Thailand is ranked ninth in the extreme risk category of countries that are most vulnerable to the effects of climate change over the next 30 years, according to Germanwatch, an independent development and environmental organization. Thailand is very vulnerable to the effects of climate change. The nation is threatened by increasing sea levels, which pose a threat to Bangkok, the nation's capital, which is on average 1.5 meters above sea level. About six percent of Thailand's GDP and 30 percent of all jobs are in the agricultural industry. Hence, extreme and unpredictable weather patterns, such as drought and flooding, are crucial, especially for the rural populace.
Thailand's carbon dioxide (CO2) emissions increased by 0.8 percent yearly in 2011–21, which is higher than the worldwide average of 0.6 percent but still less than the Asia–Pacific average of 1.8 percent, according to statistics from BP Statistical Review of World Energy 2022. The International Energy Agency predicts that CO2 emissions will reach their peak before 2030. Thailand benefits from having a large portion of the service sector, which produces less pollution than industry. Nonetheless, 36 percent of Thailand's CO2 emissions were from power generation, followed by industry (30 percent) and transportation (28 percent). This emphasizes the need for Thailand to diversify its energy sources for its manufacturing sector by avoiding fossil fuel-based power and increasing its fleet of low-carbon transportation.
On the bright side, the sense of urgency to change the scenario for the better is taking shape in the form of governmental policies. To start with, the Excise Department recently plans to impose a carbon tax on major major economic sectors such as the energy, transportation and industrial sectors to achieve carbon neutrality goals by 2050 and net-zero greenhouse gases by 2063, while also trimming costs around imported fuel. What this tax could is:
New Carbon Tax
It could encourage companies to deploy cleaner or renewable energy to lessen the percentage of carbon emissions by about 30 percent. When we look at each sector, the energy sector contributes about 35 percent of carbon emissions since most electricity is produced by burning oil, natural gas and coal. Whereas the transportation sector contributes about 32 percent, the industrial sector about 27 percent and the households ending up at six percent. Additionally, if Thailand does not reduce its carbon emissions soon, it is bound to fall into the rising costs of importing fuel.
On a side note, other countries including the European Union, China and the US are also studying carbon taxes. Furthermore, when Europe implements its carbon border adjustment mechanism on seven commodities imported into the bloc in October 2023, exporting nations will need to lower their CO2 emissions. Companies will be required to declare their CO2 gas emissions annually, including those from imported items, starting on May 31, 2026, under the method. More taxes will be assessed if you don't comply.
Coming to the transportation sector, to help it achieve its environmental objectives, Thailand is encouraging electric cars, increased use of renewable energy sources, and the carbon tax. According to industry analysts, the Climate Change Act should include action plans for lowering CO2 gas emissions in the energy, transportation, and industrial sectors in addition to the country's carbon tax and carbon-credit trading initiatives.
She mentioned the 28th Conference of the Parties to the UN Framework Convention on Climate Change, which will take place in November in Dubai, and added that this will benefit Thailand in preparing for an upcoming climate change conference.
For now, certain details of the tax implying its date of implementation or when its study, which is currently ongoing, will be completed remain unanswered. For that matter, the Excise Department has formed a working committee to investigate the potential expansion of carbon-based taxes to include more expansive international definitions of carbon tax, such as the tax levied on the carbon emissions of manufacturing processes. In the beginning, the Excise Department intends to adopt a carbon tax as part of the excise tax, much as the sugar tax that was previously successfully implemented.
How is the Current Carbon Tax Performing
Currently, the Excise Department in Thailand levies an excise fee on products like oil, cars, and motorcycles that harm the environment. The rate of the tax varies depending on the amount of carbon emissions these goods produce. However, even though taxes are only levied on carbon-intensive raw materials and finished goods that are harmful to the environment and not on manufacturing processes that could also result in significant amounts of carbon emissions, the existing excise tax measures might not fully reflect the concept of a carbon tax.
To continue reducing carbon emissions, the government is working on a six-point plan that is believed to help businesses utilize resources efficiently and become sustainable.
Six Ways How the Six Point Plan is Slated to Work
Incorporating net zero and carbon neutrality goals into national policies for various industries, including transportation, business, and agriculture. In order to implement revolutionary wet and dry rice farming technologies that would enable farmers to cultivate rice all year long, including during the drought season, Thailand is collaborating with Germany.
CCUS (carbon capture, utilisation, and storage) technology implementation throughout several industries. The Natural Resources and Environment ministry is now negotiating a decrease in the costs associated with technology adoption and transfer for business owners.
Developing trade and investment regulations that support green or environmentally friendly firms. The Board of Investment (BOI) is in charge of offering tax advantages and other privileges to entice green investments, and relevant authorities will hasten the registration of environmentally friendly products to increase their consumption and export.
Establishing a system for the Natural Resources and Environmental Policy and Planning Office to operate as the central organization for the usage of carbon credits both domestically and internationally. In order to boost carbon credit trading in the private sector and link clean energy trading platforms with the carbon credit market, the office will also collaborate with the Federation of Thai Industries (FTI).
Increasing the size of forests to increase carbon dioxide absorption.
Implementation of the ministry's proposed Climate Change Act.