Macroeconomic Impacts of Decarbonization Policies in Thailand

This technical report analyzes the economy-wide and emission reduction impacts of decarbonization policies in the Thai power sector. The power sector is critical to Thailand's decarbonization strategy, contributing significantly to carbon emissions. The study employs a multi-sector, recursive dynamic model known as the AIM/CGE model, which disaggregates the electricity sector into eight power generation subsectors. The findings indicate that disaggregating electricity production is essential for accurately quantifying the economic impacts of carbon mitigation. The report outlines two scenarios for analysis: a reference scenario and a carbon neutrality scenario, with projections of GDP changes and household consumption impacts. The results suggest that while there may be short-term economic benefits, long-term projections indicate potential GDP losses due to increased power generation costs and shifts in consumption patterns. The report emphasizes the need for further updates to the AIM/CGE model to enhance the assessment of carbon mitigation impacts.