Designing a Sustainable Framework for Thailand’s Future Emissions Trading System

Abstract

This study proposes a comprehensive framework for establishing an Emissions Trading System (ETS) in Thailand, addressing three core design elements: scope, cap setting, and allowance allocation. Using a mixed-methods approach that combines quantitative data analysis with qualitative insights from expert and stakeholder consultations, the research identifies a practical and strategic pathway for implementation. The proposed framework recommends a phased approach, with the initial phase covering 222 high-emitting facilities across seven key sub-industrial sectors. This scope, defined by a 25,000 tCO2e threshold, is estimated to cover approximately 42.64% of the country’s total greenhouse gas (GHG) emissions. The ETS cap for the first phase is set at 20 MtCO2e, aligning with national climate targets outlined in Thailand’s draft NDC 3.0. For allowance allocation, free allocation via output-based benchmarking is identified as the most suitable method for initial implementation, given its feasibility and effectiveness in incentivizing efficiency improvements. Furthermore, the standard cost model (SCM) was applied to assess compliance costs, indicating an annual administrative burden of 21,534 h and THB 42.18 million. These insights provide policymakers with a baseline for streamlining monitoring, reporting, and verification (MRV) requirements. The findings suggest that the proposed framework is a robust and strategic model, tailored to the unique economic and regulatory context of Thailand, providing a clear path to achieving the nation’s ambitious sustainable climate goals.