Amid the climate crisis and global economic stagnation, Thailand still can grow sustainably if it pursues a new economic pathway through green growth.
The development model which destroys natural resources for runaway growth without concerns for the environment no longer works, said TDRI researchers Kannika Thampanishvong and Charika Channuntapipat
Climate change is turning the planet upside down with worldwide natural disasters and conflicts from natural resources wars, forcing businesses to change their ways to cope with new risks. Environmental protection will become an important part of international trade rules.
Thailand has no choice. “Sustainable development and green growth is the way forward,” they pointed out during their talk “A New Paradigm toward Green Growth” at the 2021 annual conference of the Thailand Development Research Institute (TDRI).
“For the Thai economy to grow, Thailand’s economy can no longer overlook the climate crisis and environmental concerns,” they stressed.
Global warming threats
According to the Intergovernmental Panel on Climate Change (IPCC), the temperature would rise by almost 5 degree Celsius by the end of this century under the projected highest emission scenario.
Urging the government to look ahead, they pointed out that Thailand and Southeast Asia will continue to face disastrous storms as well as severe droughts and floods as the planet’s temperature keeps rising.
Actually, according to the Global Climate Risk Index, Thailand is among the top 10 countries that suffer climate change impacts the most, both in casualties and economic loss.
Even when the temperature rises only 3.2 degree Celsius, the Thai economy in 2050 could shrink by nearly 44%, according to the Swiss Re Institute.
Trade challenge
Thai exports will also soon face new barriers from new international trade rules, they warned.
As part of the European Green Deal, the European Union is planning to put a levy on carbon-intensive imports to encourage cleaner industrial production through the Carbon Border Adjustment Mechanism (CBAM).
This measure will directly affect the Thai export industry, they said. Although the measure will first apply to the products that release a large amount of greenhouse gas such as cement, aluminium, iron, fertilizer, and coal, other industries will soon have to clean up their production to enter the European market.
Technology VS bureaucracy
At the 26th UN Climate Change Conference (COP26), Thailand has pledged to achieve carbon neutrality by 2065. To succeed, however, all sectors — particularly the business — must reduce the greenhouse gas through green growth which benefits both the economy and the environment.
Under green growth, technology is the key to efficiency, innovation, and new business opportunities, they pointed out.
Many corporations in Thailand are already engaging in green business opportunities, For example, SPCG, BanpuNEXT, and B.GRIMM Power have invested in clean energy production businesses. PTT and Foxconn are also working together for their electric car industry while Gracz is one of the leaders in the environmentally-friendly packaging sector. But bureaucratic red tape and outdated rules and regulations remain an obstacle to green growth.
For the clean energy sector, the government needs to overhaul outdated rules to facilitate power trading as well as modernize and decentralise the grid system. The government must also invest more in research and development to reduce costs and increase public access to renewable energy, they urged.
For the electric car manufacturing sector, the government should show more policy commitment to support electric cars, provide sufficient car charging stations and effective disposal of used batteries.
For the packaging industry, since the environmentally-friendly packages are relatively expensive compared to conventional ones, the government should implement a clear measure to ban the conventional packages that are harmful to health and environment. This will also help raise public awareness of the environmentally-friendly packages.
Toward green growth, many businesses are now using technology to increase efficiency in water and energy use, they reported.
For example, Betagro, an agro-industry group, has reduced energy use by 30-50% by turning greenhouse gas into electricity. Using treated water has saved the company 19% of water use and improving machine efficiency has saved it over 300,000 megajoules.
In green tourism, Sivatel Hotel, for example, is well-known for its effective waste management system starting from menu designing to reducing food waste. The use of glass bottles has replaced the use of 200,000 plastic bottles a year. The hotel also uses LED lights and split air conditioners to save energy.
Meanwhile, an increasing number of buildings have opted for solar energy and LED lights to save energy. The SCG 100th Year Building, for example, has saved over 250,000 kilowatt-hours per year by doing so. Recycling and using treated water has saved its water use by 74%.
Green building also has a high business prospect, they reported. According to the survey of DDproperty’s Thailand Consumer Sentiment Study in 2021, more than 93% of consumers said they want to stay in sustainable buildings.
Challenges
Despite available technology, it is still out of reach for most small businesses, they pointed out.
In husbandry, for example, small-scale farmers cannot access the know-how to be more efficient in energy use. The government, therefore, should invest in research and development to help them reduce greenhouse gas and increase energy efficiency without affecting their productivity. The government should also provide sufficient support for them to gain access to credit and know-how.
The green building movement, meanwhile, lacks support from the government. Besides the red tape, acquiring green building certifications can be very costly.
To support green business, the government should use tax measures to help reduce costs. It should also use a “green procurement” policy by using green hotels for their meetings, for example.
Next steps
Technology will help Thailand increase total factor productivity (TFP). But cooperation from all sectors is necessary to move Thailand forward, they stressed.
The TDRI researchers also outlined what needs to be done to make Thailand grow with green growth.
What the government should do:
Use green procurement to support environmentally-friendly goods and services. Overhaul outdated rules and regulations, particularly on power selling and buying. Keep all sectors abreast with climate change transition and new business opportunities. Collaborate with the business and local communities to use environmentally-friendly technology and innovations to drive the economy. And use economic incentives and other measures to help businesses big and small to access environmentally-friendly technology.
What the business should do:
Reduce the greenhouse gas emissions from their operations. Pledge and set concrete goals with short and long-term plans to achieve the goals. Proceed to fulfil the pledge by adjusting business policies, using new technology, and changing the business model to be environmentally friendly. And publish what they have done to reduce greenhouse gases to show transparency and responsibility.
The financial sector can contribute to green growth through green credits and green bonds to make financing available to all levels of businesses so they can access green technology.
What the public should do: Change their consumption behaviours to reduce greenhouse gases and carbon footprints. Support the goods and services that are environmentally friendly.
Through a concerted commitment to green growth, they said, the Thai economy will sustainably grow for the well-being of its people and the environment.