Unlocking Thailand’s Climate Potential: ADB Calls for Essential Reforms to Boost Green Investment

A recent report from the Asian Development Bank (ADB), featuring insights from experts like Karan Chouksey and Sarinee Achavanuntakul, dives into Thailand’s climate finance from 2018 to 2024. The document analyzes over 660 projects, pulling data from various sources, including corporate sustainability reports and government budgets. This marks the first time Thailand has comprehensively estimated climate finance linked to its Nationally Determined Contributions (NDCs).

Thailand raised about ฿1.6 trillion ($47.1 billion) for climate mitigation during this period. However, most of this funding went to energy and transport—63.5% in total. Almost half, or ฿761 billion ($22.4 billion), was funneled into the energy sector. Key investments include solar photovoltaic systems, green hydrogen developments, and electric infrastructure. For instance, solar projects alone accounted for ฿276.4 billion ($8 billion). On the downside, crucial areas like water management and sustainable agriculture got less than 1% of the funds, putting the country’s long-term stability at risk, especially considering rising sea levels and extreme weather.

The corporate sector led funding efforts, contributing 44.8% of the total. This was supported by a shift in corporate financing practices influenced by emerging environmental standards and frameworks in Thailand. However, despite this progress, Thailand’s climate financing is still far from its goals. ADB estimates show the nation needs to secure between $22 billion to $28 billion annually from 2030 to 2050 to achieve carbon neutrality by 2050 and net-zero emissions by 2065. Currently, the country is investing around $8 billion yearly, leaving a daunting gap of up to $17 billion each year.

The energy sector still requires almost twice its current annual funding. The transport sector alone needs its investment to grow from $2.5 billion to around $6 billion annually. Agriculture faces a potential shortfall of up to $2.3 billion each year. Other sectors like waste management and forestry also reflect significant funding deficits.

One of the main hurdles is a fragmented governance system. Different ministries handle various responsibilities, leading to ineffective collaboration. Without a unified approach, funding decisions tend to prioritize short-term benefits, missing out on long-term climate resilience.

Additionally, a lack of transparency is a major issue. There’s no centralized platform that tracks public and private investments. This obscurity hampers decision-making and accountability.

To tackle these problems, the ADB suggests five key strategies. First, introducing blended finance models could help reduce risks for climate projects. Second, expanding the green capital market through instruments like green bonds could attract more investments. Third, strengthening institutions—like giving more authority to the Department of Climate Change and Environment—can facilitate better coordination among ministries. Fourth, there should be clear frameworks for project selection that focus on long-term climate impact. Lastly, establishing a national climate finance repository would enhance transparency and aid strategic planning.

While Thailand has made headway in climate finance, the existing trajectory isn’t enough for its long-term ambitions. With a yearly financing gap exceeding $10 billion, addressing these issues is crucial for the country’s climate resilience. The path ahead requires not just money but smarter strategies, ensuring that investments align with national goals and genuinely promote sustainability.

For more detailed insights on climate finance challenges, you can check the ADB report here.

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Asian Development Bank, UNFCCC, Thailand, wastewater management, EU’s Carbon Border Adjustment Mechanism, net-zero emissions, ADB