Thailand faces significant economic and social risks from climate change, according to a new Country Climate and Development Report. The report finds that Thailand's economic growth has slowed in recent years, averaging 2.6 percent annually since 2010, which is below the rate needed for the country to reach high-income status by 2037.
The report highlights that climate change compounds existing development challenges in Thailand, particularly affecting the most vulnerable populations. Physical impacts such as flooding, coastal erosion, water shortages, and heat stress are having a growing effect on agriculture, industry, and tourism.
According to the findings, without decisive adaptation efforts, climate change could reduce Thailand’s GDP by 7–14 percent by 2050. The report notes that adaptation investments can significantly lessen but not entirely eliminate these adverse effects. Investments in flood mitigation, coastal protection, water security, and cooling could increase annual GDP by 4-5 percent by 2050 compared to a business-as-usual scenario. The estimated cost of these investments is just over 1 percent of GDP per year.
The report emphasizes the importance of strengthening social protection systems to help vulnerable groups cope with disasters related to climate change. It recommends additional spending on social programs and better targeting of support for those affected.
On emissions reduction targets, the report states: “Carbon pricing is important but insufficient on its own to meet Thailand’s objectives of carbon neutrality by 2050 and net-zero emissions by 2065. Without complementary reforms and investments, emissions reduction will not happen fast enough to meet these targets, and carbon pricing itself will be less effective.”
To address these challenges, recommendations include reforming the power sector market; investing in battery storage and grid modernization; expanding electric vehicle infrastructure; mandating energy efficiency standards for industry; refocusing agricultural subsidies; strengthening farmer education; investing in reforestation; and improving land management practices.
The report also points out opportunities for green growth. Thailand already plays a leading role in eco-friendly air conditioner exports and supplies four percent of global solar PV exports. Expanding exports of electric vehicles (EVs), solar PVs, and energy-efficient appliances could add two to three percent to GDP by 2030.
To support this growth potential, recommended measures include removing market-entry barriers for businesses involved in green technologies; ensuring foreign direct investment builds domestic skills; increasing public support for innovation; prioritizing high-tech skill development through private sector collaboration; and raising basic education standards.
Financing adaptation and mitigation efforts will require an estimated USD 219 billion over the next 25 years—equivalent to about 2.4 percent of cumulative GDP—with most adaptation spending expected from the public sector while private capital would fund much of mitigation efforts. Carbon pricing could generate revenues close to one percent of GDP annually. Additional funding could come from revenue reforms such as changes to VAT or property tax policies.
To mobilize private capital for green finance initiatives like bonds or loans—and strengthen sustainable finance infrastructure—the report suggests incentivizing financial institutions while developing market mechanisms for carbon credit trading.
Five priority areas are identified: flood mitigation (including implementation of Chao Phraya “Nine Plans”), water security improvements especially in key regions like EEC through infrastructure upgrades, accelerating renewable energy adoption via power sector reform and grid modernization investments, increasing social protection benefits with improved program targeting/integration such as establishing unified registries for disaster response programs like SWC benefits distribution—and expediting approval/implementation of a transparent Climate Change Act framework aimed at clarifying carbon pricing policy for private investors.
“Carbon pricing is important but insufficient on its own to meet Thailand’s objectives of carbon neutrality by 2050 and net-zero emissions by 2065. Without complementary reforms and investments, emissions reduction will not happen fast enough to meet these targets, and carbon pricing itself will be less effective.”
Thailand's transition toward low-carbon development aligns with growing international demand for environmentally friendly goods while aiming to protect its economic competitiveness amid shifting global markets.