Thailand’s Climate Ambitions Threatened by Significant Funding Shortfall, ADB Warns – What This Means for Our Planet

Thailand is at a crucial point in its climate finance journey. Recent findings from the Asian Development Bank (ADB), with insights from organizations like the UN and the World Bank, shed light on how Thailand is managing its climate finance. From 2018 to 2024, the country gathered around B1.6 trillion (about $47 billion) for climate mitigation efforts. Most of this funding went to the energy and transport sectors, which accounted for almost two-thirds of the total. The energy sector received 48% of the funds, focusing on renewable energy projects and improving energy efficiency. Meanwhile, the transport sector took in 16%, heavily investing in rail and electric vehicles.

However, there’s a significant downside. Adaptation efforts, like managing water resources and enhancing disaster resilience, received less than 1% of this funding. This is worrying for a country often affected by floods and droughts.

Who’s Behind the Funding?

Corporate sponsors and banks are leading Thailand’s climate finance, contributing over 60% of total funds. Corporations alone accounted for nearly B717 billion ($21.1 billion), while commercial banks brought in B324 billion ($9.5 billion). The government and state enterprises contributed around B508 billion, while international finance sources added only about 3%. Notable investments included B276.4 billion ($8 billion) for solar projects and B232 billion ($6.8 billion) for green hydrogen.

The Funding Gap

Despite these efforts, there’s a major issue. The ADB points out that current climate finance only meets about half of what’s needed for Thailand’s goals from 2030 to 2050. The country requires between $22 billion and $28 billion each year but faces a shortfall of up to $17 billion. For example, the energy sector currently gets $4 billion annually but needs $8 billion. Similarly, transport needs to jump from $2.5 billion to $6 billion. If investments don’t increase, Thailand’s climate commitments could be at risk.

A Roadmap to Close the Gap

The ADB recommends a five-point strategy to bridge this funding divide. First, use innovative financing methods to attract private investments for large projects. Second, boost green capital markets through tools like green bonds. Third, strengthen institutional capacity to manage funds effectively. Fourth, establish clear guidelines for selecting impactful projects. Finally, create a national climate finance repository for better tracking of all investments.

Moving Toward a Unified Strategy

While Thailand has made strides, it still faces challenges like fragmented governance and the lack of a cohesive financing strategy. To close the financing gap of over $10 billion, strong political will and effective planning are crucial. Enhancing the role of the Department of Climate Change and Environment, aligning funding mechanisms with broader climate goals, and improving finance tracking are all key steps. If followed through, these actions could propel Thailand toward a sustainable, climate-resilient future that aligns with global standards while supporting the economy.

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Asian Development Bank, ADB, International Monetary Fund, World Bank, Thailand, climate mitigation investments, European Union’s Carbon Border Adjustment Mechanism, NDC