Thailand will turn into the second Southeast Asian country to introduce a carbon tax next yr, after Singapore. While it might not initially have a major impact on emissions, the move sends a crucial signal that reducing carbon emissions is a priority for the federal government and can encourage the adoption of fresh technologies to slow global warming.
Dr Vinod Thomas of the ISEAS-Yusof Ishak Institute said the introduction of a carbon tax was a sensible decision for a rustic that remains to be heavily depending on fossil fuels, akin to Thailand, where 85% of its energy mix comes from oil, natural gas and coal.
Singapore introduced a carbon tax in 2019 of S$5 ($3.72) per tonne of CO2e, rising to S$25 ($18.62) this yr and expecting to succeed in S$50-80 ($60) per tonne by 2030. Thailand will follow suit, imposing a levy of 200 baht ($5.60) per tonne of CO2e on oil products akin to diesel and petrol from next yr. The existing tax will probably be converted right into a carbon tax at no extra revenue or cost to consumers and without requiring latest laws.
Thailand’s carbon tax rate is predicted to evolve, with the potential of higher taxes in sectors akin to battery production and transportation. The initial tax of 200 baht per tonne of CO2e could increase in the long run.
The tax will probably be a part of Thailand’s climate change law, which incorporates mandatory emissions reporting, a climate change fund and an emissions trading system that enables firms to purchase and sell carbon credits. It is predicted to take one to 3 years to implement.
In an emissions trading system, the federal government would set a maximum emission limit, and corporations that reduced their emissions could sell unused amounts to firms with high levels of pollution. This gave firms the pliability to purchase carbon credits or adopt latest technologies, depending on their costs and wishes.
The experiences of Thailand and Singapore in implementing carbon taxes could encourage neighbouring countries to follow suit, scale up carbon pricing and reduce emissions within the region.
Several countries within the region are also taking steps to cost carbon. Indonesia, which had originally planned to introduce a carbon tax in 2022, has postponed it to 2025 to make sure the program is according to existing regulations.
Malaysia can also be planning to introduce carbon pricing and is considering introducing a carbon tax ahead of the European Union’s Border Adjustment Mechanism (CBAM) in 2026, which might impose tariffs on imported goods based on carbon emissions. The Thai government will negotiate with the EU to avoid double taxation of Thai exports and promote Thai products as more climate-friendly.
Source:CNA
