Thailand’s Net-zero Emissions by 2050: Analysis of Economy-wide Impacts
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Salony Rajbhandari , Pornphimol Winyuchakrit , Bijay Bahadur Pradhan , Achiraya Chaichaloempreecha ,22Piti Pita , Bundit Limmeechokchai
1National Institute for Environmental Studies, Japan
2Thammasat University Research Unit in Sustainable Energy & Built Environment, Thammasat Design School, Thailand
thThe 29 AIM International Workshop, National Institute for Environmental Studies, September 14-15, 2023
Introduction• A transition towards net-zero economy is a necessary challenge for Thailand.
• This study makes an effort to develop Thailand’s net-zero GHG emission 2050
pathways based on the country’s aspiration to contribute to the global efforts and bein line with the Paris Agreement.
• Such deep decarbonization targets are likely to increase the adoption of several
cleaner mitigation options and relevant policies that are expected to lessen the riskof energy burden and help to mitigate GHG emissions. However, the introduction ofsuch options and policies would bring changes in the existing national economy interms of the structure of production sectors, national welfare, carbon intensity,
carbon price and other economic impacts.
• This paper attempts to analyze the economy-wide consequences of achieving netzero GHG emissions in 2050 in the case of Thailand, one of the emerging economies
in Asia.

Methodology

Fig. 2 GHG Emissions/Removals by Sectors in theNZE2050 Scenario

Fig. 3 Variation in Carbon Price across the REF andNZE2050 Scenarios

Results• A multi-sector, recursive dynamic Asia-Pacific Integrated Model/Computable General
Equilibrium model, named “AIM/CGE” model of Thailand, has been constructed toanalyze the economy-wide implications of attaining net zero GHG emissions by 2050.
• A soft linkage has been established between the bottom-up AIM/Enduse model andthe top-down AIM/CGE model of Thailand to assess the macroeconomic aspects oftechnological innovation.
• A soft linkage between these models has been established using the sector-specific
GHG emissions and techno-specific data generated by the AIM/Enduse model as an
input to the AIM/CGE model.
• The AIM/CGE model includes the following blocks: production, government andhousehold income, and expenditure blocks, and a market block considering bothdomestic and international transactions.
• The AIM/CGE model of Thailand is constructed using the input-output table of 2015
to calibrate the model.
Scenarios

Description

Reference (REF)•Net-zero Emission 2050
(NZE2050)

Fig. 1 Net GHG Emissions in the REF and NZE2050 Scenarios••

Considers the GHG emissions in Thailand’s 2-degree
pathways as reported in the “Mid-century, Long term
Low Greenhouse Gas Emission Development Strategy(LT-LEDS)” of Thailand (MNRE 2021).
To achieve net-zero GHG emission in 2050, the LULUCF
sector is expected to sequester 120 MtCO2 from 2037to 2050. The capacity of carbon sequestration from theLULUCF sector is derived based on the forest and green
area targets as mentioned in the National Strategy(2018–2037) of Thailand (MNRE 2022).
The net GHG emissions are expected to reach the peaklevel of 285 MtCO2eq by 2025 in this scenario.

• Results show that a net-zero future is achievable by 2050 at the expense of GDP loss, requiring a drastic cut inhousehold consumption accompanied by welfare losses in Thailand.
• The cumulative welfare loss would be 6.8% in the NZE2050 scenario during 2020–2050. The steeper GHG
emission reductions towards 2050 would cause a larger welfare loss of about 34.8% in 2050. This is because thesharp decline in the GHG emissions towards 2050 would cause a drop in household consumption by 3.6% in
2030 to 42.4% in 2050 due to steep decline in the consumer spending for goods and services.
• Identified key pillars of decarbonization to achieve net-zero emissions include energy efficiency; electrification;
renewable energy development; hydrogen and hydrogen-based fuels; bioenergy; carbon capture, utilization,and storage (CCUS); and behavioral changes.
• The level of technology introduction and selections lead to a wide variation in the prices of carbon in both thescenarios. Higher carbon prices are required to attain the NZE2050 scenario during 2025–2050. The carbon
price would shoot up to reach US$ 734 per tCO2eq towards 2050 to attain net-zero emissions in the NZE2050
scenario.

Discussions and Conclusions• Results show that a net-zero future is achievable by 2050 at the expense of GDP loss, requiring a drastic cut inhousehold consumption accompanied by welfare losses in Thailand. Such a drastic cut would have severe
impact on the country’s economy in the longer run giving rise to unemployment, declining real income, andreduced production of goods and services.
• Results suggest that the pathway to net-zero emissions requires immediate and massive deployment of all theavailable and emerging clean and efficient energy technologies.
• The real-world implementation would pose significant challenges in terms of technological deployment anddissemination and would call for huge supply-side as well as demand-side investments.
• Research on negative carbon technologies and emerging options such as CCS, BECCS, and green hydrogen are
still inadequate in Thailand and need to be addressed before concluding that these are promising solutions toattain net-zero emissions in 2050.

Acknowledgements: The authors would like to thank the National Institute for Environmental Studies (NIES), Japan for the support of AIM modeling and the Institute for Global Environmental Strategies (IGES), Japanfor the support of data collection. The authors would like to express their sincere thanks to Professor Ram Manohar Shrestha for his valuable comments on modeling. The authors are grateful to the Thammasat
University Research Unit in Sustainable Energy and Built Environment, Thailand for the support. This study was also supported by Thammasat Postdoctoral Fellowship.

Fig. 4 Key Mitigation Actions in the Pathways toAchieve Net Zero Emissions in 2050