ADB Program Helps Boost Thailand’s Climate Resilience

Climate change affects Thailand’s economy for THB 83.8 billion or USD 2.32 billion annually. The country blames the changing climate on the accumulation of GHG gases that trigger severe weather events that impact human lives and the environment, causing substantial economic losses.

Floods are by far the most severe natural hazard facing Thailand in terms of economic and human impacts, with Thailand being cited as one of the ten most flood-affected countries in the world. According to the UNISDR, the average annual loss associated with flooding in Thailand is approximately US$2.6 billion.

Nearly every region in Thailand experiences increased rainfalls each year, resulting in sudden floods, various natural disasters such as frequent flash floods, and the risk of further disasters like tsunamis. Warm and rising sea levels threaten coastal communities, particularly in the northeastern and southern regions, which are more vulnerable to droughts than other areas.

Over the past few years, 23% of coastal areas have faced erosion crises and land loss at 1 to 5 meters per year, resulting in up to THB 6,000 million in economic losses annually. Fluctuating temperatures and rainfall patterns reduce soil fertility and insufficient water for farming, leading to agricultural losses in the form of crop rot due to excessive rainfalls and sugarcane suffering from prolonged droughts.

Livestock are also adversely impacted, affecting their growth and breeding rates. Pigs breed less when they are stressed, and extreme heat kills cattle. Between 2011 and 2035, the impact on the agricultural sector is projected to cost THB 17,912 to 83,826 million annually.

Thailand’s GHG emissions per sector

The energy sector is the country’s biggest emitter at 69% share, followed by the agriculture sector at 15.69%, the industrial processes and product use sector at 10.77%, and the waste sector at 4.88%.

More than 12 million people in Thailand, representing 1 in 6 Thais, are working in agriculture, one of the country’s primary employment sectors. In 2020, data shows that nearly half of Thailand’s total land area is devoted to agriculture (46.54%), half of which is used for growing rice.

The farmers suffer the most when extreme weather events hit, like rising temperatures and fluctuating rainfall. Rice paddies can be flooded during rainy seasons, while rice in mountainous areas faces heat stress during harvest. In aquaculture, high heat can result in fish, crabs, and other seafood deaths, decreasing yield and potentially resulting in losses. Farm animals are also impacted. It affects their yields and causes diseases or deaths.

Apart from the Agriculture sector, other sectors that are also affected, like tourism, infrastructure, public health, properties, waste management, and urban areas, are also affected by climate change. Bangkok, Thailand’s capital city, is highly vulnerable to heat, drought and floods. By 2040, 74.3% of its population will live in cities, but climate change can interrupt water supplies for residential areas and industries, making life and development more difficult.

Water scarcity increases water pollution, biodiversity loss, and crop failures. Extreme events lead to the loss of Thailand’s cultural and natural tourism sites, threatening the sector’s contribution to the country’s economy of up to 22% of its GDP.

Climate change impacts are significant in Thailand and affect all its sectors. The country needs to have a plan to tackle it to mitigate losses, adapt, and build resilience so it won’t hinder its growth and development.

ADB launches a climate-finance program to help Thailand build resilience against climate change. The new climate finance-focused program, “Accelerating Climate Finance in Thailand” with Thailand’s Ministry of Natural Resources and Environment’s Department of Climate Change and Environment (DCCE), “supports Thailand to accelerate finance flows from all sources—public, private, and capital markets—to achieve its net-zero targets” (ADB Launches, 2024).

It features policy support to develop innovative finance approaches and catalytic climate finance mechanisms, develop road maps and pilot projects in challenging sectors, including electric mobility, resilient cities, and biodiversity, and capacity building on innovative climate finance (ADB Launches, 2024).

ADB Launches (2024) says, “Thailand’s extreme vulnerability to climate change means that we need to accelerate green finance flows from private and public sectors. We will support Thailand in developing innovative finance tools such as national derisking finance mechanisms and sustainability-linked incentive bonds. We will also work with DCCE to develop bankable project models in challenging areas that are under-financed by private capital thus far,” said Mr Morris. “ADB’s renewed sovereign program in Thailand is already integrating its technical assistance, capacity building, and financing support together for this end goal.”

Thailand will need support in finance, technical expertise, technology transfer, and capacity building to achieve its climate goals stated in its NDCs. The country also needs support to develop and transfer innovative and practical technologies, particularly infrastructure and climate-related technology such as EV infrastructure, GHG reduction technology, and the transition towards renewable energy.

ADB’s project in Thailand to accelerate funding for green and sustainable projects is an example of financial and technical support that international organisations can provide for developing and most climate-vulnerable countries like Thailand.