Thailand has come under the spotlight following a National Economic and Social Development (NESDB) warning that stronger action is needed to turn carbon reduction plans into reality. The country is facing growing regulatory pressure from export markets and foreign investors, requiring an active response.
NESDB Secretary General Danucha Pichayanan stressed the importance of regulations affecting Thailand's exports - the Carbon Border Tax Mechanism (CBAM) introduced by the European Union. CBAM will levy fees on exporters that do not adopt technologies to reduce carbon emissions that contribute to global warming and climate change. The CBAM transition period will begin this October, when importers of goods to the European Union will be required to report greenhouse gas emissions from the production of goods for import. However, fees for exceeding greenhouse gas emissions will only be charged from 2026, as outlined in a European Union CBAM document published last December.
NESDB's Danucha explained that CBAM is acting as a new trade barrier requiring Thai producers and exporters to meet higher standards.
Regarding foreign investment, Danucha noted that Thailand, as a major global manufacturing center, should prepare for the growing demand for clean energy in manufacturing processes and certain industries. New investors are increasingly looking for 100% renewable energy sources, so Thailand needs to phase out coal-fired power plants and increase the share of electricity produced from clean sources, he said.
Danucha also drew attention to the increasing occurrence of extreme natural events caused by global warming. He urged the government to allocate sufficient budget to mitigate the effects of floods and droughts, which have caused significant damage and loss of life in recent years. Climate change is estimated to have cost Thailand about 0.82% of GDP between 2000 and 2019, the ninth-highest cost globally. According to Danucha, in 2011 alone, flood damage reached 1 trillion baht.
The National Water Policy Committee has developed water management strategies jointly at the regional and local levels. Particular attention is paid to the construction of medium and small water sources, reservoirs for seasonal storage and regulation of water volume during the rainy season.
He also noted that the agricultural sector, which is particularly vulnerable to the effects of global warming and climate change, requires adaptation measures. This includes the introduction of water saving techniques, the use of drought-resistant crops, and the encouragement of agricultural companies that minimize their environmental impact.
Danucha noted that research and development of innovative solutions and technologies for climate resilience and sustainable agriculture continues.
