Human activities are undeniably driving the increase in global surface temperatures, and Thailand is no exception. The country is already experiencing longer, hotter summers and shorter winters. In Central and Eastern Thailand, average temperatures have risen by 0.5 to 2 degrees Celsius, with no signs of slowing down. This trend is accompanied by a troubling increase in climate extremes—more frequent droughts and severe floods.
Thailand is witnessing a decrease in the number of rainy days and continuous rainfall, yet when it does rain, it pours with unprecedented intensity. These shifts signal a future of persistently hotter weather for the country.
Economists break down the risks of climate change into two categories: physical and transition risks. Consider, for example, the agricultural sector. Physical risks manifest as droughts, leading to water shortages that stunt crop growth and harm livestock. These unhealthy conditions reduce food productivity, creating ripples throughout the supply chain and affecting the availability of raw materials and agricultural products.
Transition risks, on the other hand, are tied to the economic shifts needed to adapt to a low-carbon economy. For example, carbon pricing may drive up the cost of agricultural production. As prices rise, consumer demand could fall, pushing producers to embrace low-carbon technologies to stay competitive.
The economic consequences of climate extremes in Thailand are already significant. Take the devastating floods of 2011, for instance. These floods overwhelmed seven industrial estates in Ayutthaya and Pathum Thani, areas crucial to the electronics, automobile, and electrical components industries. The damage was catastrophic.
Climate change doesn't just affect private businesses; it also places a heavy burden on the government. After each natural disaster, the government is forced to divert substantial funds toward repairing and maintaining damaged infrastructure. Moreover, as incomes shrink due to climate-related disruptions, tax revenues decline, further straining public finances.
To combat these challenges, the government can play a crucial role in steering the economy toward sustainability. By offering tax incentives for adopting low-carbon technologies and practices, Thailand can foster a more resilient, low-carbon future.
Written by Arin & Arisa Thongtang
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