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21 Jun 2023

Thai Economy

Environmental issues that the new government must urgently push forward (Business Brief No.4008 Full Ed.)

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        A recent survey conducted by KResearch on environmental operations of the business sector shows that only one-fourth of the respondents have begun to adjust their operations to reduce their impacts on the environment. The finding not only reflects the lack of readiness and awareness about environmental measures and actions within the Thai private sector, but also shows that there are still issues about the uneven implementation of environmental policies across the private sector, including unclear supervisory duties of the relevant government agencies despite the fact that Thailand has set a clear net-zero target. These are some of the issues that the new government must address to create changes in all sectors, including the energy, industrial and agricultural businesses.  
        Additionally, the new government has to cope with challenges related to more stringent international environmental measures. Among these include the European Union’s Carbon Border Adjustment Mechanism (CBAM), which is scheduled to report the amount of greenhouse gas emitted by products that will enter the EU in October 2023 and levy carbon fees in 2026. Presently, affected Thai exporters are still waiting for clearer policies and actions on such measures from the relevant Thai public agencies.  
        The relevant public agencies should also implement policies that offer more incentives and compensation during a transition towards the adoption of clean energy as such policies will likely induce more businesses to reduce carbon emissions. These may include the rescission of some regulations that are not inducible enough for SMEs, provision of progressive tax deductions in line with the amount of investment in the reduction of carbon emissions, and increased engagement of the private sector in the selection of environmental advisors to ensure that there is sufficient number of them while businesses can gain easier to related consulting services.   
        Although such policies may represent challenges to the new government’s fiscal position, and difficult options for implementation during the initial phase because the new government has to give priority to more urgent financial and economic matters of the country. As a result, it must weight related issues and strike a balance in the implementation of environmental policies, with the aim of upgrading environmental standards within the private sector, because the overall competitiveness of Thai businesses and quality of life among Thai people might be jeopardized if the implementation of environmental policies is delayed.

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Thai Economy