Taking stock of nation's climate finance

Bangkok Post

17-07-2025

If the ravages of extreme weather worldwide were not enough to convince anyone of the need to urgently address and adapt to climate change, consider a sobering fact delivered by the World Meteorological Organization (WMO).
In its "State of the Global Climate 2024" report, it said last year was "likely the first calendar year to be more than 1.5C above the pre-industrial era, with a global mean near-surface temperature of 1.55 ± 0.13C above the 1850-1900 average".
This makes 2024 the warmest year in the 175 years that have been observed, according to this seminal report which was released in March.
The record-breaking year "underlined the massive economic and social upheavals from extreme weather and the long-term impacts of record ocean heat and sea-level rise".
Leading concerns
Thailand serves as a microcosm of this urgent need.
The country has already ranked 30th in this year's list of countries that are most vulnerable to climate change, according to human rights organisation Germanwatch.
The United Nations Economic and Social Commission for Asia and the Pacific (Unescap) estimates that Thailand's average annual damage from climate change will amount to almost 1 trillion baht, or 6.6% of the country's GDP per year, under the 2-degree scenario.
The cumulative damage of climate change on Thailand's agriculture sector alone is estimated to be between 17.5–83.8 billion baht per year between 2021-2045.
Naturally, Thailand needs significant investments in climate mitigation to keep up its commitment on the global stage.
In 2024, the Department of Climate Change and Environment estimated that a 30% reduction in carbon emissions by 2030 would require a 5 trillion baht investment in climate finance, while a 40% reduction would require an investment of 7 trillion baht.
Tracking finance flows
One major drawback for Thailand is the lack of any sense of urgency as well as the financial resources for both climate mitigation (to lower greenhouse gas emissions) and climate adaptation to reduce the negative impacts of climate change.
Thailand still lacks a clear picture of the current climate finance flows in the country.
As Climate Finance Network Thailand (CFNT) was founded in 2024 with the aim of catalysing more meaningful climate finance in Thailand, we took it upon ourselves to compile as much data from publicly available sources to construct a public "Climate Finance Tracker" (henceforth referred to as the "Tracker") for Thailand -- akin to the Global Landscape of Climate Finance report produced annually by the Climate Policy Initiative (CPI), the US-based organisation that focuses on climate finance and policy.
We focus on two main activities: climate mitigation and climate adaptation.
We found sources of climate finance come from various areas such as government bodies, multilateral development banks, national and multilateral climate funds, state-owned enterprises, specialised financial institutions, domestic public funds, and international financial institutions. These funds are typically directed through official development assistance (ODA), concessional loans, grants, or public investment programmes.
On the other hand, private climate finance also comes from the private sector, for example, commercial financial institutions, corporations, impact investors (including philanthropy), institutional investors, and other non-state actors.
It includes investments aligned with clear climate-related objectives through mechanisms such as green bonds, green loans, and blended finance.
One key principle used by the CPI that we adopted for our Tracker is the focus on direct investment aligned with climate mitigation and adaptation efforts within the country.
In line with the CPI's methodology, the Tracker also excludes any financial flows that do not represent new investments targeting climate-related outcomes. Investments we excluded from our calculation are secondary markets, refinancing, the transfer of ownership of existing assets, and public subsidies that are primarily designed to reimburse initial investment costs, such as those supporting private research and the development of new technologies.
Like the CPI, we exclude "carbon emissions lock-in" projects. This refers to cases where investment clings to fossil-fuel based infrastructure despite the low-emission alternatives available that could be deployed. One example of a carbon lock-in project would be an upgrade to improve the efficiency of coal-fired power plants.
Financing challenges
Climate adaptation is a much more complicated affair to track. Each activity has its own context and characteristics, and a lot of time, effort and resources are needed to monitor adaptation activities to judge whether they are "successful" or not.
CFNT attempts to address this challenge by using the Tailwind Taxonomy, a publicly available model to audit the performance of climate adaptation and resilience projects. The model was developed by Tailwind Futures, a strategic venture fund.
We chose climate adaptation projects that address the specific vulnerabilities to climate change and climate-related risk, and make assessments from the evidence-based outcomes of these activities.
What have we found?
From tallying over 2,800 project-level and organisation-level data carried out from year 2018 to May of this year, we conclude that at least 1.7 trillion baht has been invested in climate mitigation projects.
Some 82% of this sum derives from corporations, commercial banks, and state-owned enterprises. In terms of contributions by sector, 64% of total investment comes from energy and transport. Zooming into sub-sectors, the most popular climate mitigation activities are rooftop solar installations (17% of the total), electric vehicles (10%), and mass transit and mass railway projects (8%).
We also look into climate adaptation activities and projects. Based on data from 670 projects, we estimate that during 2020-2024, Thailand spent 148 billion baht on climate adaptation projects. Some 95% of the money came from Thailand's central government, followed by multilateral climate funds (1.8%). Zooming into sectors, sustainable water management, urban resilience, and sustainable agriculture are key focal areas for climate adaptation.
Those who are interested in perusing our Tracker -- reading our detailed methodology and downloading slides featuring our key highlights -- can do so by visiting our website at www.climatefinancethai.com/tracker.
By making the Tracker publicly accessible and updating the database annually, we hope to assist policymakers in identifying the gap between existing climate finance flows and demands. We seek to jumpstart conversations on climate finance, as well as enabling better allocation of funds into the most urgently needed sectors and sub-sectors in Thailand, especially to those that are the most vulnerable to the worsening impacts of climate change.