Thailand is planning to achieve net zero emissions by 2065, 15 years later than its neighbours in the lower Mekong region. The country is seeking funding for climate response, and although its delegate at COP28 said Thailand is expecting some financial assistance from the Loss and Damage Fund, it will need other sources since the amount of grants given by the Fund is likely to be limited.

Attendees entering a meeting room during the UN Climate Change Conference COP28 at Expo City Dubai on 12 December 2023, in Dubai, United Arab Emirates. (Photo by COP28 / Christopher Pike)

When a global thirst collides with a finite pool of resources, demand far exceeds supply. Developing countries are embarking on a tough journey as they go on a quest for financial support to increase climate resilience and achieve net zero.

A Thai delegate to the COP28 climate summit views the challenges the country may meet in re-establishing its net zero goal in face of the high world demand for “green money”.  

Most nations, including all of Thailand’s neighbours in the lower Mekong region, have committed to achieving net-zero emissions by 2050. Thailand, however, has set the clock for 15 years later.

"We will arrive [at net zero] no later than 2065 under our current conditions. The aim might be re-evaluated and reset based on our accomplishments, and based on what we have accomplished thus far, a reset is not inconceivable," says Phirun Saiyasitpanich, a leading member of the country’s negotiation team at COP28.

Phirun has been part of the country’s negotiations on climate change issues for over 10 years and is now the Director-General of the newly founded Department of Climate Change and Environment.

A UN expert group on climate finance estimated that emerging economies and developing countries will need to spend around US$2.4 trillion a year by 2030 to cap emissions and adapt to climate change.

According to the Thailand Development Research Institute (TDRI), a Thai think tank, the country saw 146 abnormal weather events costing US$7.7 billion between 2000 and 2019.

“Up to eighteen times more finance is needed for adaptation to meet the current needs of developing countries,” said UN Secretary-General António Guterres in his remarks at the G77+China Leaders’ Summit at COP28 on 2 December 2023

It will be tough to avoid additional debt for a country whose public debt already exceeds 62% of GDP, and which has just issued a US$12.5 billion “sustainability” bond, with plans to raise another US$2 billion next year.

Vietnam, another lower Mekong country, has just committed itself to spending US$15.8 billion, 98% of which comes in the form of loans, under the Just Energy Transition Partnership funding instrument launched in COP26. Phirun says the Thai squad will be cautious.

The advantages of climate adaptation should be carefully weighed against the cost for future generations, he says.

"We are working on grants and will restrict our access to loans. We don't say no, but we try to keep them to a minimum." 

Financial entities are pledging money for climate finance, but many of the pledges remain unmet, most likely due to the increased financial strain on wealthier nations as a result of Covid-19 and other issues. Guterres also noted in his remarks that “under thirty percent of developed countries’ public climate finance is in the form of grants.”

According to the UN’s 2023 Emissions Gap Report, China, the United States of America, India, the European Union and the Russian Federation, dubbed “the top five emitters,” were responsible for approximately 60 % of greenhouse gas emissions in 2021. The G-20, a forum of the world's largest economies, are responsible for roughly 76 % of global greenhouse gas emissions, while 46 least developed countries (LDCs) – home to about 1.1 billion people, accounted for 1.1%.

Thailand has been arguing the need for financial assistance as a country vulnerable to climate change through the G77+China, a group of 135 developing nations. Meanwhile, at COP28, how to determine vulnerability and eligibility has yet to be decided.

The Global Climate Risk Index developed by a German NGO ranked Thailand in the 20 out of 180 countries that suffered most from extreme weather events between 2000 and 2019.   

According to Phirun, the pledges to the long-awaited and much-anticipated Loss and Damage Fund amounting to a little more than US$700 million, are far from enough, especially for adaptation funding, which may cost anywhere from US$300 million to a billion for each project. The estimated need for Loss and Damage funding, according to the NGO UUSC, is US$400 billion per year.

“After COP28, there will be a lot of desk work on proposals to be submitted to all sources possible,” Phirun said.

Several developing nations have raised concerns that the World Bank’s designation as the host and trustee for the Fund will make it more difficult to access the money they need. However, Phirun is not concerned, as the World Bank has said that it will leave the fund distribution to the Board of Fund, which is expected to meet in January 2024. He expects that the new Board, which is to be co-chaired by developed and developing countries and with members from both groups, will adopt a new approach to climate funding and make it more accessible, affordable, and timely for the needs of affected nations.

Thailand is expecting to receive some financial assistance from the Loss and Damage Fund. Nevertheless, Phirun noted that, since the Fund is designed to be in the form of pure grants, the amount of funding will be limited.

“Because no countries could afford [to give] the grant under this economic circumstance, so Thailand will need to find other climate finance sources, like the Green Climate Fund and the Adaptation Fund. We ask all climate finance institutes for a blended fund, with grants and loans, and with considerable interest rates,” he said.

Thailand has received a €39 million grant from the Green Climate Fund  to collaborate with rice producers across 21 provinces to produce sustainable, low-emission rice. It is the second phase for the project that has already trained 15,000 farmers in 6 provinces over the past 5 years.

Phirun agrees that it may be quite hard not to take out loans. However, with the world clamouring for climate finance reform and with the  COP28 UAE Declaration on a Global Climate Finance Framework, which vows to make the funding system available and accessible to all, it is likely that Thailand will be able to obtain a cheap and quick loan. The country is also ready to change to meet global climate funding obligations.

“Only that we will not commit to anything we cannot do,” said Phirun.