand CCUS Consortium to develop carbon capture, utilisation, and storage (CCUS) technologies, which are highly effective in reducing emissions. Under this programme, they have developed projects like the "Thailand CCS Hub" and "Eastern Thailand CCS Hub" to reduce emissions.
As IPEF members, Thailand's partnership with Japan on geological surveys further improves the country's carbon capture and storage (CCS) technologies. It has also led to other collaborations between the Thai energy industry and Japanese corporations, such as INPEX and JGC Group.
Furthermore, being part of the IPEF's Clean Economy Agreement can help accelerate Thailand's use of existing green procurement programmes, resulting in the rise of eco-friendly businesses.
In this respect, it must be said that the Pollution Control Department (PCD) under Thailand's Ministry of Natural Resources and Environment has introduced a green procurement policy for 2022 to 2027. This policy is touted as a springboard towards sustainable resource use. Even though the policy is voluntary, it has already created positive incentives for the private sector.
The Third Pillar also supports businesses in up-skilling and re-skilling their personnel to work in green industries.
Under the Clean Economy Agreement, Thailand has access to green jobs training that will help upskill workers in traditional industries to transition into new roles.
Indeed, Thailand's Labour Ministry already has a five-year action plan to upskill the workforce. This scheme resonates with the International Labour Organization's (ILO) recommendations, emphasising a fair transition that helps workers adapt while ensuring decent working conditions.
Job training alone is not enough. Clear economic policies and effective organisational management are crucial to creating a sustainable and supportive environment for workers in all sectors.
The government's role is crucial to fully benefiting from IPEF's Clean Economy Agreement. It needs to take strong action to develop the right policies and technologies.
Equally important -- if not even more -- is that the government must set green product standards, invest in eco-friendly infrastructure, and reform the energy sector to end monopolies and open up the energy industry.
Joining IPEF's Clean Economy Agreement is a great opportunity for Thailand to strengthen its green energy and economy. However, success will require ongoing efforts and strong support from all sectors, especially the government.
Areeporn Asawinpongphan, PhD, is a Research Fellow at the Thailand Development Research Institute.