The impact of different GHG reduction scenarios on the economy and social welfare of Thailand using a computable general equilibrium (CGE) model

BackgroundThe Nationally Determined Contribution (NDC) of Thailand intends to reduce greenhouse gas (GHG) emissions by 20 to 25% from the projected business as usual level by 2030 with the deployment of renewable energy technologies and energy efficiency improvement measures in both the supply and demand sectors. However, in order to contribute towards meeting the long-term goal of the Paris Agreement to stay well below 2 degrees C, ambitious mitigation efforts beyond 2030 are needed. As such, it is necessary to assess the effects of imposing more stringent long-term GHG reduction targets in Thailand beyond the NDC commitment.MethodsThis paper analyses the macroeconomic effects of limiting the GHG emissions by using a computable general equilibrium (CGE) model on Thailand's economy during 2010 to 2050. Besides the business as usual (BAU) scenario, this study assesses the macroeconomic effects of ten low to medium GHG mitigation scenarios under varying GHG reduction targets of 20 to 50%. In addition, this study also assesses three different peak emission scenarios, each targeting a GHG reduction of up to 90% by 2050, to analyze the feasibility of zero GHG emissions in Thailand to pursue efforts to hold the global temperature rise to 1.5 degrees C above pre-industrial levels, as considered in the Paris Agreement.ResultsAccording to the BAU scenario, the GHG emissions from the electricity, industry, and transport sectors would remain the most prominent throughout the planning period. The modeling results indicate that the medium to peak emission reduction scenarios could result in a serious GDP loss compared to the BAU scenario, and therefore, the attainment of such mitigation targets could be very challenging for Thailand. Results suggest that the development and deployment of energy-efficient and renewable energy-based technologies would play a significant role not only in minimizing the GHG emissions but also for overcoming the macroeconomic loss and lowering the price of GHG emissions.ConclusionsThe results reveal that without a transformative change in the economic structure and energy system of Thailand, the country would have to face enormous cost in reducing its GHG emissions.