Title page

Contents

Abstract 4

Résumé 4

The green transition combines opportunities and challenges 8

Achieving a coherent policy mix and ensuring strong policy coordination 12

Carbon pricing should be the key element of Thailand's decarbonisation strategy 13

Aligning environmental regulations with international good practice 19

Achieving net zero will require specific strategies for each sector 22

Decarbonising the power sector by expanding renewable energy sources 22

Reducing transport emissions 26

Reducing emissions from agriculture 32

Raising energy efficiency presents scope for emission reductions 33

Energy productivity has improved over the recent years 33

Advancing electrification can help improve energy efficiency 36

The business sector could invest more to improve energy efficiency 37

Investing in adaptation to climate change 38

Fostering green innovation 39

Direct funding and tax incentives are supporting research and development 40

Towards a more circular economy 42

References 45

Table 1.1. Main findings and recommendations 44

Figure 1.1. Thailand is committed to significant emission reductions 8

Figure 1.2. CO₂ emissions from road transport have increased rapidly 9

Figure 1.3. Energy is necessary for economic growth 9

Figure 1.4. Thailand's coal dependence is lower than in peer countries 10

Figure 1.5. Lowering energy intensity has helped contain CO₂ emissions 11

Figure 1.6. Thailand's current effective carbon prices are low 15

Figure 1.7. Energy subsidies remain in place for oil 15

Figure 1.8. Achieving net zero targets will be challenging 17

Figure 1.9. Low-income households spend relatively less on transport 18

Figure 1.10. Environmental policies are less stringent than in OECD countries, China and India 21

Figure 1.11. Renewable sources have increased in power generation 24

Figure 1.12. Thailand needs to increase the use of renewable energy sources 24

Figure 1.13. Motorisation is advancing in Southeast Asian countries 28

Figure 1.14. Energy consumption by product type 30

Figure 1.15. The electric vehicle market is still nascent in Thailand 31

Figure 1.16. Rail freight transport accounts for a small share in in Thailand 32

Figure 1.17. Industry and transport account for a large share of energy consumption 34

Figure 1.18. Energy efficiency has improved in recent years 35

Figure 1.19. Electrification has rapidly increased in the emerging Asian economies 36

Figure 1.20. Business energy efficiency has been declining and electrification has been slow 38

Figure 1.21. Thailand has rapidly increased R&D expenditure 40

Figure 1.22. R&D tax incentives are weaker than in other economies 41

Boxes

Box 1.1. The OECD ENV-Linkages modelling framework 16

Box 1.2. OECD Environmental Policy Stringency Index 20

Box 1.3. GHG emission reductions in New Zealand's agriculture sector 33