CO2 Reduction in Transport Sector in Thailand: Some Insights
Ram M. Shrestha and Shreekar Pradhan
Asian Institute of Technology

Abstract: In this presentation, an attempt is made to highlight the importance ofhaving a fundamental shift in planning and policies for public infrastructuredevelopment in the transport sector and alternative energy resources development ina developing country like Thailand if a substantial reduction in CO2 emission is to beachieved. It is argued that climate change related economic instruments like carbon
tax may not achieve their full potential to reduce greenhouse gases in the absence ofsuch shift in plans and policies. Results from a study on Thailand are presented tothat end.

Thailand is the second largest economy in the ASEAN region. It is also the second
largest in CO2 emission in the region. Thailand’s total CO2 emission was 206 million
tons in 2004, which was 2.62 times the corresponding figure in 1990. Thailand’s sharein the global total CO2 emission increased from 0.4% in year 1990 to 0.8% in 2004.
The total CO2 emission increased by 162% during 1990-2004 in the country, whichshows a much higher growth rate than that of the global CO2 emission (28% during
the period). The annual growth rate of the country’s CO2 emission per capita during
1990-2004 was 5.99%, which is substantially higher than that of OECD (0.32%) andAsia excluding China (3.06%). The transport sector accounts for 29.5% of the total
CO2 emission in Thailand due to its heavy reliance on fossil fuels. The figure is not
only substantially higher than that of major emerging developing countries like China(6.3%) and India (8.8%) but is also higher than the corresponding figures of thedeveloped countries (27.1% in OECD and 20.8% in Japan). The transport sector in
Thailand is predominantly road based. This is evident from the fact that at present thetotal length of highway is 64,000 km and the total length of railway is less than 4,070
km. The transport sector is heavily based on fossil fuels and accounts for more than
one third of final energy demand.
The Thai Government has some environment-friendly strategies and plans in thetransport sector, which include substitution of existing diesel-run trains with electrictrains, developing mass rapid transit to substitute private vehicles (813 km longdouble track trains) and intercity trains to reduce private vehicles within city area. The
government has developed a very ambitious plan for biofuels promotion in thetransport sector, which aims at substituting 10% of diesel use with bio-diesel by 2012.
This plan requires the utilization of 85 million liters of blended biodiesel per day andproduction of 8.5 million liter per day of pure biodiesel production by 2012. The
production will be based on palm oil and Jatropha. Also the government has aGasohol Strategic Plan which would increase the utilization of E10 Gasohol from one
million liters per day in 2006 to 3 million liters of ethanol per day by 2011.
Our study on CO2 reduction potential in Thailand shows that increasing the use of
biofuels in the base case during the planning horizon of 2000-2050 (i.e., increasing
the use of biodiesel from 500 ktoe in 2005 to 30,000 ktoe by 2020 and to 40,000 ktoe

by 2050 and similarly increasing the use of Gasohol from 500 ktoe in 2005 to 10,000
ktoe in 2030 and to 20,000 ktoe by 2050) would reduce the cumulative CO2 emission
during the period by 0.8% from the total emission during the period in the absence ofbiofuels1. Also, it was found that increasing the availability of biofuels during 20202050 (i.e., biodiesel availability increasing from by 30,000 ktoe in 2020 to 80,000
ktoe in 2050 and Gasohol increasing from 10,000 ktoe in 2030 to 40,000 ktoe in2050) would reduce the cumulative CO2 emission during 2005-2050 by only 0.27%.
This demonstrates that without a massive biofuels production/procurement program,that is far bigger in scale than conceived presently, biofuels cannot contributesignificantly to total national CO2 emission reduction. On the other hand, a programfor a substantial increase in biofuels production would face the standard conflict ofhaving to use the agricultural land for fuel production instead of food production.
Our study (Shrestha et al., 2008) shows that if passenger travel demand based on cars,
vans and pickups is shifted to that based on electrified MRTS and railways by 10% in2015 with the shift increasing up to 30% by 2050, there would be a reduction in
cumulative CO2 emission during 2015-2050 by about 1.87% as compared to the CO2emission in the base case. This shows that shifting the passenger transport demandaway from the low occupancy road based personal transport system to MRTS andrailways would have a significantly large CO2 reduction potential.
How large could be the effect of carbon tax in reducing CO2 emission from a country
like Thailand? Our study shows that introducing a uniform (i.e., constant) tax of$100/tCO2 during 2013-2050 would reduce total CO2 emission by about 16.4% fromthat in the base case (i.e., without both carbon tax and modal shift to MRTS andrailways and with limited hydropower availability and with a limited nuclear power
generation capacity). If the carbon tax is applied along with the modal shift (as statedin the previous paragraph), the study shows that CO2 emission would fall byadditional 2.2% (i.e., the total emission would be reduced by about 18.6%). This
clearly shows that climate policy related economic instruments like carbon tax would
be more effective, when there is an option for investment in public transport systems
like MRTS and electric railways. This, however, requires a major shift in thegovernment’s policies and plans to favor the development of MRTS and railway
based public transport infrastructure.
Furthermore, the options of additional hydropower import (up to 93,040 GWh by2050) from neighboring countries, enhanced nuclear power generation capacity (up to40,000 MW by 2050) and the modal shift (as described earlier) are considered alongwith a carbon tax of US$100/tCO2, our study shows that the total CO2 emission would
be reduced by an additional 6.3% as compared to the case with the carbon tax alone.
In other words, the total emission in such a case (with modal shift, additionalhydropower import and nuclear power generation combined) would be about 22.7%
less than that in the base case. These results show that the carbon tax would be much
more effective in CO2 reduction if the wider options of investments in non-road
public transport infrastructures, regional hydropower development and nuclear power
generation are considered.

1The study used a bottom-up energy system model of Thailand, which we developed using the Asia
Pacific Integrated Assessment Model (AIM)/Enduse framework.

Thus, if a developing country like Thailand is to pursue a development path towards alow carbon economy, it is important to orient the public policies toward thosefavoring climate friendly infrastructure developments (e.g., electrified MRTS andrailways, regional transboundary hydropower development) besides programs toimprove energy efficiency and promote greater use of renewable energy.

Reference:Shrestha, R. M., S. Pradhan and M. Liyanage, 2008, Effects of Carbon Tax onGreenhouse Gas Mitigation in Thailand, Climate Policy (accepted for publication).