Record-breaking heatwaves in the summer and flash floods during monsoon season are expected to become the "new normal" as Thailand adjusts to extreme weather.
The impact of climate change has driven the country, from policymakers and regulators to businesses and individuals, to embark on a variety of adaptation and mitigation measures as they cope with a just transition to a low carbon society.
LOCAL CHALLENGES
Thailand is on track to becoming an ageing society, with the percentage of the population older than 65 increasing from 9.1% in 2000 to 12.9% in 2022. This puts the country in a unique position of facing ageing demographics typical in an advanced economy while still being an emerging market.
According to the World Health Organization, climate change has a disproportionate impact on ageing populations. It is the elderly with weakened immunity that will struggle most when faced with temperature fluctuations that will in turn increase their vulnerability to dehydration and heat stroke. Those living in flood-prone areas will also be exposed to water-borne diseases.
All this means greater pressure on the existing healthcare infrastructure, exacerbated by the shrinking working-age population.
Furthermore, while overall income levels are generally increasing for Thailand, more than 6% of the country still lives below the national poverty line of 2,803 baht per month. Most of them are in the rural parts of Thailand, particularly in the South and Northeast, where opportunities for income mobility are limited.
It is the rural poor who are expected to bear the brunt of climate-induced natural disasters that will occur with higher intensity and frequency in the coming years. The record heatwave in May this year killed more than 60 people, with the highest number of deaths coming from the rural Northeast.
Climate change is also expected to greatly affect Thailand's economy. The 2011 floods led to a loss of production that cost Thailand 10% of its GDP, largely because of production stoppages in flooded manufacturing plants.
Agriculture, which comprises around 9% of Thailand's GDP and employs 30% of the population, will also be damaged as forest fires, poorer air quality and excessive rain lower both the quality and yield of agricultural crops such as rice and sugar. Smallholder farmers who have minimal social security are expected to be affected the most.
Cities face mounting challenges from climate change. Indonesia already decided to move its capital from Jakarta to Nusantara in anticipation of rising sea levels and inevitable collapse from groundwater depletion and land subsidence. By the looks of it, Bangkok might face a similar fate as officials contemplate moving the capital to a city at higher elevation.
Thailand's unique demographic challenges, coupled with the disproportionate impact it will face from climate change, present the need for a fine-tuned transition strategy that ensures its people and businesses continue to thrive.
Supporting a just transition
UOB is committed to supporting a just transition in Southeast Asia. In 2022, UOB committed to achieving net zero for financed emissions, with an emphasis on supporting the growth of the green economy while improving energy access across the diverse economies in the region.
In Thailand, we are working to accelerate the adoption of low-carbon solutions across value chains by providing financing across entire industry ecosystems. In line with Thailand's climate strategy, we have prioritised energy and transport as the two focus areas for sustainable financing. When combined, they represent 70% of the country's greenhouse gas emissions.
Last month, the Department of Alternative Energy Development and Efficiency announced an ambitious target to increase the production of electricity from renewable energy to more than 50%, aiming to achieve carbon neutrality by 2050 and net zero carbon emissions by 2065.
To support the development and adoption of renewable energy, our U-Solar programme simplifies access to financing for industry players in the solar power ecosystem. With U-Solar, we are working with solar project developers, engineering, procurement and construction contractors, and leading equipment suppliers to bring solar power solutions to market.
Residential, commercial, and industrial end users can also take up packaged financing solutions for solar panel installations and maintenance. This way, we can help ensure that people continue to have access to energy in a more sustainable manner.
Similarly, in line with the government's commitment to ensure that electric vehicles (EVs) comprise 30% of the nation's total auto production by 2030, our U-Drive programme provides financing to EV dealers, original equipment manufacturers, charging operators and installers, and end users.
This in turn is driving the transformation of the automotive sector and helping to create relevant jobs to meet the demands of a low-carbon society.
Building the future
The need to transition to a low-carbon society is clear, and we all have a role in this. Energy systems need to be less dependent on fossil fuels, businesses need to reduce their emissions, and individuals need to make consumption decisions -- how we live, work and play -- that consider our environmental footprint.
Thailand must also address its socioeconomic obligations to its people by keeping economic growth on track, while ensuring that no one gets left behind.
At UOB Thailand, we aim to do our part to smooth Thailand's transition to a future when climate considerations are part of daily business and lifestyles.
Whether it is to support the decarbonisation of entire supply chains, or accelerate the adoption of green technologies, we are here to provide the financial levers for a transition that is both effective and just.
Chow Wong Yuen is Chief Sustainability Officer for UOB Thailand. For more information about UOB's sustainability initiatives and sustainable finance offerings, please visit UOB Thailand's sustainability website at this link.
