Thailand will start the process of developing the foundations for a national carbon price using World Bank funds, a climate official said, a process which will culminate in a mandatory emissions trading scheme.
The South East Asian nation recently received a $3 million grant from the World Bank’s Partnership for Market Readiness (PMR), which helps emerging countries develop market-based mechanisms to combat climate change.
“The World Bank Group’s support is critical to starting the process of introducing carbon pricing and other innovative instruments in Thailand,” Prasertsuk Chamornmarn, executive director of the Thailand Greenhouse Gas Management Organization (TGO), said in a statement.
Thailand has estimated its greenhouse gas emissions would soar to 555 million tonnes of CO2e in 2030 under a business-as-usual scenario, up from 230 million tonnes in 2000.
Under the Paris Agreement, it has pledged to keep its 2030 emissions at 20% below BAU levels, or 25% if it receives international financial support.
Thailand has not set a date for when a domestic ETS will be launched, although documents on the PMR website suggest that 2020 would be the earliest possible start date.
The country plans to use the $3 million grant to develop a legal framework for domestic emissions trading, according to the documents.
The funds will also contribute towards developing two mechanisms that would provide Thailand with valuable experience in designing and operating market-based mechanisms: an energy performance certificate scheme (EPC) and a Low Carbon City (LCC) programme.
Under the EPC, energy-intensive industry and commercial buildings will be given energy intensity targets as part of Thailand’s efforts to reduce the amount of energy it consumes per unit of GDP.
A demonstration phase of the EPC will run from 2017-2019, and experiences from the scheme will be taken into account when officials draw up the national ETS.
The LCC, meanwhile, will allow provinces, cities, and communities to initiate projects that cut GHG emissions. The projects will initially be able to apply for offset credits under Thailand’s voluntary carbon market, and later on they can generate units eligible in the mandatory ETS.
The LCC programme is expected to go into operation next year.
The PMR is one of several programmes the World Bank has launched to help build new carbon markets around the world.
Seventeen nations have joined as “implementing country participants” including China, Brazil, India, Mexico, and South Africa.
In October last year, Vietnam’s prime minister approved a PMR-funded programme that includes setting up a cap-and-trade system in the country’s steel sector.
By Stian Reklev – firstname.lastname@example.org