Thailand is embarking on the establishment of a national carbon price, leading to the implementation of a mandatory emissions trading scheme, using financial assistance from the World Bank. The Southeast Asian nation has received a $3 million grant from the World Bank's Partnership for Market Readiness (PMR), aimed at supporting emerging countries in developing market-based mechanisms to combat climate change.
Prasertsuk Chamornmarn, Executive Director of the Thailand Greenhouse Gas Management Organization (TGO), emphasized the crucial role of the World Bank's support in initiating the introduction of carbon pricing and other innovative instruments in Thailand. The country's greenhouse gas emissions are projected to rise to 555 million tonnes of CO2e by 2030 under a business-as-usual scenario, compared to 230 million tonnes in 2000. However, Thailand has committed to reducing its 2030 emissions by 20% below business-as-usual levels, or by 25% with international financial assistance, in alignment with the goals of the Paris Agreement.
While Thailand has not yet specified a launch date for its domestic carbon market, documents on the PMR website suggest that the earliest possible start date would be 2020. The $3 million grant will be utilized to develop a legal framework for domestic emissions trading, along with the implementation of two mechanisms: an energy performance certificate scheme (EPC) and a Low Carbon City (LCC) program.
The EPC will establish energy intensity targets for energy-intensive industries and commercial buildings, contributing to Thailand's efforts to reduce energy consumption per unit of GDP. The demonstration phase of the EPC is scheduled to run from 2017 to 2019, with insights gained from the scheme informing the design of the national emissions trading scheme.
The LCC program will enable provinces, cities, and communities to initiate projects that reduce greenhouse gas emissions. Initially, these projects can apply for offset credits under Thailand's voluntary carbon market, and eventually, they can generate units eligible for the mandatory emissions trading scheme. The LCC program is expected to become operational in the coming year.
The World Bank's PMR is part of its commitment to assist in the development of carbon markets globally. Seventeen nations, including China, Brazil, India, Mexico, and South Africa, have participated as "implementing country participants." In Vietnam, a PMR-funded program has been approved to establish a cap-and-trade system within the country's steel sector.
